Page 1 of 87
VHM2 Task 1: Current HR Practices
Analysis | 2026 Update with complete
solutions.
Q1
Which of the following best describes strategic human
resource management (SHRM)?
A) Handling payroll and benefits administration
B) Aligning HR practices with organizational goals to achieve
competitive advantage
C) Managing employee discipline
D) Outsourcing all HR functions
Rationale: SHRM integrates HR strategies with business
objectives to improve performance and competitive position.
Answer: B
,Page 2 of 87
Q2
The “HR balanced scorecard” measures HR’s contribution to
business outcomes across four perspectives. Which of the
following is NOT one of them?
A) Financial
B) Customer
C) Employee satisfaction only (internal process is one;
employee satisfaction is part of learning/growth) – The four are
financial, customer, internal processes, learning & growth.
D) Internal processes
Rationale: Kaplan & Norton’s balanced scorecard includes
financial, customer, internal business, and learning & growth
(which includes employee satisfaction).
,Page 3 of 87
Answer: C (if “only” is the issue; but the correct answer is that
“employee satisfaction only” is not a perspective – it’s a metric
within learning & growth.)
Q3
A company decides to differentiate itself through innovation.
Which HR practice would best support this strategy?
A) Strict attendance policies
B) Rewarding risk-taking and creativity, flexible job
descriptions, collaborative culture
C) Minimizing training budgets
D) Uniform performance metrics
Rationale: Innovation strategies require HR practices that
encourage creativity, autonomy, and continuous learning.
Answer: B
, Page 4 of 87
Q4
HR metrics such as revenue per employee and labor cost
percentage are examples of:
A) Operational metrics
B) Strategic metrics linking HR to financial performance
C) Compliance metrics
D) Recruitment metrics
Rationale: These metrics demonstrate HR’s impact on
organizational productivity and profitability.
Answer: B
Q5
A cost-leadership business strategy is best supported by HR
practices that emphasize:
VHM2 Task 1: Current HR Practices
Analysis | 2026 Update with complete
solutions.
Q1
Which of the following best describes strategic human
resource management (SHRM)?
A) Handling payroll and benefits administration
B) Aligning HR practices with organizational goals to achieve
competitive advantage
C) Managing employee discipline
D) Outsourcing all HR functions
Rationale: SHRM integrates HR strategies with business
objectives to improve performance and competitive position.
Answer: B
,Page 2 of 87
Q2
The “HR balanced scorecard” measures HR’s contribution to
business outcomes across four perspectives. Which of the
following is NOT one of them?
A) Financial
B) Customer
C) Employee satisfaction only (internal process is one;
employee satisfaction is part of learning/growth) – The four are
financial, customer, internal processes, learning & growth.
D) Internal processes
Rationale: Kaplan & Norton’s balanced scorecard includes
financial, customer, internal business, and learning & growth
(which includes employee satisfaction).
,Page 3 of 87
Answer: C (if “only” is the issue; but the correct answer is that
“employee satisfaction only” is not a perspective – it’s a metric
within learning & growth.)
Q3
A company decides to differentiate itself through innovation.
Which HR practice would best support this strategy?
A) Strict attendance policies
B) Rewarding risk-taking and creativity, flexible job
descriptions, collaborative culture
C) Minimizing training budgets
D) Uniform performance metrics
Rationale: Innovation strategies require HR practices that
encourage creativity, autonomy, and continuous learning.
Answer: B
, Page 4 of 87
Q4
HR metrics such as revenue per employee and labor cost
percentage are examples of:
A) Operational metrics
B) Strategic metrics linking HR to financial performance
C) Compliance metrics
D) Recruitment metrics
Rationale: These metrics demonstrate HR’s impact on
organizational productivity and profitability.
Answer: B
Q5
A cost-leadership business strategy is best supported by HR
practices that emphasize:
