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Are you thinking about taking the HRM DSST test? Wondering what you need to know about the course? Here is a quick guide to help you with your prep.

If you’ve studied HR or general management before then this guide will act as a quick summary of all the topics you need to revise for the test. However, even if this is your first time studying management, then this easy-to-understand guide will still give you a comprehensive idea of what you need to prepare.

Human Resource Management
Study Guide

human resources management dsst

The exam itself is divided into ten parts. We’ve covered all of the topics for you here, and at the end of the guide we’ve put together a sample test for you so you can practice your skills – remember, however, that the sample questions only cover the course in summary.

  • I. An Overview of the field of Human Resource Management – 8%

    Human Resource Management (HRM) in the simplest of terms is the management of human resources in an organization. HRM has evolved immensely since the industrial revolution and has been growing and changing at a rapid pace ever since. Unlike in the past, HRM has now become an entirely separate department of its own, and it plays a vital role in the successful functioning of an organization.
    An HR manager has a vital position in an organization with responsibilities that include creating and implement policies and making sure every employee is aware and follows set rules and regulations.
    HR functions: The list of HR functions is very long, but some of the most critical roles that the HRM department plays include:
    • Hiring
    • Promotions
    • Appraisals
    • Job analysis and job designing
    • Compensations and rewards

  • II. Human Resource Planning – 9%

    With Human Resource planning, organizations identify its HR requirements. In other words, HR planning is like a connection between human resource management and the strategic plan of the organization as a whole. It is a process that outlines ways to maximize employee output while keeping them satisfied and happy with the organization, and making sure there is never a shortage or surplus of the workforce. The HR department interacts with other departments of the organization to devise strategies that will help in achieving organizational goals and objectives. Strategic HRM helps to make other departments stronger and effective, and that is why it is considered an essential and integral part of the organization in the modern era.
    Another essential function of HR management is Diversity and Inclusion. Diversity here is further divided into two categories:
    • Visible diversity traits: e.g., race, gender, age, etc.
    • Invisible diversity traits: e.g., religion, sexual orientation, socio-economic status, etc.
    The HR department has to create an organizational environment where everyone is treated respectfully, fairly, and with equal access to opportunities.
    Organizations have to pay equal importance to the concept of inclusion and not just diversity. An organization may be diverse, but if an environment of acceptance of each other’s differences is absent, this type of diversity could be catastrophic.
    Job Analysis and Job Design: Job Analysis and Job Design are the primary and most important roles of the HR department. Through job analysis, HR managers determine the duties and requirements of a job, and through job design, they determine how these duties are to be performed most productively. Job design then helps the administration in other areas such as job rotation, job enlargement, etc.

  • III. Staffing / Talent Acquisition – 11%

    Hiring/Recruitment is the traditional role of HR managers. Hiring is a long, tiresome, and expensive process. The first step of recruitment is job analysis through which HR managers, with input from other relevant departments, outline job requirements. They then collect a pool of candidates and choose the best out of them through various tests and interviews.
    Promotions and Transfers: According to Pigours and Myers, “Promotion is the advancement of an employee to a better job – better in terms of greater responsibility, more prestige or status, greater skill, and especially an increased rate of pay or salary.”
    Transfers, on the other hand, are a lateral shift from one position to another without any change in status or duties. The change of location of a job is also called a transfer.
    Companies may lay off employees for a variety of reasons including acquisitions, a lack of funds, etc.

  • IV. Training and Development – 8%

    Training and Development is a critical function of HR management. It ensures that employees are made aware of, taught and, if applicable, put into practice recent developments and trends in their respective fields to help them maximize the quality and quantity of their output for the company.
    Onboarding is somewhat like an orientation, but not just an orientation. It is a process by which new employees are informed about the environment, culture, policies, and regulations of the organization.
    In the modern era of high competition, the role of HR has also increased. It is no longer just about hiring, promoting, and providing benefits. HR departments also help employees in career planning and training workers via rigorous learning programs.

  • V. Performance Management (Appraisals) – 12%

    HR managers have to manage employee performance and have to conduct appraisals as well. These appraisals are then used as the basis for promotions, training and development opportunities, compensation reviews, feedback and grievances, and more. Numerous techniques are available for conducting performance appraisals, including the following:
    • Assessment Centre Method
    • Behaviorally Anchored Rating Scale
    • Essay Evaluations
    • Human Asset Accounting Method
    • Management by Objective
    Challenges that managers may face during the appraisal processes include:
    • Appraiser inexperience
    • Employee resistance
    • Appraiser bias
    • Appraisals that are not linked to rewards
    • Appraisals that are not focused on development

  • VI. Compensation and Benefits / Total Rewards – 12%

    Compensations are all of the rewards earned by employees in return for their services and labor. They include direct financial compensation such as salaries, indirect financial compensations such as retirement funds, and non-financial compensations such as development opportunities and career development.
    Compensation sometimes is used by organizations as a tool for:
    • Recruiting and retaining employees
    • Increasing productivity
    • Reducing turnover and increasing employee loyalty
    Employee benefits are non-cash compensations offered to employees. These benefits are either mandatory by law or voluntary, i.e., the employees get to choose the benefit plan according to their situation.

  • VII. Safety and Health – 9%

    Workplace safety, security, and health are not just industry buzzwords anymore. Companies nowadays strive to provide the best of everything to their employees to gain employee loyalty which results in high retention, low turnover, higher productivity levels, and ensures that company goals and objectives are achieved, making it a win-win situation for employees and the company alike. In some places, companies are required by law to provide various safety features or equipment to their employees, and in case of workplace accidents or illness, companies may be liable for compensation to their employees.

  • VIII. Employment Law – 16%

    Labor or Employment Law acts as an arbitrator between workers, employers, unions, and the government. These laws are set to resolve conflicts between different parties peacefully.
    Equal employment opportunity laws such as the Civil Rights Act Title VII, ADA, or ADEA require employers to provide equal opportunities to all their employees, and they are prohibited from discriminating on the basis of race, age, color, ethnicity, or gender, etc.
    Compensation and benefits-related laws such as ERISA, FMLA, or FLSA require employers to pay at least minimum wages (in an amount fixed and adjusted annually by the government) as well as benefits such as insurance to employees.
    Health, safety and employee rights laws such as OSHA or WARN require employers to make workplaces safe and secure and free of dangerous hazards.

  • IX. Labor Relations – 10%

    Labor Relations is the function that HR plays in training and guiding employees about employment laws, legal issues, and work-related contracts.
    Labor Laws such as NLRA, the Taft-Hartley Act, or the Civil Service Reform Act cover the rights and responsibilities of unionized employees. Unions exist to represent the labor force, and labor laws prohibit employers from treating unionized employees any differently from non-unionized employees.
    Unions exist to help in bringing up and solving employee-related problems. Conflict resolution has become somewhat easier with unions since employee representatives are better positioned to present their demands to and negotiate with employers. Through collective bargaining, unionized employees now have higher salaries and benefits.
    Unionized versus non-unionized work settings: In a non-unionized setting, the employer makes all the decision while employees have little or no say in the decision-making process. In a unionized setting, however, the union represents the employees, and they have a say in work contracts, and the union makes sure the contracts are carried out.

  • X. Current Issues and Trends – 5%

    Human resource information systems or human resource management systems (HRMS), in simple terms, is a blend of human resources and information technology using software. HRMS allows HR managers to carry out most of their activities electronically.
    The Global HR Environment: With the world becoming a global village, the HR functions of companies have become increasingly internationalized over the past few decades. Competition between products and services has increased, employees are more diverse and more likely to work off-location, and such work setups present new varieties of employee issues to HR managers. New practices and policies are being studied and introduced to workplaces across the globe to manage issues related to the globalization of human resources.
    Corporate Social Responsibility and Sustainability: CSR has to do with the steps that a corporation takes to assess and take responsibility for the effect that the company has on the environment and society. Sustainability is when a company is aware of its responsibilities to stakeholders and is not only concerned with its own profits and financial gains.

Human Resource Management
Practice Quiz

Do you feel confident to give the practice test a try? The format of the test will be nice and familiar for most as it will be multiple-choice with only one correct answer. When you write your answer make sure to tap (or hover over) the question to give you the answer and an explanation.

This quiz shall test what you already know and challenge you to learn more. If you do not get a good score, don’t give up, but instead dive into more reading, flashcards, and videos.

Please do keep in mind that we can’t guarantee the accuracy of this quiz, so we do recommend you also run through a full-length practice exam.  We’ll recommend some good options in the resources section at the bottom of this page.

Question 1: Which one of the following assists HR managers in management processes?

a) Line manager
b) First line supervisor
c) Staff manager
d) All of the above

Answer: C (Staff manager)
Reason: Line hierarchies exist in revenue-generating departments such as manufacturing and sales. Staff hierarchies exist in departments that consume revenues; their central role is to support revenue-generating departments by things such as making policies and taking internal organizational decisions etc., leaving Option C – Staff managers – as the role that assists HR managers.

Question 2: Redesigning business processes to achieve goals more efficiently and effectively is called…

a) Redesigning the jobs of workers
b) Assigning additional activities to workers
c) Moving workers from one job to another
d) Reengineering

Answer: D (Reengineering)
Reason: Business Process Reengineering (BPR) is the analysis and re-designing of business processes and job workflows in an organization. Through re-engineering, new patterns are determined to get work done more efficiently and effectively.

Question 3: Which of the following is defined as the written record of job duties, responsibilities, and work conditions?

a) Job description
b) Job specification
c) Job profile
d) None of the above

Answer: A (Job description)
Reason: A document that describes the duties and responsibilities of a job is called a job description. Job descriptions also define whom employees have to report to, and it specifies the skills and education required for the position. The salary range of the position is also outlined in the job description.

Question 4: An employee that belongs to neither the home country nor the host country is called…

a) A foreigner
b) An expatriate
c) External talent
d) A third-country national

Answer: D (Third country national)
Reason: When a company opens a branch in another country (known as the host country) it has three staffing options:
• It can hire from the home country (home-country national strategy; the employees are called expatriates)
• It can hire from the host country (host-country national strategy)
• It can hire a third country national (third-country national strategy); such employees are called third country nationals

Question 5: When an employer refuses labor access to the workplace, this is known as:

a) A grievance procedure
b) A lockout
c) An injunction
d) A strike procedure

Answer: B (Lockout)
Reason: During a conflict between labor/employees and employers, if the employer shuts down the workplace and labor is not allowed to work, this is called a lockout. This is done to pressurize employees to agree with the terms set by the employers. When several employers take a lockout action together, this is known as a joint lockout or shutout.

Question 6: What is the bonus salary paid to an employee on the basis of individual performance called?

a) Merit pay
b) Motivators
c) De-merit pay
d) Fixed merit pay

Answer: A (Merit pay)
Reason: Merit pay (pay-for-performance) is a raise in salary based on set criteria. If an employee can meet set goals as described in specific criteria, then he or she is given merit pay. Usually, a meeting between the employee and employer is held to review performance before giving out merit pay.

Question 7: Which of the following laws require employers to provide equal opportunities to all its employees?

a) Civil Rights Act Title VII, ADA, ADEA
d) NLRA, Taft-Hartley Act, Civil Service Reform Act

Answer: A (Civil Rights Act Title VII, ADA, ADEA)
Reason: The Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act are the laws that prohibit companies from discriminating on the basis of disabilities or age, while Civil Rights Act Title VII prohibits organizations from discriminating on the basis of race, color, ethnicity, sex, language, etc.

Question 8: Employees get to decide their own schedule, i.e., the number of hours per day and the number of days a week/month through ________ schedule.

a) a deferred workweek
b) a compressed workweek
c) a flexible workweek
d) a stable workweek

Answer: B (Compressed workweek)
Reason: Employees can choose their own schedule through a compressed workweek schedule. For example, an employee can work for 10 hours a day and take three days off in a week, or they can complete their required hours in fewer days and take other days off.

Question 9: Facts and data are used for decision making in:

a) Evidence-based HRM
b) High-performance work systems
c) Both A and B
d) None of above

Answer: A (Evidence-based HRM)
Reason: In evidence-based HRM, human resource managers critically use evidence, facts, and research to make important decisions that matter to the organization and its employees.

Question 10: Which of the following reactions by a dissatisfied employee can worsen a bad situation in an organization?

a) Exit
b) Voice
c) Strikes
d) Neglect

Answer: D (Neglect)
Reason: A dissatisfied employee may leave an organization, or they may choose to stay loyal and actively voice their problems and constructively work toward improvement with the employer. However, neglect is when an employee neither leaves the job nor works to help the organization and instead chooses to ignore their problems, leaving grievances and issues to smolder and worsen over time.

More DSST Study Resources

Are you at the beginning of your study process, or just looking for a couple more practice questions to finish prepping for your exam? In either case, you can find some of my favorite resources below. Some of the links below are affiliate (Amazon for instance), which means they’ll pay us a few bucks for every purchase through the link. Feel free to use those links if you want to support the site, but you can also just Google the title or pick the book up at your local library.

Official DSST Practice Test: Ok, so the DSST website isn’t the most inviting, but it will give you the best approximation of the real exam experience. Also, the official practice test is quite affordable (currently just $5 per practice exam).

DSST Human Resource Management | Mometrix: Textbooks are great as far as they go, but I’d generally recommend you opt for this exam guide instead. It tends to cut through the confusion and help you accelerate your learning process.

InstantCert Academy: Another website with a very dated design, but as ancient as it looks, this is actually an incredibly valuable resource. Basically, you get a massive set of flashcards that you can use to study human resources management and to really solidify that knowledge so you’re ready for the exam.

Plenty of other resources exist – just do a quick internet search – but these are a fantastic start, and probably all you really need. I’ve personally done some exams with just InstantCert and the official practice test.

Congrats on starting your DSST study journey! Study hard, earn credit, and most of all remember to have fun.