Certified Building Official Management Practice Exam

To assess the effectiveness of strategic human resources management audits, which method is commonly utilized?

1. Comparative analysis

2. Return on investment analysis

3. Employee feedback surveys

4. Performance appraisal reviews

The correct answer is: Return on investment analysis

The method of return on investment (ROI) analysis is a key approach used to assess the effectiveness of strategic human resources management audits. This method evaluates the financial return derived from investments made in human resource practices and initiatives. By analyzing the costs associated with HR programs against the benefits they generate—in terms of improved productivity, reduced turnover, and enhanced employee performance—organizations can determine whether their HR strategies are yielding a positive return. ROI analysis allows leaders to quantify the impact of HR activities, making it a powerful tool for demonstrating the value of strategic human resource management to stakeholders. It also helps inform decisions about future investments in HR initiatives, ensuring that resources are allocated to strategies that provide the greatest benefit to the organization. In contrast, other methods such as comparative analysis, employee feedback surveys, and performance appraisal reviews may provide valuable insights but do not directly measure the financial effectiveness of HR management audits in the same way that ROI analysis does. Comparative analysis focuses on looking at data from different sources for benchmarking but may lack the financial perspective that ROI provides. Employee feedback surveys gauge employee satisfaction and engagement, and performance appraisal reviews assess individual employee performance, but neither addresses the overall financial implications of HR strategies.