Which kind of analysis is used when an organization is researching the possibility of replacing three workers with a machine capable of producing more units per hour?

Question

Options

• ATotal quality
• BProduction output
• CCost-benefit
• DSix Sigma

• B
  2% (1)
• C
  94% (50)
• D
  4% (2)

Explanation

When evaluating whether to replace human labor with automation, the appropriate analytical approach is a cost-benefit analysis (C). This type of analysis compares the total costs of an investment with its expected financial and operational benefits to determine overall feasibility and return on investment. At the SPHR level, cost-benefit analysis is a critical tool for strategic workforce planning and capital decision-making. In this scenario, HR and leadership would examine costs such as equipment purchase, maintenance, training, downtime, and potential workforce impacts, alongside benefits like increased productivity, reduced labor costs, consistency, and long-term Total quality (A) and Six Sigma (D) are methodologies focused on process improvement and defect reduction, not on evaluating financial trade-offs between labor and technology. Production output (B) is a metric rather than an analytical framework and does not account for costs, risks, or strategic implications. HR leaders play an important role by assessing human capital implications, including redeployment, reskilling, morale, engagement, and potential employee relations concerns. SPHR practice stresses that workforce-related costs and risks must be incorporated into financial analyses--not evaluated in isolation.

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