Chapter 6 Managing Employee Separations, Downsizing, and Outplacement
1) An employee separation occurs when: A) employee turnover reaches maximum capacity. B) global competition increases beyond labor supply.
C)
an employee ceases to be a member of an organization. D) technologies are introduced into a new industry. 2) A company wants to know the rate at which employees voluntarily leave the firm. The company most likely needs to:
A)
measure its turnover rate. B) conduct an HR audit. C) implement a diversity audit. D) track reasons for discharges. 3) Companies most likely attempt to manage their turnover rates because of: A) potential problems associated with public relations.
B) legal requirements regarding layoff notifications. C) inadequate affirmative action plans.
D)
high employee replacement costs. 4) The costs of employee separations primarily depend upon which of the following? A) Whether the employee was a member of a protected class or not B) Whether the employee had a voluntary separation
C)
Whether the employee will be replaced or not D) Whether the employee was a new hire 5) Which of the following is a recruitment cost associated with employee replacement? A) Outplacement B) Reference checks C) Orientation
D)
Advertising 6) Which of the following factors is the LEAST common reason for turnover among Chinese workers? A) Lack of development opportunities
B)
Manager-employee relationships C) Insufficient compensation D) Tedious work 7) Which of the following is a selection cost of employee replacement? A) Advertising B) Outplacement C) Search firm fees
D)
Reference checks 8) Martin is reviewing HR's costs for interviewing, testing, and checking references for new hires. Martin is most likely reviewing the ________ costs of employee replacement.
A) training
B)
selection C) separation D)
recruitment 9) Which of the following is a replacement cost associated with training new employees? A) Employment testing B) Outplacement services C) Recruiter time
D)
Lost productivity 10) Which of the following is the most significant separation cost for employers? A) Search firm fees B) Lost productivity C) Outplacement assistance
D)
Compensation 11) The time and cost of exit interviews are part of the ________ costs of an employee separation.
A) recruitment B) selection C) training
D)
separation 12) Which term refers to an employee's final interview following separation?
A)
Exit interview B) Follow-up interview C) Appraisal interview D) Outplacement interview 13) Your company is planning a layoff. As you explain the process to the management team, you tell them that outplacement assistance is available, which means that the: A) employee will receive a
final interview.
B)
company will help departing employees find new jobs. C) company will measure the rate of employee separations. D) company can terminate the relationship with the employee for any reason. 14) What is the primary reason for holding exit interviews?
A) Providing counseling to departing employees B) Assisting
departing employees with job-search skills
C)
Determining the reason for the employee's departure D) Allowing the employee's co-workers to provide feedback 15) Carlie quit her job as a data analyst at APEX Designs, and she is scheduled to participate in an exit interview. Which of the following individuals would be the most appropriate to conduct Carlie's exit interview? A) Subordinate B) Co-worker
C)
HR representative D) Immediate supervisor 16) Sanford Enterprises provides outplacement assistance through its HR department. The firm is most likely attempting to: A) lower unemployment insurance taxes.
B)
help departing employees find jobs. C) improve employee motivation. D) comply with EEOC rules. 17) Which of the following is most likely true about employee separations?
A)
Salary savings often outweigh other separation costs. B) Innovation declines as people take their ideas with them. C) The best workers tend to quit, so workforce quality declines over time. D) Most separations are due to unfair employment practices by the employer.
18) Which of the following is most likely a benefit of employee separations for employers? A) Employees are grouped into teams.
B) The workforce becomes more homogenous. C) Surviving employees work more conscientiously.
D)
They open doors for promotion within the company. Additional Case 6.1
Central Enterprises is suffering an economic downturn, and the workforce needs to be reduced. Upper-level managers are debating the costs and benefits of various employee separations. Brian argues that the company needs to make immediate cuts to both management and labor. The
cuts need to be made in such a way that the scope of the company and its markets are not affected. The firm needs to do more with fewer people according to Brian.
Other managers want to take a long-term, less traumatic approach. According to Natalie, the firm has time to consider the problems and gradually reduce the workforce rather than making sudden staff cuts. Natalie points out that 35% of the workforce is over age 62.
The VP of HR, LaTisha, wants the least disruptive reduction process possible. LaTisha just finished a major labor negotiation with the union and is not ready for another. She points out that turnover has been fairly high. Along with considering workforce reductions, LaTisha wants to know why people are leaving the company voluntarily.
19)
Refer to Additional Case 6.1. To answer LaTisha's question about why people are leaving, the company should most likely institute: A)
outplacement services. B) orientation sessions.
C)
exit interviews. D) appraisals. 20) Yao-Huan is reviewing the
rate at which employees have been leaving his firm. He is reviewing the firm's turnover rate. Answer: TRUE
21) A firm with an extremely high turnover rate compared to other firms in the same industry most likely needs to address HR issues. Answer: FALSE
22) The costs to replace a departing employee primarily include: recruitment, selection, and long-term health care benefits. Answer: FALSE
23) Selection costs include relocation costs, training costs, orientation, and severance pay. Answer: FALSE 24) Marissa quit her current employer for a new job. She is talking with the director of HR about why she left. Marissa is most likely
receiving outplacement assistance. Answer: FALSE 25) When conducting exit interviews, the interviewer should be one of the employee's former supervisors. Answer: FALSE
26) Web-based exit interviews are used by firms that assume former employees may prefer to avoid face-to-face interaction. Answer: TRUE
27) Employee separations can stimulate
innovation and create opportunities for workplace diversity. Answer: TRUE
28) The termination of an employee's membership in an organization is referred to as ________. Answer: employee separation 29) The rate of employee separations in an organization is referred to as ________. Answer: turnover rate 30) The purpose of a(n) ________ is to find out the reasons why the employee is leaving or to provide counseling and/or assistance in
finding a new job. Answer: exit interview
31) A program in which companies help their departing employees find jobs more rapidly by providing them with training in job-search skills is called ________. Answer: outplacement assistance 32) Hernando is working with management to calculate the costs of employee turnover. What issues or costs should Hernando raise to management? Answer: Summary of suggested answer - The details of the answer will vary, but the costs should include:
• Recruitment - ads, recruiter time, etc. • Selection - interviewing, testing, relocation, etc. •
Training - orientation, lost productivity, trainer's time, etc. • Separation - benefits, unemployment, exit interview, etc.
33) What problems are frequently associated with early retirement programs? How can HR minimize such problems? What benefits might a firm experience from such employee separations? Answer: Summary of suggested answer -
Problems -
• too many participate • employees leave who you want to keep • leaving employees become competitors, some employees feel coerced into participation by their managers Solutions -
• set criteria to restrict
the total number eligible • plan to hire back, as consultants, any good employees who got away • explain to managers what they can and cannot say • don't start changing performance evaluations, lower raises, or hint at possible layoffs to older employees Benefits -
• reduced labor costs • replacement of poor performers • increased motivation
• opportunity for greater diversity Additional Case 6.3
MedEquip, a medical services company with 500 employees, has experienced an extensive business downturn, and a layoff is necessary. MedEquip managers expect a layoff to be problematic because the firm made verbal commitments to workers for
lifetime employment. You are an HR consultant brought in to assist with the layoff. The firm has also hired a PR specialist to handle the press releases and public communications about the layoff. Although MedEquip is a large company, the firm has built a family atmosphere. Corporate headquarters is located in a small community of about 10,000 people.
The firm is planning to implement a layoff of 20% of its hourly and managerial employees. Because of time
demands and financial pressures, the layoff will occur in 30 days. The firm plans to use work performance as the layoff criterion. Three areas of the business will be affected: MIS, facilities, and accounting. Management is concerned about security in these areas.
Olivia, a middle manager who will not be laid off, has decided to hold group meetings with the units affected by the layoff. Employees will not receive information in writing regarding the layoff
to avoid litigation issues. Instead, affected employees will receive verbal communications from Olivia about the layoff. Employees at the firm who are not losing their jobs will receive emails that summarize the current situation at MedEquip.
34)
Refer to Additional Case 6.3. Which of the following questions is LEAST relevant to MedEquip at this time? A) How will MedEquip's community reputation be affected? B) How can MedEquip maintain the morale of surviving employees?
C)
How do MedEquip's competitors handle employee security during layoffs? D) What policies exist regarding separation pay for laid-off MedEquip employees? 35) Your CEO asks you, as the director of HR, to lead a layoff planning session. What layoff alternatives are available to the firm? If layoffs are necessary, what separation costs would the firm most likely incur? Answer: Summary of suggested answer -
Alternatives:
• change employment policies using attrition and/or a hiring freeze • redesign jobs using bumping • job sharing, reducing hours, etc. • change pay and benefits policies, such as pay freezes, pay cuts, profit sharing, and training. Separation Costs:
• separation pay • benefits • unemployment insurance costs • exit interviews • outplacement
36) Resignations and retirements are examples of: A) essential downsizing measures. B) involuntary
separations.
C)
voluntary separations. D) discharges. 37) Studies show that approximately ________ of voluntary employee separations are avoidable. A) 20% B) 40% C) 60%
D)
80% 38) Voluntary separations may include:
A)
early retirements. B) hiring freezes. C) discharges. D) job redesigns. 39) Similar to a quit, a ________ is initiated by the employee, but in this case the employee is unlikely to search for another job.
A) layoff
B)
retirement C) discharge D) buyout 40) Sara is 57 years old and she has been
a division manager for Elf Cookies for 32 years. Recently, the business has seen an increase in efficiency and has a surplus of labor. Elf Cookies is offering employees who are 55 and older, and who have worked for the company for over 30 years, specific benefits and financial incentives to retire within the next 60 days. Sara does so. She has: A) quit. B) been bought out.
C)
taken early retirement. D) been discharged. 41) The decision to terminate an employee is management's role. HR's primary role is to: A) implement outplacement services immediately. B) serve as the employee's advocate against management.
C)
make certain the employee receives due process. D) document poor performance so the termination can be justified. 42) Alex is a first-line supervisor with an employee who has a performance problem. After coaching the employee with no improvement, Alex decides to terminate the employment relationship. Which term refers to this type of
separation? A) Layoff
B)
Discharge C) Rightsizing D) Early retirement 43) Bertha wishes to discharge
one of her poorly performing employees. She has tried progressive discipline with no effect. She asks you, the HR manager, what she must do to discharge the employee. You should most likely tell her the policy and procedures, and then ask her if she has ________ in order to protect the company from a wrongful discharge suit.
A)
documented the inappropriate behavior B) given sixty days notice as required by law C) used non-progressive disciplinary actions D) analyzed the department's diversity levels 44) Delmus' performance reports have been increasingly poor, and he seems to have negative
relationships with other workers in his department. His line manager has taken him aside twice to discuss his behavior and work and has offered him time to improve, but there has been very little positive progress. Management decides to end the employment relationship with Delmus. This is an example of a: A) layoff. B) quit.
C)
discharge. D) buyout. 45) The primary difference between a layoff and a discharge is: A) a layoff is an involuntary separation and a discharge is a voluntary separation.
B) a layoff is a voluntary separation and a discharge is an involuntary separation. C) a discharge
occurs when the company's strategy forces it to reduce its workforce and a layoff occurs when there is a poor fit between the employee and the organization.
D)
a layoff occurs when the company's strategy forces it to reduce its workforce and a discharge occurs when there is a poor fit between the employee and the organization.
46) Layoffs are most likely to occur because: A) the firm offers lucrative incentives to reduce the workforce. B) adequate documentation exists of the worker's poor performance. C) a poor fit exists between the employee and the company.
D)
the company's strategy forces a reduction in its workforce. 47) All of the following are primary reasons
for layoffs EXCEPT: A) mergers
B)
misconduct C) global competition D) technology advancements 48) Dixon
Enterprises needs to reduce its long-term workforce. The firm wants to reduce the scale and scope of its business to improve financial performance. The company is most likely: A) conducting a layoff.
B)
downsizing. C) buying out the workforce. D) rightsizing. 49) If a business is
downsizing, it is most likely: A) offering training and development opportunities to new hires. B) improving worker efficiency through reorganization.
C)
reducing the size and scope of the business. D) offering early retirements to older workers. 50) A firm with too many management layers and bureaucratic work processes would most likely benefit from:
A)
rightsizing. B) discharges. C) downsizing. D) early retirements. 51) The major difference between downsizing and rightsizing is that: A) rightsizing reduces the size and scope of a business, while downsizing reorganizes the business. B) more workers are likely to lose their jobs during rightsizing than during downsizing.
C)
downsizing reduces the size and scope of a business, while rightsizing reorganizes the business.
D) rightsizing attempts to improve financial performance, while downsizing attempts to increase efficiency. Additional Case 6.1
Central Enterprises is
suffering an economic downturn, and the workforce needs to be reduced. Upper-level managers are debating the costs and benefits of various employee separations. Brian argues that the company needs to make immediate cuts to both management and labor. The cuts need to be made in such a way that the scope of the company and its markets are not affected. The firm needs to do more with fewer people according to Brian.
Other managers want to take a long-term,
less traumatic approach. According to Natalie, the firm has time to consider the problems and gradually reduce the workforce rather than making sudden staff cuts. Natalie points out that 35% of the workforce is over age 62.
The VP of HR, LaTisha, wants the least disruptive reduction process possible. LaTisha just finished a major labor negotiation with the union and is not ready for another. She points out that turnover has been fairly high. Along with
considering workforce reductions, LaTisha wants to know why people are leaving the company voluntarily.
52) Refer to Additional Case 6.1. Brian would most likely advocate a strategy of:
A) attrition. B) downsizing.
C)
rightsizing. D) early retirements. Additional Case 6.4
Organizers, Inc. has implemented new business technologies that require
fewer employees. Paul, the firm's CEO, sees the need to eliminate some middle managers and institute work teams to eliminate ineffective or unnecessary work processes. He believes that such changes won't be costly to the business. Most of the middle managers have been with the company anywhere from 10-15 years but are a long way from retirement.
One specific problem that Paul recognizes involves Zena, an upper-level manager. Zena has been coming to work
late, missing deadlines on assignments, and refusing to complete an important assignment. Paul has warned Zena personally about the consequences for further actions and has even meted out several proscribed disciplinary actions against Zena. Her work habits have not improved, and Paul feels he may have to take further action.
53) Refer to Additional Case 6.4. By Paul's estimation, Organizers, Inc. most likely needs to do which of the following to improve efficiency? A) Implement internship opportunities B) Perform a large-scale layoff C) Downsize
D)
Rightsize 54) Recent studies have shown that 80% of voluntary separations are unavoidable. Answer: FALSE
55) A quit and a retirement are similar types of employee separations since both are initiated by the employee. Answer: TRUE
56) Employers can force an employee to retire
if the employee is 65 years of age or older. Answer: FALSE 57) Involuntary separation results from one of two conditions: 1) economic necessity or 2) a poor fit between the employee and the organization. Answer: TRUE
58) Rightsizing is synonymous with downsizing. Answer: FALSE
59) ________ is a separation that occurs when an employee decides, for
personal or professional reasons, to end the relationship with the employer. Answer: Voluntary separation
60) A separation that occurs when an employer decides to terminate its relationship with an employee due to economic necessity or a poor fit between the employee
and the organization is called ________. Answer: involuntary separation
61) ________ is a company strategy to reduce the scale and scope of its business in order to improve the company's financial performance. Answer:
Downsizing
62) The process of reorganizing a company's employees to improve their efficiency is referred to as ________. Answer: rightsizing
63)
________ is an employment policy designed to reduce the company's workforce by not refilling job vacancies that are created by turnover. Answer: Attrition
Additional Case 6.4 Organizers, Inc. has implemented
new business technologies that require fewer employees. Paul, the firm's CEO, sees the need to eliminate some middle managers and institute work teams to eliminate ineffective or unnecessary work processes. He believes that such changes won't be costly to the business. Most of the middle managers have been with the company anywhere from 10-15 years but are a long way from retirement.
One specific problem that Paul recognizes involves Zena, an upper-level
manager. Zena has been coming to work late, missing deadlines on assignments, and refusing to complete an important assignment. Paul has warned Zena personally about the consequences for further actions and has even meted out several proscribed disciplinary actions against Zena. Her work habits have not improved, and Paul feels he may have to take further action.
64)
Refer to Additional Case 6.4. Paul believes strongly in trying to provide lifetime employment and will use a layoff only as a last resort. What would be the best strategy to reduce middle management?
A) Offering early
retirement to employees in middle management. B) Instituting a pay freeze only for employees in middle management. C) Encouraging employees in middle management to take
voluntary time off for at least 60 days.
D)
Developing HR policies regarding the use of pay incentives to encourage middle managers to quit.
65) What is an involuntary separation? What are some examples of involuntary separations? How can the difficulties of involuntary separations be managed with outplacement programs? Answer: An involuntary separation occurs
when management decides to terminate its relationship with an employee due to (1) economic necessity or (2) a poor fit between the employee and the organization. Involuntary separations are the result of very serious and painful decisions that can have a profound effect on the entire organization and especially on the employee who loses his or her job. A discharge results from poor performance or a failure to change unacceptable behavior. Layoffs are large-scale discharges related to economic
necessity and the individual does not necessarily have a direct cause for his/her discharge. These can affect the whole organization. Downsizing/rightsizing is the concept of getting the organization smaller in scope (downsizing) or getting it to a more efficient size (rightsizing). An outplacement program can help a firm control the disruption caused by layoffs and other employee separations. The most important of these goals are (1) reducing the morale problems of employees who are about to be
laid off so that they remain productive until they leave the firm, (2) minimizing the amount of litigation initiated by separated employees, and (3) assisting separated employees in finding comparable jobs as quickly as possible. In addition, providing an outplacement service can help keep the remaining employees focused on their work. 66) One of the most popular alternatives to layoffs is: A) inducing quits.
B)
offering early retirement. C) providing outplacement services. D) transferring workers to other plants. 67) What are the two primary features of early retirement programs? A) Exit interviews and open windows
B)
Open windows and financial incentives C) Outplacement services and financial incentives D)
Health-care benefits and lump-sum payments 68) Elizabeth is a 59-year-old account representative at a large bank. Due to the increasing popularity of
online banking, the bank has more employees than it needs. Recently, the bank has offered early retirement to account representatives between the ages of 55 and 65 who have been with the company for a minimum of 15 years. Four employees, including Elizabeth, meet these requirements. It is most likely that: A) the bank is violating
the Equal Pay Act by forcing female employees to retire. B) the bank is violating the Age Discrimination Act by forcing Elizabeth to retire. C) Elizabeth has received
poor performance appraisals for many years.
D)
Elizabeth must make her decision by a specific date. 69) It is most likely true that
early retirement programs:
A)
can substantially reduce the size of a company's workforce. B) usually drive stock prices up because of the reduced overhead. C) have minimal effect on reducing the size of a company's workforce. D) typically require little effort from HR to generate large financial returns. 70) Which of the following is a common problem with early retirement programs? A)
Insufficient management participation B) Short-term cash flow issues for the firm C) Excessive unplanned health-care costs
D)
Too much participation by eligible employees 71) A firm can best manage participation
in an early retirement program by:
A)
restricting the program to areas of the business with a redundancy of employees. B) outsourcing highly skilled employees to competing firms. C) offering the program only to employees with poor performance appraisals. D) requiring participating employees to sign no-compete agreements.
72) Teresa, a manager at FSE Manufacturing, wants to help employees make decisions about early retirement. As an HR manager, you should most likely caution Teresa that certain behaviors on her part will appear coercive. Which of the following activities should Teresa most likely avoid in this
situation?
A)
Suddenly lowering an employee's performance appraisals which have been good over past years
B) Discussing the specific details of the early retirement program with the employees C) Offering older employees the opportunity to bump younger employees
D) Implementing an across-the-board pay cut 73) The key to avoiding lawsuits over early retirement programs is to: A) give preferential treatment to protected-class individuals.
B)
treat all employees the same regardless of their age. C) study the probable impact on the local community. D) implement layoffs on a regular basis. Additional Case 6.1
Central Enterprises is suffering an economic downturn, and the workforce needs to be reduced. Upper-level managers are debating the costs and benefits of various employee separations. Brian argues that the company needs to make immediate cuts to both management and labor. The cuts need to be made in such
a way that the scope of the company and its markets are not affected. The firm needs to do more with fewer people according to Brian.
Other managers want to take a long-term, less traumatic approach. According to Natalie, the firm has time to consider the problems and gradually reduce the workforce rather than making sudden staff cuts. Natalie points out that 35% of the workforce is over age 62.
The VP of HR,
LaTisha, wants the least disruptive reduction process possible. LaTisha just finished a major labor negotiation with the union and is not ready for another. She points out that turnover has been fairly high. Along with considering workforce reductions, LaTisha wants to know why people are leaving the company voluntarily.
74) Refer to Additional Case 6.1. What relatively quick, but less traumatic, reduction strategy is suggested by the make-up of the workforce? A) Rightsizing B) Employee training C) A job redesign
program
D)
An early retirement program Additional Case 6.2
Terra Alta employs nearly 15,000 workers worldwide. The firm wants to reduce its workforce through an early retirement program. The firm has hired you to organize and implement the program.
Employees over age 58 are eligible, but managers
don't want to lose key older employees. Program eligibility should be limited to a short period of time. Terra Alta managers need a fairly accurate estimate of how many employees will participate in the program.
Terra Alta expects a legal and humane program that avoids litigation issues. Employees should have an accurate picture of their future if they decide to accept early retirement.
75) Refer to Additional Case 6.2. How could Terra Alta most likely prevent key, older workers from leaving?
A)
Restricting eligibility to areas with redundant employees B) Establishing an immediate hiring freeze C) Lowering the eligibility requirements D) Shortening the eligibility time frame 76) Refer to Additional Case 6.2. To avoid any legal problems, what would you most likely recommend? A) Offer minority employees larger severance packages to minimize discrimination concerns.
B)
Tell managers not to treat older workers any differently than they have in the past. C) Implement a hiring freeze at the same time as early retirement is offered. D) Avoid giving more than 30 days advance warning of a layoff. 77) Refer to
Additional Case 6.2. How could Terra Alta best manage the number of participants in the early retirement program? A) Guarantee jobs to key employees and implement job redesign.
B)
Survey senior employees and fine tune incentive packages. C) Hire retirees as part-time consultants with stock options. D) Develop an estimate based on industry data. 78) Early retirement programs generally are offered by a business for only a short
period of time and consist of financial incentives to encourage senior employees to retire earlier than they had planned. Answer: TRUE 79) Early retirement programs are simple ways to make small reductions in a firm's workforce. Answer: FALSE 80) A firm that tells employees that if they don't take early retirement they may still lose their jobs due to future layoffs is most
likely open to age discrimination charges. Answer: TRUE 81) A company can save up to 20% of its payroll during lows in its business cycle by instituting a profit-sharing compensation program. Answer: TRUE
82) ________ is an employment policy designed to reduce the company's workforce by not hiring any new employees into the company. Answer: Hiring freeze
Additional Case 6.2
Terra Alta employs nearly 15,000 workers worldwide. The firm wants to reduce its workforce
through an early retirement program. The firm has hired you to organize and implement the program.
Employees over age 58 are eligible, but managers don't want to lose key older employees. Program eligibility should be limited to a short period of time. Terra Alta managers need a fairly accurate estimate of how many employees will participate in the program.
Terra Alta expects a legal and humane program that avoids
litigation issues. Employees should have an accurate picture of their future if they decide to accept early retirement.
83) Refer to Additional Case 6.2. Given Terra Alta's desires, which of the following would be the most appropriate HR policy?
A) Creating a formula that accelerates retirement eligibility for low performing workers B) Implementing outplacement service programs for retiring employees C) Mandating a leave of absence for all employees near retirement
D)
Establishing a 30-day open window for early retirement 84) A layoff is typically implemented by an organization when:
A)
alternative methods for reducing labor costs are unavailable. B) most employees have less than 15 years of experience. C) the firm employs fewer than 100 workers. D) outplacement services are successful. 85) Once a firm has decided to reduce its workforce through voluntary means, its next choice is: A) whether to discharge employees. B) if it should downsize or rightsize.
C)
what outplacement services to offer. D) if any alternative strategies are available. 86) The least disruptive way to cut labor costs is through: A) layoffs.
B)
attrition. C) job redesign. D) hiring freezes. 87) Springtime Water has recently lost a small number of employees through quits and retirements. The company has decided not to replace these employees. Marion is most likely reducing its
workforce by: A) outplacement.
B)
attrition. C) rightsizing. D) downsizing. 88) Which of the following alternatives to layoffs is LEAST intrusive on the day-to-day management of a business?
A) Making changes in job design B) Implementing a pay freeze C) Changing benefits policies
D)
Modifying employment policies 89) A "rings of defense" strategy in terms of employment security and workforce reductions is when a firm: A) freezes employee wages to avoid laying off workers. B) uses contingency workers for a flexible workforce. C) implements job sharing in order to keep workers.
D)
provides job security for its core employees. 90) An example of a change in employment policy that will help reduce the size of a company's workforce is: A) reducing work hours. B) implementing training.
C) offering profit sharing.
D)
cutting part-time employees. 91) Farley Enterprises wants to reduce its labor costs in the LEAST disruptive method that is available. Which of the following is most appropriate?
A) Layoffs
B)
Attrition C) Paycuts D) Relocation 92) Which of the following is an employment policy that serves as an alternative to layoffs? A) Job sharing
B)
Hiring freeze C) Demotions D) Pay freeze 93) Transferring and relocating employees are both ways to reduce employee costs through which function?
A) Employment policies B) Pay and benefits policies
C)
Job design methods D) Outsourcing methods 94) Cuts in overtime pay, profit sharing, and encouraging employees to take leave days are all ways to reduce employee costs in what area? A) Employment policies
B)
Pay and benefits C) Job design D) Training 95) Steve's job has been eliminated. Steve, a senior employee, will take a job in a different unit from an employee with less seniority. Steve's employer is most likely using the practice of:
A) attrition.
B)
bumping. C) job redesign. D) rightsizing. 96) Which term refers to reconfiguring one job into two part-time jobs?
A)
Job sharing B) Job enlargement C) Rightsizing D) Bumping 97) You are the head of an HR department for a large department store. The general manager, Frank, comes to you claiming that a pay freeze is needed in order to reduce costs to the store. Frank wants to freeze pay for the retail staff but not for department line managers. What would be your most appropriate response? A) The strategy will encourage the retail staff to advance towards higher positions.
B)
The pay freeze should be the same across the board. C) A layoff would be a much better solution. D) The firm should institute a ring of defense. 98) A company that institutes profit sharing can save approximately ________ of
its payroll costs during downturns in the business cycle. A) 50% B) 35%
C)
20% D) 5% 99) Which of the following is a long-term pay policy that can protect jobs and control labor costs by linking compensation to production? A)
Internships B) Overtime pay
C)
Profit sharing D) Early retirement 100) Goodwin, Inc. has recently proposed a plan to base 15% of employees' salaries upon their accomplishment of specific performance goals. Goodwin, Inc. is most likely proposing what type of pay policy? A)
Profit sharing
B)
Variable pay C) Pay freezing D)
Bumping 101) Which of the following requires employers to inform employees of impending layoffs? A) ERISA B) Title VII C) EO 11426
D)
WARN Act 102) According to the WARN Act, which of the following must provide warning
of an impending layoff? A) All federal contractors B) All employers regardless of size C) Any employer laying off more than 25 workers
D)
Any employer with more than 100 employees 103) Workers of companies with over 100
employees are entitled to ________ if they are not given 60 days advance warning in cases of a mass separation. A) 30 days income
B)
60 days income C) 90 days income D) continuing health benefits 104) Critics of the WARN Act argue that employees should not be given notification because: A) litigation is more likely to occur. B) employees will demand more pay.
C)
employee productivity is likely to decline. D) competitors may try to hire departing workers. 105) York Enterprises is a unionized firm on the verge of conducting layoffs. Which of the following factors is most likely the primary determinant in layoff decisions? A) Age B) Salary
C)
Seniority D) Performance 106) The use of seniority as a layoff criterion: A) is not common among most modern organizations.
B)
tends to impact women and minorities more than other groups. C) tends to be the most difficult layoff criterion to implement. D) is the only safe option in today's HRM legal environment. 107) The use of seniority as a layoff criterion has
some drawbacks, including: A) adverse impacts on white males. B) the frequent contests from unions.
C)
the loss of top performers. D) documentation difficulties. 108) The use of performance as a layoff criterion: A) usually protects firms from discrimination suits. B) disproportionately affects women and minorities. C) tends to eliminate older workers rather than younger workers.
D)
can be problematic due to inconsistent management documentation. 109) Glenda has
been an employee at your curtain manufacturing company for over 6 years. During the past six months, Glenda's productivity has decreased by almost 15 percent as documented by her manager. In addition, you need to reduce the workforce in order to trim employee costs. Your best option is to: A) bump Glenda from her job with a younger
employee.
B)
use performance as the basis for laying off Glenda. C) force Glenda to take early retirement. D)
offer Glenda incentives to quit. 110) When implementing a layoff, employees should first be informed: A) through a company memo. B) by their supervisor over the phone. C) in a work unit meeting with HR present.
D)
by their supervisor in a face-to-face meeting. 111) The information given in the
initial meeting between a manager and an employee who is being laid off should include: A) reasons why the employee is being laid off. B) time for the employee to debate
the layoff. C) comments about the employee's recent appraisal.
D)
how much severance pay the employee will receive. 112) While no time is a good time
for a termination, the best time seems to be:
A)
midweek. B) Friday afternoon. C) during vacation. D) early in the workweek. 113) As the head of the HR department for a large technology-production company, you have been notified that the
company is preparing for a mass layoff. Which of the following should be your greatest priority in preparing for the layoff?
A) Delaying notification to employees B) Limiting contact with the media
C)
Coordinating media relations D) Organizing outplacement services 114) Which of the following is most common among survivors of a layoff? A) Increased diversity B) Improved morale
C)
Increased absenteeism D) Improved productivity 115) Management can most likely minimize problems with the remaining workforce after a layoff by:
A)
explaining the financial reasons for the layoff. B) minimizing communication to eliminate rumors. C) initiating close supervision of the remaining workers. D) preparing for litigation with former and current employees. 116) Which of the following is LEAST likely to be associated with layoff survivors? A) Performance concerns
B)
Compensation losses C) Work group changes D) Additional tasks 117) Which of the following actions by an HR manager would most likely improve the morale of layoff survivors? A) Avoiding discussion of the firm's financial issues B) Mandating new work procedures
C)
Encouraging workers to set goals D) Discussing outplacement options Additional Case 6.1
Central Enterprises is suffering an economic downturn, and the workforce needs to be
reduced. Upper-level managers are debating the costs and benefits of various employee separations. Brian argues that the company needs to make immediate cuts to both management and labor. The cuts need to be made in such a way that the scope of the company and its markets are not affected. The firm needs to do more with fewer people according to Brian.
Other managers want to take a long-term, less traumatic approach. According to Natalie, the firm has time
to consider the problems and gradually reduce the workforce rather than making sudden staff cuts. Natalie points out that 35% of the workforce is over age 62.
The VP of HR, LaTisha, wants the least disruptive reduction process possible. LaTisha just finished a major labor negotiation with the union and is not ready for another. She points out that turnover has been fairly high. Along with
considering workforce reductions, LaTisha wants to know why people are leaving the company voluntarily.
118) Refer to Additional Case 6.1. Which of the
following layoff alternatives would LaTisha most likely support?
A)
Implementing a hiring freeze B) Instituting pay cuts C) Offering job sharing D) Retraining workers Additional Case 6.3
MedEquip, a medical services company with 500 employees, has experienced an extensive
business downturn, and a layoff is necessary. MedEquip managers expect a layoff to be problematic because the firm made verbal commitments to workers for lifetime employment. You are an HR consultant brought in to assist with the layoff. The firm has also hired a PR specialist to handle the press releases and public communications about the layoff. Although MedEquip is a large company, the firm has built a family atmosphere. Corporate headquarters is located in a small community of about 10,000
people.
The firm is planning to implement a layoff of 20% of its hourly and managerial employees. Because of time demands and financial pressures, the layoff will occur in 30 days. The firm plans to use work performance as the layoff criterion. Three areas of the business will be affected: MIS, facilities, and accounting. Management is concerned about security in these areas.
Olivia, a middle manager who will not be
laid off, has decided to hold group meetings with the units affected by the layoff. Employees will not receive information in writing regarding the layoff to avoid litigation issues. Instead, affected employees will receive verbal communications from Olivia about the layoff. Employees at the firm who are not losing their jobs will receive emails that summarize the current situation at MedEquip.
119) Refer to Additional Case 6.3. Given the situation at MedEquip, which of the following statements is most likely true?
A)
MedEquip must offer laid-off employees 60 days of income to avoid WARN Act violations. B) MedEquip is in violation of the WARN Act and must extend the layoff deadline by 30 days. C) MedEquip is not subject to the WARN Act because the business is not bankrupt. D) MedEquip is not subject to the WARN because
the business is too small. 120) Refer to Additional Case 6.3. As an HR consultant, you should most likely recommend:
A)
escorting affected employees off-site as soon as they are notified. B) holding the large group termination session at the end of the week. C) requiring surviving employees to start working overtime and weekends. D) informing employees that they will be laid off through a corporate memo. Additional Case 6.4
Organizers, Inc. has implemented new business technologies that require fewer employees. Paul, the firm's CEO, sees the need to eliminate some middle managers and institute work teams to eliminate ineffective or unnecessary work processes. He believes that such changes won't be costly to the business. Most of the middle managers have been with the company anywhere from 10-15 years but are a long way from
retirement.
One specific problem that Paul recognizes involves Zena, an upper-level manager. Zena has been coming to work late, missing deadlines on assignments, and refusing to complete an important assignment. Paul has warned Zena personally about the consequences for further actions and has even meted out several proscribed disciplinary actions against Zena. Her work habits have not improved, and Paul feels he may have to take further action.
121) Refer to Additional Case 6.4. Paul's actions regarding Zena are most likely an example of: A) discrimination. B) forced retirement.
C)
progressive discipline. D) a ring of defense. 122) A
firm's overall HR strategy influences its employee workforce reduction strategy. Answer: TRUE 123) Generally, the first alternative to layoffs that companies use to reduce their labor costs is to redesign existing jobs. Answer: FALSE
124) Changes in job design may include: job sharing, rings of defense, bumping, and job relocation. Answer: FALSE
125) WARN
requires employers with 200 or more employees to give 100 days' warning of layoffs of more than 10% of its employees. Answer: FALSE
126) One of the most commonly used layoff criterion is job seniority. Answer: TRUE
127) Basing a layoff on performance can be a legal hazard for an employer if the employee's performance has not been well documented over a period of time. Answer: TRUE
128) In a termination meeting, a manager should interject personal remarks and discuss future opportunities for the employee to soften the blow of job loss. Answer: FALSE
129) Companies should communicate the reasons for a layoff and provide some emotional support to the survivors of a layoff in order to help them manage their layoff stress. Answer: TRUE 130) In order to reassure surviving employees of recent layoff information, they should be informed of the reasons
for the layoff and how it occurred. Answer: TRUE
131) A federal law requiring U.S. employers with 100 or more employees to give 60 days' advance notice to employees who will be laid off as a result of a plant closing or a mass separation of 50 or more workers is the
________. Answer: Worker Adjustment and Retraining Notification Act (WARN) of 1988
132) As the director of HR, you have the responsibility of implementing a layoff for a medium-sized company. List the key issues that must be settled in the implementation.
Answer: Summary of suggested answer -
Key issues -
• notifying employees • explaining WARN • developing layoff criteria • communicating to laid-off employees • coordinating media relations • maintaining security • reassuring survivors • deciding whether or not to offer outplacement 133) How can a firm maintain the morale of employees who survive a layoff? How can outplacement services improve the morale and self-esteem of displaced workers? Answer: Summary of suggested answer -
•
Jobs may be redesigned or enriched to keep the employees interested in their jobs. • Survivors should be given the reasons for the layoff and how the layoff process occurred. •
Emotional support by small-group discussions, large-group pep talks, or even a party can be held in order to bolster the confidence and camaraderie of the employees. Outplacement programs usually provide counseling to help employees deal with the emotions associated with job loss–shock, anger, denial, and lowered self-esteem. Because the family may suffer if the breadwinner becomes
unemployed, sometimes family members are included in the counseling as well.
134) Companies provide outplacement to terminated workers for a number of reasons, such as:
A) meeting federal requirements. B) decreasing unemployment taxes. C) lowering absenteeism among remaining workers.
D)
reducing morale problems associated with laid-off workers. 135) Which of the following typically handles outplacement activities?
A)
External consultants hired by the firm B) Local employment agencies C) HR specialists at the firm D) Federal agencies 136) The use of outplacement services among large corporations serves all of the following goals EXCEPT: A) minimizing litigation.
B)
implementing HR strategies. C) protecting the firm's reputation. D) helping separated workers find jobs. 137) Anita, an HR manager, has been asked to design a job-search assistance program as part of her employer's outplacement services. Which of the following skills
would LEAST likely be addressed in the program? A) Resume writing B) Career planning
C)
Downsizing D) Interviewing 138) An important goal
of outplacement services for laid-off workers is to help them remain productive, pending their layoff. Answer: TRUE
139) Job-search assistance and emotional support are two functions of a firm's job design services. Answer:
FALSE
What is the primary difference between involuntary termination and voluntary quizlet?
What is the primary difference between voluntary and involuntary termination from the perspective of the operation? Involuntary is done for the well-being of the operation and voluntary for the individual.
What is the difference between the actual and the budgeted goals when the goal is not met?
Actuals are defined as the – the actual expenses and actual income generated throughout the year that contribute to actual revenue and cash flow. The difference between the actuals and your budget reflects your budget variance. A favorable variance shows positive numbers for your key performance indicators.
What is the purpose of follow up in change implementation strategy?
Follow-up shows that the task is important and allows the manager to predict better the workflow and longer goals that keep the company and team working. You need to know if people are doing what they are supposed to be doing and, if they are not, what you can do about it.
What is the difference between a training plan and a training lesson?
What is the difference between a training plan and a training lesson? The two terms are interchangeable, meaning the same thing. Lessons are used for hourly employees, whereas plans are for salaried employees. A plan organizes programs and a lesson organizes individual sessions.