Question 1

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.
-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

Accepted Answer

The most appropriate HR policy for Terra Alta would be to establish a 30-day open window for early retirement. This would provide a short and limited period of time for eligible employees to decide whether they want to participate in the program. Offering this option to employees over 58 years of age is legal and humane, and also ensures that key older employees can choose whether or not to participate. Providing a clear and accurate picture of their future if they decide to accept early retirement would also avoid any potential litigation issues. Offering outplacement service programs could also be a useful addition to the program, but not as the primary HR policy. Creating a formula based on performance may not be seen as fair or objective, and mandating a leave of absence for all employees near retirement is not a practical or viable solution.

Question 2

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

Accepted Answer

The answer of Which of the following alternatives to layoffs...

Question 3

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.

Accepted Answer

The practice that the employer is using is called "bumping," which is a process where a higher seniority employee who has had their job eliminated can take over the job of a lower seniority employee in a different unit. This ensures that the higher seniority employee can stay employed while the lower seniority employee loses their job.

Question 4

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.

Accepted Answer

Layoffs are usually a last resort, chosen when there are no other options available to reduce labor costs. If alternative methods such as reducing hours, freezing salaries or offering retirement packages do not work, the organization may be forced to resort to layoffs. The other options listed in choices B, C, and D are not relevant factors in determining when to implement a layoff.

Question 5

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%

Accepted Answer

Profit sharing can save a company about 20% of its payroll costs during downturns in the business cycle by adjusting the profit-sharing payouts according to the company's financial performance.

Question 6

The least disruptive way to cut labor costs is through:
A)layoffs.
B)attrition.
C)job redesign.
D)hiring freezes.

Accepted Answer

Attrition allows for natural turnover of employees through retirements, resignations, or terminations for cause without requiring immediate layoffs, which can negatively impact morale and productivity. It also allows for the opportunity to reassess and restructure job roles and responsibilities to better align with current needs, potentially eliminating unnecessary positions and tasks.

Question 7

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

Accepted Answer

Cuts in overtime pay and profit sharing directly affect pay and benefits, while encouraging employees to take leave days can reduce the amount of paid time off given to employees, also reducing pay and benefits costs. These measures are all aimed at reducing employee costs within the pay and benefits category.

Question 8

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

Accepted Answer

The proposal to base a portion of employees' salaries on specific performance goals is an example of variable pay, where compensation is tied to individual or organizational performance. Profit sharing involves distributing a portion of company profits to employees, pay freezing involves keeping salaries at the same level without increases, and bumping is a term used in union collective bargaining to describe the practice of moving employees to higher-paying jobs based on seniority.

Question 9

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.

Accepted Answer

Cutting part-time employees is the most direct way to reduce the size of a company's workforce. Reducing work hours or implementing training may lead to a decrease in productivity, and offering profit sharing does not necessarily result in a reduction in the number of employees.

Question 10

A company can save up to 20% of its payroll during lows in its business cycle by instituting a profit-sharing compensation program.

Accepted Answer

According to research, companies that offer profit-sharing can save up to 20% of their payroll during lows in their business cycle as it incentivizes employees to work harder and be more productive. This can lead to cost savings and increased profits for the company.

Question 11

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.

Accepted Answer

The company is not actively laying off employees or downsizing, but rather allowing natural attrition to reduce the workforce by not filling open positions. This is a form of workforce reduction known as attrition.

Question 12

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.

Accepted Answer

It is important to treat all employees fairly and equally. If a pay freeze is deemed necessary, it should be implemented consistently for all employees, including department line managers. This approach will promote a sense of fairness and reduce the risk of morale problems among employees. Additionally, it is important to consider alternative cost reduction strategies before resorting to layoffs or other drastic measures. A pay freeze may not be the only or best solution, but if implemented, it should be consistent for all employees. The other options presented (A, C, and D) are not appropriate in the context of a pay freeze for cost reduction purposes.

Question 13

________ is an employment policy designed to reduce the company's workforce by not hiring any new employees into the company.

Accepted Answer

The answer of ________ is an employment policy designed to...

Question 14

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

Accepted Answer

Profit sharing is a long-term pay policy that links compensation to production, as employees receive a portion of the company's profits based on their contribution to the company's success. This incentivizes employees to work harder and more efficiently, leading to increased productivity and profitability for the company. Additionally, profit sharing can help control labor costs in the long term by providing an alternative to annual raises that may be unsustainable.

Question 15

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

Accepted Answer

Attrition involves not filling open positions or replacing employees who leave the company voluntarily, resulting in a gradual reduction of labor costs without disrupting the current workforce. Compared to layoffs, paycuts or relocation, attrition is the least disruptive method available to reduce labor costs.

Question 16

Which term refers to reconfiguring one job into two part-time jobs?
A)Job sharing
B)Job enlargement
C)Rightsizing
D)Bumping

Accepted Answer

Job sharing refers to reconfiguring one job into two part-time jobs, usually with two employees sharing the responsibilities and hours of work. Job enlargement is the process of adding more tasks or duties to an existing job, while rightsizing refers to the process of aligning the size of an organization's workforce with its strategic objectives. Bumping refers to the practice of displacing a more junior employee in favor of a more senior employee during layoffs or other workforce reductions.

Question 17

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.

Accepted Answer

A "rings of defense" strategy is focused on providing job security for core employees. This involves implementing policies such as job rotation, cross-training, flexible work arrangements, and other measures that allow employees to feel valued and necessary to the company's success. By providing job security, a company can reduce turnover and the need for workforce reductions, while also boosting employee morale and productivity. Freezing wages or using contingent workers may provide short-term cost savings, but it does not address the underlying issues of job insecurity and lack of employee engagement. Job sharing may be a viable option, but it may not be feasible for all positions or industries. Thus, providing job security for core employees is the best option for a "rings of defense" strategy.

Question 18

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

Accepted Answer

The answer of Transferring and relocating employees are both ways...

Question 19

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.

Accepted Answer

Once a firm has decided to reduce its workforce through voluntary means, it should offer outplacement services to employees who will be leaving the organization. Outplacement services include career counseling, training, and assistance in finding new jobs. This helps the employees transition smoothly and also shows that the firm values its employees' well-being.

Question 20

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

Accepted Answer

The answer of Which of the following is an employment...

Quiz 6: Managing Employee Separations, Downsizing, and Outplacement

Which of the following alternatives to layoffs is LEAST intrusive on the day-to-day management of a business?

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 layoff is typically implemented by an organization when:

A company that institutes profit sharing can save approximately ________ of its payroll costs during downturns in the business cycle.

The least disruptive way to cut labor costs is through:

Cuts in overtime pay, profit sharing, and encouraging employees to take leave days are all ways to reduce employee costs in what area?

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?

An example of a change in employment policy that will help reduce the size of a company's workforce is:

A company can save up to 20% of its payroll during lows in its business cycle by instituting a profit-sharing compensation program.

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:

________ is an employment policy designed to reduce the company's workforce by not hiring any new employees into the company.

Which of the following is a long-term pay policy that can protect jobs and control labor costs by linking compensation to production?

Farley Enterprises wants to reduce its labor costs in the LEAST disruptive method that is available. Which of the following is most appropriate?

Which term refers to reconfiguring one job into two part-time jobs?

A "rings of defense" strategy in terms of employment security and workforce reductions is when a firm:

Transferring and relocating employees are both ways to reduce employee costs through which function?

Once a firm has decided to reduce its workforce through voluntary means, its next choice is:

Which of the following is an employment policy that serves as an alternative to layoffs?