Question 1

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.

Accepted Answer

Treating all employees the same, regardless of age, is the key to avoiding age discrimination lawsuits related to early retirement programs. Age should not be a factor in determining who is offered early retirement; instead, the decision should be based on factors such as job performance or organizational needs. Giving preferential treatment based on age could make the program appear discriminatory, while regular layoffs could suggest an ongoing pattern of age discrimination. Studying the impact on the community may be a responsible consideration, but it is not directly related to avoiding lawsuits over early retirement programs.

Question 2

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.

Accepted Answer

This statement suggests that the employer is using age as a factor in determining who may be laid off, which is a form of age discrimination. Pressuring employees to retire early is also a tactic that may disproportionately affect older workers, making it more likely that this type of policy could be challenged in court.

Question 3

________ is a company strategy to reduce the scale and scope of its business in order to improve the company's financial performance.

Accepted Answer

The answer of ________ is a company strategy to reduce...

Question 4

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.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.

Accepted Answer

Treating older workers differently than in the past could be seen as age discrimination, which would lead to legal problems. Offering larger severance packages to minority employees could also be seen as discriminatory. Implementing a hiring freeze at the same time as the early retirement program could help minimize layoffs and reduce potential lawsuits, but it would not necessarily avoid litigation issues related to age discrimination. Avoiding giving more than 30 days advance warning of a layoff would violate the WARN Act and could lead to legal repercussions. Therefore, the best option is to treat older workers the same as in the past to avoid any allegations of age discrimination.

Question 5

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.
-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

Accepted Answer

The fact that 35% of the workforce is over age 62 suggests that an early retirement program could be a relatively quick but less traumatic reduction strategy. This would allow older employees to retire voluntarily and potentially receive incentives, while avoiding the need for sudden staff cuts or layoffs. However, the company would need to carefully consider how this program would affect the overall skill and experience level of the workforce.

Question 6

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.

Accepted Answer

Early retirement programs are designed to encourage older employees to retire early and can result in a substantial reduction in the company's workforce. This reduction can help the company cut costs and improve efficiency.

Question 7

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

Accepted Answer

Suddenly lowering an employee's performance appraisals can be seen as a form of retaliation or coercion, and could potentially be illegal. It is important to avoid any actions that could be perceived as pressuring employees to take early retirement.

B, C, and D are all reasonable actions that can be taken as part of an early retirement program, as long as they are implemented fairly and without coercion. It is important to discuss the program with employees and offer them the opportunity to make an informed decision, as well as ensure that younger employees are not unfairly impacted by the program. A pay cut could also be considered as part of the program, but again, it's important to avoid any appearance of coercion.

Question 8

What is an involuntary separation? What are some examples of involuntary separations? How can the difficulties of involuntary separations be managed with outplacement programs?

Accepted Answer

The answer of What is an involuntary separation? What are...

Question 9

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.

Accepted Answer

The bank's offer of early retirement to a specific age group of employees who meet certain tenure requirements suggests that employees, including Elizabeth, are given a choice rather than being forced out, implying a decision deadline is likely in place. This does not inherently indicate discrimination or poor performance.

Question 10

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

Accepted Answer

Early retirement programs can sometimes lead to too much participation by eligible employees, resulting in a loss of experienced workers and potential skill gaps within the organization.

Question 11

Early retirement programs are simple ways to make small reductions in a firm's workforce.

Accepted Answer

Early retirement programs, while potentially reducing the workforce, can be complex to implement due to legal, financial, and morale implications, and may not always result in only small reductions.

Question 12

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.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.

Accepted Answer

Surveying senior employees and fine tuning incentive packages can help Terra Alta best manage the number of participants in the early retirement program. This approach can help identify the employees who are most willing to retire and can help offer attractive packages to incentivize them to retire early. It can also help managers retain key older employees who are important to the success of the company. Additionally, surveying employees can help the company get an accurate estimate of how many employees will participate in the program, which is important for planning purposes.

Question 13

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.

Accepted Answer

Restricting the program to areas of the business with a redundancy of employees is the best way to manage participation in an early retirement program. This ensures that the program does not harm the core business operations and helps the company to reduce redundancies in areas that can still function without those employees. Outsourcing highly skilled employees to competing firms, offering the program only to employees with poor performance appraisals, and requiring participating employees to sign no-compete agreements can cause legal and ethical issues and damage the company's reputation.

Question 14

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.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

Accepted Answer

By restricting eligibility to areas with redundant employees, Terra Alta can incentivize older workers with valuable skills to stay in their current roles rather than taking an early retirement. This ensures that the firm doesn't lose key employees and can still reduce its overall workforce.

Question 15

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.

Accepted Answer

Early retirement programs are usually limited in duration and provide incentives to persuade senior employees to retire earlier than they had anticipated.

Question 16

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

Accepted Answer

Early retirement programs primarily feature open windows, which are periods during which employees can choose to retire early, and financial incentives, designed to make the option financially attractive.

Question 17

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

-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.

Accepted Answer

The answer of Additional Case 6.4 
Organizers, Inc. has implemented...

Question 18

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.

Accepted Answer

Offering early retirement allows employees who are close to retirement age to leave the company voluntarily, freeing up positions for younger employees who may be at greater risk of layoffs. It also offers a financial incentive to those who were already considering retirement. Additionally, it can improve morale by reducing the impact of layoffs on remaining employees.

Question 19

The process of reorganizing a company's employees to improve their efficiency is referred to as ________.

Accepted Answer

The answer of The process of reorganizing a company's employees...

Question 20

________ is an employment policy designed to reduce the company's workforce by not refilling job vacancies that are created by turnover.

Accepted Answer

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

Quiz 6: Managing Employee Separations, Downsizing, and Outplacement

The key to avoiding lawsuits over early retirement programs is to:

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.

________ is a company strategy to reduce the scale and scope of its business in order to improve the company's financial performance.

It is most likely true that early retirement programs:

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?

What is an involuntary separation? What are some examples of involuntary separations? How can the difficulties of involuntary separations be managed with outplacement programs?

Which of the following is a common problem with early retirement programs?

Early retirement programs are simple ways to make small reductions in a firm's workforce.

A firm can best manage participation in an early retirement program by:

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.

What are the two primary features of early retirement programs?

One of the most popular alternatives to layoffs is:

The process of reorganizing a company's employees to improve their efficiency is referred to as ________.

________ is an employment policy designed to reduce the company's workforce by not refilling job vacancies that are created by turnover.