Chapter 6 Managing Employee Separations, Downsizing, and Outplacement

51. Which of the following would be considered the first alternative to a layoff?

a) An early retirement option.

b) Changes in job design.

c) A discharge.

d) Downsizing.

e) A buyout.

52. Which of the following is an employment policy that could be used as an alternative to layoffs?

a) Job sharing.

b) Leaves of absence.

c) Demotions.

d) Pay cuts.

e) Relocation.

53. Transferring and relocating employees are both ways to reduce employee costs in what area?

a) Employment policies.

b) Pay and benefits.

c) Job design.

d) Training.

e) None of the above

54. 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.

e) None of the above

55. Marion’s water bottling company has recently lost a handful of employees through quits and retirement. The company has decided not to hire workers to replace these employees. Marion is reducing its workforce by:

a) layoffs.

b) voluntary separations.

c) attrition.

d) job redesign.

e) a hiring freeze.

56. A number of policies provide alternatives to layoffs. One of the least intrusive alternatives to the day-to-day management of the business is:

a) the use of job redesign.

b) implementing bumping policies.

c) changing pay and benefits policies.

d) changing employment policies.

e) conducting extra training to retool workers for new jobs.

57. A “rings of defense” strategy in terms of employment security and workforce reductions is when:

a) a union has workers at other plants supplying the firm.

b) a firm freezes wages to avoid laying off workers.

c) a company uses contingency workers to be able to add or subtract workers from its workforce as it needs to.

d) a company goes to job sharing in order to keep workers.

e) a firm provides job security for its core employees.

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

a) reducing the number of work hours or instituting job sharing.

b) implementing training.

c) instituting an across-the-board pay cut.

d) profit sharing.

e) an attrition strategy or hiring freeze.

59. If a manager offers a senior employee whose job has been eliminated a different job that will be taken from another employee who is less senior, this manager is using ____ to reduce his/her workforce.

a) attrition

b) a hiring freeze

c) bumping

d) job redesign

e) training

60. A company doesn’t want to lay workers off, but instead it is willing to implement a fairly radical and intrusive alternative. Frankly, it will probably still be fairly demoralizing, but people will keep their jobs. Their best alternative within their pay and benefits policy would be to ______.

a) offer a pay freeze

b) initiate a hiring freeze

c) start a profit-sharing program

d) implement a pay cut

e) start a new skills training program

61. 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 is your response?

a) That this is a good strategy and that retail staff will be encouraged to advance to higher positions to take responsibility as line manager in order to receive pay increases.

b) That it would be better to freeze pay for the line managers than retail workers because retail staff would sooner become demoralized by a pay freeze than line managers.

c) That the pay freeze should be the same across the board in order to avoid potential discrimination accusations.

d) That a layoff would be a much better solution.

e) That the company should institute a “ring of defense” approach instead.

62. A company that institutes profit sharing can save up to ___ of its payroll costs during downturns in the business cycle.

a) 50%

b) 35%

c) 20%

d) 15%

e) 5%

63. A long-term pay policy that may protect jobs and help companies to control labor costs by tying them more closely to production is called:

a) a pay freeze.

b) a pay cut.

c) profit sharing.

d) early retirement.

e) a hiring freeze.

64. Goodwill, Incorporated has recently proposed a plan to base 15% of employees’ salaries upon their meeting set goals and work requirements. Goodwill, Inc. is proposing what type of pay policy?

a) Profit sharing.

b) Variable pay.

c) Pay freezing.

d) Bumping.

e) Demotions.

65. ____ is the legislation that requires employers to inform employees of impending layoffs.

a) The Employment Security Act

b) Title VII of the 1991 Civil Rights Act

c) Executive Order 11426

d) The Worker Adjustment and Retraining Notification Act

e) None of the above

66. According to the law, 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 or 10% of the workforce.

d) Any employer that employs more than 3% of a community’s labor pool.

e) Any employer with more than 100 employees.

67. 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

e) c and d

68. When it comes to notification-of-layoff requirements, the United States:

a) has less stringent requirements than those of any European country.

b) is far more stringent than Sweden.

c) is less stringent than France.

d) is more stringent than France.

e) is similar to those in Great Britain.

69. Though WARN requires that employees be given 60 days notification prior to a mass separation, some arguments support giving no notification, including:

a) surviving employees’ job performance will not suffer to the extent that it would have in the case of a 60-day notice.

b) employees who are given no notification are not entitled to any compensation.

c) the likelihood of theft and sabotage decreases.

d) the decrease in productivity that often accompanies mass separations is unlikely to occur when no notification is given.

e) all of the above

70. Layoff criteria are important for the proper layoff implementation. One of the most important criteria is:

a) the employee’s age.

b) employee ethnic origins.

c) the gender of the employee.

d) the employee’s seniority with the company.

e) the salary level of the employee.

71. The use of seniority as a layoff criterion:

a) is not common among most companies.

b) tends to impact women and minorities more than other groups.

c) is the most difficult layoff criterion to implement.

d) is to guarantee a union fight, as unions prefer performance or quota criteria.

e) is the only safe legal option in today’s HRM legal environment.

72. The use of seniority as a layoff criterion:

a) is more difficult to document than other criteria.

b) is less commonly used as a layoff criterion than performance.

c) is most likely to rid the company of incompetent employees.

d) prevents managers from playing favorites with employees.

e) prevents businesses from losing top performers.

73. The use of seniority as a layoff criterion has some drawbacks, including:

a) adversely impacting white males.

b) the fact that it is often contested by unions.

c) the loss of top performers.

d) the difficulty in documenting it, compared to other criteria.

e) having to consider the entire employment period.

74. The use of performance as a layoff criterion:

a) is a common practice among large companies.

b) disproportionately affects women and minorities.

c) tends to eliminate older workers rather than younger workers.

d) is harder to defend than seniority because of uneven documentation of work performance by management.

e) is easier to implement than seniority.

75. Glenda has been an employee at your curtain manufacturing company for over 6 years. During the past three months, her performance has been a concern as her productivity has decreased by almost 15 percent. In addition, you need to reduce the workforce in order to trim employee costs. Your best option is to:

a) lay Glenda off on the basis of her performance.

b) lay Glenda off on the basis of her performance, but use seniority as the rationale when explaining to her the reason for her termination.

c) only use her performance as the reason for laying her off if there is long-term documentation of the decline in her productivity and performance.

d) encourage her to take early retirement.

e) offer Glenda incentives to quit.