Chapter 6 Managing Employee Separations, Downsizing, and Outplacement

76. When implementing a layoff, employees should first be informed:

a) by the HR department in a large meeting.

b) in writing through the mail.

c) by their supervisor in writing.

d) in a work unit meeting with HR present.

e) by their supervisor in face-to-face meetings.

77. The information given in the initial meeting between a manager and an employee who is being laid off should include:

a) the reasons why the employee is being laid off.

b) a brief period of time for the employee to vent frustrations and debate the layoff.

c) appreciation for what the employee has contributed to the business, if appropriate.

d) how much severance pay will be provided.

e) c and d

78. While no time is a good time for a termination, the best time seems to be:

a) midweek.

b) Friday afternoon, after 3 p.m.

c) the beginning of the workweek so employees have time to plan.

d) just after an employee comes back from vacation.

e) on the weekend, so there is plenty of time for employees to ask questions.

79. 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 lay-off. Which of the following should be your greatest priority in preparing for the layoff?

a) Maintaining privacy and delaying notification of the layoff to employees until the latest possible moment.

b) Limiting contact with the media.

c) Coordinating communication and press releases to the media.

d) Organizing outplacement services.

e) None of the above

80. When implementing a layoff, managers sometimes forget that:

a) they may need to rehire these laid-off employees.

b) it is usually appropriate to escort laid-off employees off the premises.

c) they need to develop plans for the “survivors” of the layoff.

d) there are hidden labor costs not reduced through layoffs.

e) they need to plan for outplacement of the laid-off employees.

81. After a layoff, it is not uncommon to see ___ among the remaining workers.

a) a sharp increase in innovation

b) greater diversity

c) gratitude

d) increased absenteeism

e) little change in quality or productivity

82. Management can minimize problems with the remaining workforce after a layoff by:

a) developing special programs for survivors providing emotional support.

b) minimizing the “rumor mill” by keeping communication to a minimum.

c) initiating close supervision of the remaining workers, watching for any problems that may arise.

d) getting the remaining workers involved in the transition process by getting their ideas.

e) documenting the reasons for release and aggressively preparing for litigation.

83. Companies provide outplacement to terminated workers for a number of reasons, such as:

a) reducing problems with the remaining workforce.

b) meeting federal requirements to do so if the company releases more than 100 workers.

c) reducing their unemployment compensation tax by reducing the time people are out of a job.

d) reducing absenteeism among remaining workers.

e) reducing morale problems for laid-off workers and helping them find another job.

84. The use of outplacement services among large corporations:

a) is in significant decline due to the expense.

b) has become a global management practice used by corporations around the world.

c) has caused several to take the process “in-house” and use their own HRM staff.

d) is entirely a U.S. management practice.

e) is not known among Japanese corporations.

85. Horrace has been asked to design a job-search assistance program as part of a company’s outplacement services. Which of the following might he include in the program?

a) Resume writing.

b) Career planning.

a) Job negotiation skills.

b) Interviewing skills.

c) All of the above

CASE QUESTIONS

Case 6.1

Your company, Painting Products, Inc., is reviewing employee turnover. The CEO and VP of Operations are arguing. The CEO doesn’t see what the big deal is: the company can capture savings from reduced salary/wages and benefits this quarter. Unemployment insurance is not impacted because people are quitting. The job market is tight so the company gets more walk-in applicants and mailed-in resumes than it needs.

The VP of Operations argues that he can’t keep absorbing the productivity losses due to employees’ need for orientation and learning time on the job. He admits that new hires are bringing fresh ideas and his better-performing people do tend to stay and move up as a consequence of this turnover, but he’s still frustrated with the loss of productivity.

86. Refer to Case 6.1. What category of employee replacement costs is the CEO not considering?

a) Recruitment costs.

b) Training costs.

c) Separation costs.

d) Damage to the corporate image.

e) Selection costs.

87. Refer to Case 6.1. The VP of Operations is concerned about what category of employee separation costs?

a) Recruitment costs.

b) Training costs.

c) Separation costs.

d) Damage to the corporate image.

e) Selection costs.

88. Refer to Case 6.1. What benefit is the VP of Operations getting from the turnover problem?

a) Reduced labor costs.

b) Lower training costs.

c) Increased innovation.

d) Greater EEO-related diversity.

e) Higher productivity.

Case 6.2

Your firm is suffering an economic downturn, and it appears you need to reduce your workforce. The managers are debating the costs and benefits of various employee separations. Some managers argue that the company needs to do it now and shorten the pain. They need to cut 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; they just need to do more with fewer people.

Other managers want to take a long-term, less traumatic approach. They believe the company has time to think through the problems and reduce the workforce gradually, rather than with sudden cuts. They point out that 35% of the workforce is over age 62.

The VP of HR, LaTisha, wants the least disruptive reduction process possible. She’s just finished a major labor negotiation and fight with the union and is not ready for another. She points out that turnover has been fairly high. Along with looking at workforce reductions, she wants to know why people are leaving the company voluntarily.

89. Refer to Case 6.2. The managers who want to make the reduction now seem to be arguing for:

a) a layoff.

b) downsizing.

c) rightsizing.

d) discharges.

e) early retirements.

90. Refer to Case 6.2. What relatively quick, but less traumatic, reduction strategy is suggested by the make-up of the workforce?

a) Rightsizing.

b) Retraining.

c) Discharging low performers.

d) An early retirement program.

e) Job redesigns.

91. Refer to Case 6.2. LaTisha’s observations open the door for what other reduction strategies?

a) The use of employment policies like attrition and a hiring freeze.

b) Instituting changes in pay and benefit policies.

c) Job redesign.

d) Additional training or cross-training.

e) None of the above

92. Refer to Case 6.2. To answer LaTisha’s question about why people are leaving, the company needs to institute:

a) outplacement services for separated workers.

b) new training.

c) a calculation of the real costs of employee separations.

d) exit interviews.

e) a layoff.

Case 6.3

Terra Alta, Inc., an employer of some 15,000 employees worldwide, wants to reduce its workforce through an early retirement program. They have hired you to put the program together and implement it.

This will be a one-time offer. They want employees over age 58 to be eligible, but they don’t want to lose key older employees. Terra Alta wants a fairly accurate estimate of how many employees will take part in the program.

Terra Alta wants a legal and humane program. They do not want to be caught up in any litigation. They want employees to have an accurate picture of their future if they take part in the early retirement program.

93. Refer to Case 6.3. Given Terra Alta’s desire to get employees to take advantage of the program, what could you recommend they do, beyond the standard, to ensure maximum participation?

a) Create a formula that accelerates eligibility for retirement.

b) Open a “window” that restricts eligibility.

c) Give potential layoff notices to those who might hesitate to participate but are eligible.

d) Offer a lump sum payment equal to 1-2 years of salary.

e) Provide outplacement counseling.

94. Refer to Case 6.3. How could Terra Alta keep key older workers from leaving?

a) Restrict eligibility to areas with redundant employees.

b) Don’t give them potential layoff notices.

c) Pull them aside and guarantee them their jobs.

d) Fine tune the eligibility requirements by lowering the amount of seniority required to participate.

e) Put a hiring freeze into place.

95. Refer to Case 6.3. To avoid any legal problems, what would you recommend?

a) Tell managers not to treat older workers any differently than they have in the past.

b) Offer minority and women employees larger severance packages.

c) Give at least 60 days advance warning by placing potential layoff notices in their pay voucher packets.

d) Explain to these workers what it’s like out there if they retire or try to go into business for themselves.

e) Implement a hiring freeze at the same time as you offer the early retirement program.

96. Refer to Case 6.3. How could Terra Alta manage the number of people who might participate in the early retirement program?

a) Take key employees aside and guarantee them their jobs.

b) Fine tune the incentives if a survey shows too many will participate.

c) Hire retirees back as consultants.

d) Offer protected class employees less generous retirement packages.

e) Build an estimate on industry data and stop the program when they get to that number.