Q&A Hero

Q: 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.

Q: In a termination meeting, a manager should interject personal remarks and discuss future opportunities for the employee to soften the blow of job loss.

Q: 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.

Q: One of the most commonly used layoff criterion is job seniority.

Q: WARN requires employers with 200 or more employees to give 100 days' warning of layoffs of more than 10% of its employees.

Q: Changes in job design may include: job sharing, rings of defense, bumping, and job relocation.

Q: Generally, the first alternative to layoffs that companies use to reduce their labor costs is to redesign existing jobs.

Q: A firm's overall HR strategy influences its employee workforce reduction strategy.

Q: 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's actions regarding Zena are most likely an example of: A) discrimination. B) forced retirement. C) progressive discipline. D) a ring of defense.

Q: 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 e-mails that summarize the current situation at MedEquip. 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.

Q: 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 e-mails that summarize the current situation at MedEquip. 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.

Q: 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. 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

Q: 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

Q: 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

Q: 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.

Q: Which of the following is most common among survivors of a layoff? A) Increased diversity B) Improved morale C) Increased absenteeism D) Improved productivity

Q: 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

Q: 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.

Q: 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.

Q: 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.

Q: 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.

Q: 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.

Q: 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.

Q: 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.

Q: 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

Q: 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.

Q: 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

Q: 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

Q: Which of the following requires employers to inform employees of impending layoffs? A) ERISA B) Title VII C) EO 11426 D) WARN Act

Q: 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

Q: 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

Q: 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%

Q: 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.

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

Q: 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.

Q: 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

Q: 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

Q: 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

Q: 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

Q: 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.

Q: 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.

Q: 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

Q: 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.

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

Q: 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.

Q: 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.

Q: 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

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

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

Q: 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.

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

Q: 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.

Q: 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.

Q: 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.

Q: 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

Q: 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

Q: 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.

Q: 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

Q: 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.

Q: 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

Q: 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.

Q: 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.

Q: 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

Q: 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.

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

Q: 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.

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

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

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

Q: 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 ________.

Q: ________ is a separation that occurs when an employee decides, for personal or professional reasons, to end the relationship with the employer.

Q: Rightsizing is synonymous with downsizing.

Q: Involuntary separation results from one of two conditions: 1) economic necessity or 2) a poor fit between the employee and the organization.

Q: Employers can force an employee to retire if the employee is 65 years of age or older.

Q: A quit and a retirement are similar types of employee separations since both are initiated by the employee.

Q: Recent studies have shown that 80% of voluntary separations are unavoidable.

Q: 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. 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

Q: 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. Brian would most likely advocate a strategy of: A) attrition. B) downsizing. C) rightsizing. D) early retirements.

Q: 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.

Q: 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.