Deck 6: Managing Employee Separations, Downsizing, and Outplacement

Question 1

The costs of employee separations primarily depend upon which of the following?

A) Whether the employee was a member of a protected class or not
B) Whether the employee had a voluntary separation
C) Whether the employee will be replaced or not
D) Whether the employee was a new hire

Answer 1

C

Question 2

Sanford Enterprises provides outplacement assistance through its HR department.The firm is most likely attempting to:

A) lower unemployment insurance taxes.
B) help departing employees find jobs.
C) improve employee motivation.
D) comply with EEOC rules.

Answer 2

B

Question 3

Carlie quit her job as a data analyst at APEX Designs,and she is scheduled to participate in an exit interview.Which of the following individuals would be the most appropriate to conduct Carlie's exit interview?

A) Subordinate
B) Co-worker
C) HR representative
D) Immediate supervisor

Answer 3

C

Question 4

Which of the following is a recruitment cost associated with employee replacement?

A) Outplacement
B) Reference checks
C) Orientation
D) Advertising

Question 5

Which of the following is a selection cost of employee replacement?

A) Advertising
B) Outplacement
C) Search firm fees
D) Reference checks

Question 6

The time and cost of exit interviews are part of the ________ costs of an employee separation.

A) recruitment
B) selection
C) training
D) separation

Question 7

What is the primary reason for holding exit interviews?

A) Providing counseling to departing employees
B) Assisting departing employees with job-search skills
C) Determining the reason for the employee's departure
D) Allowing the employee's co-workers to provide feedback

Question 8

Martin is reviewing HR's costs for interviewing,testing,and checking references for new hires.Martin is most likely reviewing the ________ costs of employee replacement.

A) training
B) selection
C) separation
D) recruitment

Question 9

Companies most likely attempt to manage their turnover rates because of:

A) potential problems associated with public relations.
B) legal requirements regarding layoff notifications.
C) inadequate affirmative action plans.
D) high employee replacement costs.

Question 10

Which of the following is most likely a benefit of employee separations for employers?

A) Employees are grouped into teams.
B) The workforce becomes more homogenous.
C) Surviving employees work more conscientiously.
D) They open doors for promotion within the company.

Question 11

A company wants to know the rate at which employees voluntarily leave the firm.The company most likely needs to:

A) measure its turnover rate.
B) conduct an HR audit.
C) implement a diversity audit.
D) track reasons for discharges.

Question 12

Which of the following factors is the LEAST common reason for turnover among Chinese workers?

A) Lack of development opportunities
B) Manager-employee relationships
C) Insufficient compensation
D) Tedious work

Question 13

Refer to Additional Case 6.1.To answer LaTisha's question about why people are leaving,the company should most likely institute:

A) outplacement services.
B) orientation sessions.
C) exit interviews.
D) appraisals.

Question 14

Yao-Huan is reviewing the rate at which employees have been leaving his firm.He is reviewing the firm's turnover rate.

Question 15

Which of the following is the most significant separation cost for employers?

A) Search firm fees
B) Lost productivity
C) Outplacement assistance
D) Compensation

Question 16

Which term refers to an employee's final interview following separation?

A) Exit interview
B) Follow-up interview
C) Appraisal interview
D) Outplacement interview

Question 17

An employee separation occurs when:

A) employee turnover reaches maximum capacity.
B) global competition increases beyond labor supply.
C) an employee ceases to be a member of an organization.
D) technologies are introduced into a new industry.

Question 18

Your company is planning a layoff.As you explain the process to the management team,you tell them that outplacement assistance is available,which means that the:

A) employee will receive a final interview.
B) company will help departing employees find new jobs.
C) company will measure the rate of employee separations.
D) company can terminate the relationship with the employee for any reason.

Question 19

Which of the following is a replacement cost associated with training new employees?

A) Employment testing
B) Outplacement services
C) Recruiter time
D) Lost productivity

Question 20

Which of the following is most likely true about employee separations?

A) Salary savings often outweigh other separation costs.
B) Innovation declines as people take their ideas with them.
C) The best workers tend to quit, so workforce quality declines over time.
D) Most separations are due to unfair employment practices by the employer.

Question 21

Hernando is working with management to calculate the costs of employee turnover.What issues or costs should Hernando raise to management?

Question 22

Selection costs include relocation costs,training costs,orientation,and severance pay.

Question 23

When conducting exit interviews,the interviewer should be one of the employee's former supervisors.

Question 24

Sara is 57 years old and she has been a division manager for Elf Cookies for 32 years.Recently,the business has seen an increase in efficiency and has a surplus of labor.Elf Cookies is offering employees who are 55 and older,and who have worked for the company for over 30 years,specific benefits and financial incentives to retire within the next 60 days.Sara does so.She has:

A) quit.
B) been bought out.
C) taken early retirement.
D) been discharged.

Question 25

The rate of employee separations in an organization is referred to as ________.

Question 26

The purpose of a(n)________ is to find out the reasons why the employee is leaving or to provide counseling and/or assistance in finding a new job.

Question 27

A firm with an extremely high turnover rate compared to other firms in the same industry most likely needs to address HR issues.

Question 28

What problems are frequently associated with early retirement programs? How can HR minimize such problems? What benefits might a firm experience from such employee separations?

Question 29

Studies show that approximately ________ of voluntary employee separations are avoidable.

A) 20%
B) 40%
C) 60%
D) 80%

Question 30

Voluntary separations may include:

A) early retirements.
B) hiring freezes.
C) discharges.
D) job redesigns.

Question 31

Resignations and retirements are examples of:

A) essential downsizing measures.
B) involuntary separations.
C) voluntary separations.
D) discharges.

Question 32

Refer to Additional Case 6.3.Which of the following questions is LEAST relevant to MedEquip at this time?

A) How will MedEquip's community reputation be affected?
B) How can MedEquip maintain the morale of surviving employees?
C) How do MedEquip's competitors handle employee security during layoffs?
D) What policies exist regarding separation pay for laid-off MedEquip employees?

Question 33

The costs to replace a departing employee primarily include: recruitment,selection,and long-term health care benefits.

Question 34

Web-based exit interviews are used by firms that assume former employees may prefer to avoid face-to-face interaction.

Question 35

Your CEO asks you,as the director of HR,to lead a layoff planning session.What layoff alternatives are available to the firm? If layoffs are necessary,what separation costs would the firm most likely incur?

Question 36

A program in which companies help their departing employees find jobs more rapidly by providing them with training in job-search skills is called ________.

Question 37

The termination of an employee's membership in an organization is referred to as ________.

Question 38

Similar to a quit,a ________ is initiated by the employee,but in this case the employee is unlikely to search for another job.

A) layoff
B) retirement
C) discharge
D) buyout

Question 39

Marissa quit her current employer for a new job.She is talking with the director of HR about why she left.Marissa is most likely receiving outplacement assistance.

Question 40

Employee separations can stimulate innovation and create opportunities for workplace diversity.

Question 41

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

Question 42

Bertha wishes to discharge one of her poorly performing employees.She has tried progressive discipline with no effect.She asks you,the HR manager,what she must do to discharge the employee.You should most likely tell her the policy and procedures,and then ask her if she has ________ in order to protect the company from a wrongful discharge suit.

A) documented the inappropriate behavior
B) given sixty days notice as required by law
C) used non-progressive disciplinary actions
D) analyzed the department's diversity levels

Question 43

If a business is downsizing,it is most likely:

A) offering training and development opportunities to new hires.
B) improving worker efficiency through reorganization.
C) reducing the size and scope of the business.
D) offering early retirements to older workers.

Question 44

All of the following are primary reasons for layoffs EXCEPT:

A) mergers
B) misconduct
C) global competition
D) technology advancements

Question 45

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.

Question 46

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.

Question 47

Rightsizing is synonymous with downsizing.

Question 48

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.

Question 49

Delmus' performance reports have been increasingly poor,and he seems to have negative relationships with other workers in his department.His line manager has taken him aside twice to discuss his behavior and work and has offered him time to improve,but there has been very little positive progress.Management decides to end the employment relationship with Delmus.This is an example of a:

A) layoff.
B) quit.
C) discharge.
D) buyout.

Question 50

Layoffs are most likely to occur because:

A) the firm offers lucrative incentives to reduce the workforce.
B) adequate documentation exists of the worker's poor performance.
C) a poor fit exists between the employee and the company.
D) the company's strategy forces a reduction in its workforce.

Question 51

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

Question 52

Dixon Enterprises needs to reduce its long-term workforce.The firm wants to reduce the scale and scope of its business to improve financial performance.The company is most likely:

A) conducting a layoff.
B) downsizing.
C) buying out the workforce.
D) rightsizing.

Question 53

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

Question 54

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

Question 55

The primary difference between a layoff and a discharge is:

A) a layoff is an involuntary separation and a discharge is a voluntary separation.
B) a layoff is a voluntary separation and a discharge is an involuntary separation.
C) a discharge occurs when the company's strategy forces it to reduce its workforce and a layoff occurs when there is a poor fit between the employee and the organization.
D) a layoff occurs when the company's strategy forces it to reduce its workforce and a discharge occurs when there is a poor fit between the employee and the organization.

Question 56

Alex is a first-line supervisor with an employee who has a performance problem.After coaching the employee with no improvement,Alex decides to terminate the employment relationship.Which term refers to this type of separation?

A) Layoff
B) Discharge
C) Rightsizing
D) Early retirement

Question 57

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

Question 58

The decision to terminate an employee is management's role.HR's primary role is to:

A) implement outplacement services immediately.
B) serve as the employee's advocate against management.
C) make certain the employee receives due process.
D) document poor performance so the termination can be justified.

Question 59

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

Question 60

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 ________.

Question 61

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.

Question 62

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.

Question 63

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

Question 64

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.

Question 65

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

Question 66

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.

Question 67

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

Question 68

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

Question 69

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.

Question 70

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

Question 71

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

Question 72

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.

Question 73

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.

Question 74

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

Question 75

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.

Question 76

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

Question 77

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.

Question 78

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.

Question 79

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

Question 80

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