Question 1

Cuts in overtime pay,profit sharing,and encouraging employees to take leave days are all ways to reduce employee costs in what area?

Accepted Answer

Cuts in overtime pay and profit sharing directly impact an employee’s pay and benefits, while encouraging employees to take leave days reduces the costs associated with employee benefits such as paid time off. Therefore, these measures all fall under the category of pay and benefits.

Question 2

A company that institutes profit sharing can save approximately ________ of its payroll costs during downturns in the business cycle.

Accepted Answer

Profit sharing can save a company about 20% of its payroll costs during downturns in the business cycle by adjusting the profit-sharing payouts according to the company's financial performance.

Question 3

Which term refers to reconfiguring one job into two part-time jobs?

Accepted Answer

Job sharing refers to reconfiguring one job into two part-time jobs where two employees share responsibilities and hours.

Question 4

Which of the following is an employment policy that serves as an alternative to layoffs?

Accepted Answer

The answer of Which of the following is an employment...

Question 5

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

Accepted Answer

Cutting part-time employees will directly reduce the size of the workforce. Reducing work hours or offering profit sharing may help retain employees, but it will not directly reduce the size of the workforce. Implementing training may improve employee productivity but will not necessarily lead to a reduction in the workforce.

Question 6

Farley Enterprises wants to reduce its labor costs in the LEAST disruptive method that is available.Which of the following is most appropriate?

Accepted Answer

Attrition, which involves not filling open positions and waiting for natural employee turnover to reduce labor costs, is the least disruptive method available because employees can plan for their departure, and the company avoids the negative effects of layoffs, such as decreased morale and potential legal action.

Question 7

Which of the following is a long-term pay policy that can protect jobs and control labor costs by linking compensation to production?

Accepted Answer

Profit sharing is a long-term pay policy that can incentivize employees to work harder and more efficiently, as their compensation is tied to the company's production levels. This can ultimately protect jobs by ensuring the company's success and controlling labor costs by only paying out profit sharing bonuses when the company is profitable. Internships, overtime pay, and early retirement are not necessarily long-term pay policies and do not directly link compensation to production.

Question 8

A layoff is typically implemented by an organization when:

Accepted Answer

Layoffs are usually implemented as a last resort when the organization has exhausted all other possible options to reduce labor costs, such as cutting benefits, reducing work hours, freezing salaries, or implementing a hiring freeze. Layoffs are typically not related to the length of service or the size of the workforce, but rather to the financial condition of the organization. Outplacement services may be offered as part of a layoff to assist affected employees in finding new employment, but their success does not determine the necessity of the layoff.

Question 9

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?

Accepted Answer

Variable pay is a pay policy that ties a portion of an employee's compensation to some measure of the employee's performance. Goodwin, Inc.'s proposal to base 15% of employees' salaries on their accomplishment of specific performance goals fits within the definition of variable pay. Profit sharing, choice A, is a pay policy that distributes a portion of profits to employees as a form of incentive pay. Choice C, pay freezing, is not a pay policy but a cost-cutting measure in which employees' pay is not increased during a certain period. Choice D, bumping, is a union negotiation technique in which a senior employee takes the job of a less senior employee, who in turn takes the job of another less senior employee, and so on.

Question 10

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?

Accepted Answer

Establishing a 30-day open window for early retirement would limit the program eligibility to a short period of time as desired by Terra Alta. It also allows employees to have a clear picture of their future if they decide to accept early retirement. This policy also avoids the legal and humane issues that the company wishes to avoid. Creating a formula that accelerates retirement eligibility for low performing workers and mandating a leave of absence for all employees near retirement are not appropriate policies in this situation. Implementing outplacement service programs for retiring employees could be a good idea, but it is not mentioned as a priority for Terra Alta in the given scenario.

Question 11

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

Accepted Answer

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

Question 12

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

Accepted Answer

By instituting a profit-sharing compensation program, a company can incentivize its employees to work harder and more efficiently toward increasing profits. This can result in savings of up to 20% of payroll during lows in the business cycle.

Question 13

A "rings of defense" strategy in terms of employment security and workforce reductions is when a firm:

Accepted Answer

A "rings of defense" approach focuses on protecting core employees from workforce reductions. Providing job security for these employees is one way to do so. Freezing wages, using contingency workers, and job sharing may help reduce costs, but they do not necessarily provide job security for core employees.

Question 14

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:

Accepted Answer

The company has decided not to replace the lost employees, which means that they are not actively choosing to eliminate their positions through layoffs. Instead, they are reducing their workforce through natural means, such as retirements and voluntary quits, which is known as attrition.

Question 15

The least disruptive way to cut labor costs is through:

Accepted Answer

Attrition is the least disruptive way to cut labor costs because it involves not filling positions that become vacant due to retirements, resignations, or other reasons. This approach allows a company to avoid layoffs and the associated negative impacts on employee morale and productivity. Additionally, it can create opportunities for restructuring and redesigning work processes to increase efficiency and reduce costs further.

Question 16

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?

Accepted Answer

It would be unfair and demotivating to freeze pay for some employees but not others. The pay freeze should be equal across the board to maintain consistency and avoid potential conflicts or negative feelings among staff members.

Question 17

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:

Accepted Answer

The practice of moving a more senior employee to a job in a different unit and displacing an employee with less seniority is called bumping. This implies that the employer is following a practice of seniority-based promotional opportunities, where the senior employees have more rights to job security and job opportunities compared to the less senior employees. Other options like attrition, job redesign, and rightsizing do not necessarily involve the practice of seniority-based employee movements.

Question 18

Once a firm has decided to reduce its workforce through voluntary means,its next choice is:

Accepted Answer

Once a firm has decided to reduce its workforce through voluntary means, the next appropriate choice is to consider what outplacement services to offer. Outplacement services can assist the employees that are leaving with career transition services, job search assistance, resume building, interview skills training, and more. Providing such services can help ensure a smooth transition for the affected employees and maintain the firm's reputation as a caring organization.

Question 19

Which of the following alternatives to layoffs is LEAST intrusive on the day-to-day management of a business?

Accepted Answer

The answer of Which of the following alternatives to layoffs...

Question 20

Transferring and relocating employees are both ways to reduce employee costs through which function?

Accepted Answer

Transferring and relocating employees are part of job design methods, which involve restructuring roles and responsibilities to optimize efficiency and reduce costs.

Quiz 6: Managing Employee Separations, Downsizing, and Outplacement