El Niro Inc. is automating processes so the company can meet its demand with a smaller workforce. The CEO asks Megan, the vice president of human resources, for advice on how to address the resulting labor surplus. Megan studies the workforce and observes that many employees are in their 50s and 60s. Furthermore, these employees are the highest-paid workers in every job category. Based on this information, what should Megan suggest as the most effective way of addressing El Niro's labor surplus?
A) The workforce should be downsized, with layoffs focusing on the older employees.
B) Retrain the older employees in order to make them work more productively.
C) Provide performance-based pay to increase production output by the employees.
D) Replace the employees with contract workers.
E) Offer early retirement incentives to the employees in their 50s and 60s.

Question

Quizplus · Accepted Answer

Offering early retirement incentives to the older employees would allow for a reduction in the workforce while avoiding layoffs and the potential negative impact on employee morale. It would also provide an opportunity for the older employees to retire with dignity and a sense of security rather than facing uncertain job prospects. Retraining the older employees or offering performance-based pay may not be as effective at reducing labor surplus, and replacing the employees with contract workers may not be a sustainable solution.