45) Frank is the CEO of Telex Inc., a company that has a team-oriented culture in which people
perform as groups and complete short-term projects to earn revenue. After studying his
company’s structure, Frank feels Telex’s current processes are inefficient. As a result, Frank
decides to downsize the organization and then use the profits to enhance the organization’s
efficiency. What is a disadvantage of this approach?
A) Downsizing yields slow but long-term profits.
B) Downsizing is the simplest way to ensure current and future competitiveness.
C) Downsizing will interfere with the effectiveness of the organization’s teamwork.
D) Downsizing often results in acquisition of companies by other organizations.
E) Downsizing requires moving to relatively expensive locations.
46) Identify the correct statement regarding downsizing.
A) Downsizing improves long-term organizational effectiveness.
B) The negative effect of downsizing is especially low among firms that engage in high-
involvement work practices.
C) Downsizing often disrupts the social networks through which people are creative and flexible.
D) The negative impact of downsizing is especially low for those organizations that emphasize
research and development.
E) Downsizing campaigns eliminate only people who are replaceable.
47) What is a step a downsized company can take to counter negative employee emotions?
A) Demonstrate that the employees that were downsized deserved it.
B) Build confidence in the company’s plans for a stronger future.
C) Show the organization’s commitment to its management.
D) Encourage employees to work harder, increasing their value and thus keeping them with the
company longer.
E) Pursue a commitment to the customers over a commitment to the community.
48) A manufacturing company, hit by a slump in demand, is experiencing a labor surplus. The
company expects the market to improve in six months, and it does not want to lay off any of its
employees. Which strategy is an equitable way to handle this issue and spread the burden more
fairly?
A) demotions
B) outsourcing
C) reduced work hours
D) overtime
E) employing temporary workers
49) Allie, a human resource manager at an electronics firm, observes that many employees who
are reaching the traditional retirement age are not interested in leaving the organization. Which
statement best explains the reason for this trend among older employees?
A) There are laws against gender discrimination.
B) There is a rise in the availability of pensions.
C) Jobs are becoming less physically demanding.
D) Phased-retirement programs require employees to work longer hours.
E) Older workers generally don’t have much debt.
50) 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.
51) Which of the following best describes a phased-retirement program?
A) It refers to laying off older employees in small batches.
B) It refers to giving lucrative incentives to a large number of older employees to voluntarily
retire.
C) It refers to reducing both the number of hours older employees work as well as the cost of
these employees.
D) It refers to giving older employees a certain time limit to voluntarily retire.
E) It refers to offering alternative work locations and work responsibilities to older employees.
52) What are the most widespread methods for eliminating labor shortages?
A) downsizing and merging with other organizations
B) hiring temporary workers and outsourcing work
C) retrained transfers and turnover reduction
D) overtime and new external hires
E) overtime and retrained transfers
53) Identify a disadvantage of using temporary and contract workers.
A) Revocability of this method is more difficult than other methods of avoiding labor shortage.
B) These kinds of workers cannot be hired through an agency.
C) These methods are a relatively slow solution to labor shortage.
D) These workers tend to be less committed to an organization.
E) These workers work well in key jobs, but not in those jobs that supplement permanent
employees.
54) Why is temporary employment popular with employers?
A) It gives employers flexibility in operations.
B) It allows employers to comply with the requirements of affirmative action imposed by the
government.
C) The quality of work from temporary workers is usually far superior.
D) It is the most effective strategy for key customer service jobs.
E) Temporary workers are more committed to the organization.
55) Which statement best describes outsourcing?
A) It refers to contracting with another organization to perform a broad set of services.
B) It refers to finding cheap resources in another country to gain a competitive advantage.
C) It refers to using a temporary or contract employee to fill a single job vacancy.
D) It refers to buying the necessary raw materials needed to conduct business from external
suppliers.
E) It refers to moving operations away from the home location to decrease cost savings.
56) Trinkets Inc., a manufacturer of widgets, has entered into a contract with a third party to
perform services related to processing orders, managing inventory levels, and shipping products
to customers. The company is engaged in
A) offshoring.
B) consolidating.
C) licensing.
D) acquiring.
E) outsourcing.
57) Organizations use outsourcing as a way to
A) reduce a labor surplus.
B) operate more efficiently and save money.
C) replace labor with technology.
D) ease the transition from temporary worker to employee.
E) hold onto good employees during a labor surplus until they can be hired back.
58) Tex Tools applies its in-depth understanding of the challenges facing manufacturers to
design and build custom machine tools that are highly valued by business customers. To
maintain its competitive advantage, Tex Tools also wants to avoid spending more than is
necessary on administrative activities such as managing employee benefits. What would be the
most effective way for Tex Tools to minimize administrative expenses without sacrificing
quality?
A) hiring new employees with administrative skills
B) downsizing the workforce so fewer administrators are needed
C) moving to a location where raw materials are abundant
D) outsourcing administrative work to an organization that specializes in these services
E) hiring temporary workers to fill permanent job positions
59) What is a challenge associated with an outsourcing strategy?
A) labor shortage
B) increased cost
C) quality-control problems
D) lack of necessary technology
E) diseconomies of scale
60) A small company that manufactures special-order wood furniture has kept its employees
busy on a 40-hours-a-week schedule for the past two years. The company just received a large
contract from a Chinese company that is opening offices in the area. The Chinese company has
given a month’s time for completion of its order. To complete the contract in the required one
month, the furniture company needs additional skilled labor on short notice. Which strategy
might the company use if it wants to avoid this short-term labor shortage while finding a simple
and cost-effective solution?
A) retrained transfers
B) overtime
C) technological innovation
D) new external hires
E) turnover reductions
61) Tom, a supervisor at AutoMax Inc., realizes that a couple of months from now, he might
experience a labor shortage for approximately two weeks due to increased demand for the
company’s products. Which option would be best for dealing with this labor shortage?
A) Tom should hire new employees because it is a simple process.
B) Tom should depend on technological innovation because it helps replace human labor with
machines.
C) Tom should use outsourcing because it reduces internal costs.
D) Tom should encourage employees to stay with the company.
E) Tom should encourage employee overtime because it helps to increase productivity for a short
period of time.
62) What is an element in the final stage of human resources planning?
A) estimating labor demand
B) forecasting labor supply
C) estimating labor surplus or shortage
D) strategic planning
E) evaluating outcomes
63) In the context of HR planning, implementation that ties planning and recruiting to an
organization’s strategy and to its efforts to develop employees becomes a complete program of
A) reengineering.
B) total quality management.
C) benchmarking.
D) talent management.
E) workforce utilization.
64) Vino, an HR manager at Jacoby Beverages, identifies and attracts potential job seekers to his
organization. In the context of HRM functions, Vino is carrying out the ________ process.
A) promoting
B) appraising
C) recruiting
D) forecasting
E) disbanding
65) In the context of managing human resources, the process of ________ creates a buffer
between planning and the actual selection of new employees.
A) recruiting
B) evaluating
C) inducting
D) outsourcing
E) training
66) ________ influence the kinds of job applicants an organization reaches.
A) Personnel policies
B) Recruitment sources
C) Characteristics of the recruiter
D) Financial sources
E) Industry competitors
67) Which aspect of recruitment is most likely to affect the nature of the positions that are
vacant?
A) recruitment sources
B) personnel policies
C) recruiter traits
D) recruiter behavior
E) applicant characteristics
68) What is true of companies that use a “lead-the-market” pay strategy?
A) They pay more than the current market wages for a job.
B) They have a recruiting disadvantage.
C) They recruit fewer employees than needed and depend on overtime.
D) They provide relatively better working conditions to employees compared to competitors.
E) They usually have low pay, coupled with overtime and flex-time.
69) ________ states that if there is no specific employment contract saying otherwise, the
employer or employee may end an employment relationship at any time, regardless of cause.
A) Due-process policy
B) Employment flexibility
C) Rule of fair treatment
D) Rule of law
E) Employment at will
70) Berns Inc. hires Allen as a supervisor in the company. They have an implied understanding
that both the employer and the employee have the right to end their relationship at any time they
desire. In the context of personnel policies, the relationship between the company and Allen is
based on the
A) promote-from-within policy.
B) lead-the-market strategy.
C) employment-at-will policy.
D) nepotistic agreement.
E) benevolent agreement.
71) ________ formally lay out the steps an employee may take to appeal an employer’s decision
to terminate that employee.
A) Leading indicators
B) Trend analyses
C) Transitional matrices
D) Due-process policies
E) Employment-at-will contracts
72) Excel Software is having difficulty filling all its positions for systems analysts. The
company’s human resource manager suggests introducing a kind of personnel policy known as a
due-process policy. How is that most likely to help with recruitment?
A) This policy implies greater job security and concern for employees.
B) Due-process implies that employees won’t be bound to a contract.
C) Implementing a due-process policy suggests that the organization is innovative and fun.
D) Applicants know a due-process policy always leads to a lead-the-market pay strategy.
E) The due-process policy supports a “promote from within” practice, which will encourage
current employees to apply.
73) In order to cultivate a favorable picture of the organization, Shubert Group, a financial
services corporation, advertises itself to potential applicants by using the slogan, “Investing in
you no matter what road you take.” This scenario is an example of ________ advertising.
A) viral
B) image
C) proactive
D) saturation
E) signature
74) Cory, a physicist at HealthAir, recently received an award for several patents he earned that
enabled the company to help slow climate change by reducing carbon emissions. Jamie,
HealthAir’s vice president of human resources, is eager to get news coverage of the Cory’s
award. She knows that, in addition to drawing positive attention to the company, the publicity
will support recruitment. Which statement best supports Jamie’s thinking?
A) Publicity about HealthAir will create more opportunities for advancement within the
company.
B) A lead-the-market pay strategy requires that people be familiar with the company’s track
record.
C) Creating the impression of HealthAir as a place where talented people make a difference can
attract talented job candidates.
D) People who learn about Cory’s award will be less likely to expect that HealthAir has an
employment-at-will policy.
E) This kind of image advertising will give more people the impression that HealthAir is a fun
place to work.
75) Which of the following is an internal source of recruitment?
A) employee referrals
B) direct applicants
C) employment agencies
D) job postings
E) personal interviews
76) The process of communicating information about a job vacancy on company bulletin boards,
in employee publications, on corporate intranets, and anywhere else an organization
communicates with employees is referred to as
A) job posting.
B) external hiring.
C) employment referral.
D) a workforce utilization review.
E) direct sourcing.