CH-10 Human Resource Management and Labor Relations – Business Essentials US Edition : Exam Guide

Chapter 10 Human Resource Management and Labor Relations 1. Job analysis is the systematic analysis of jobs within an organization resulting in a job description. Answer: True Explanation: Job analysis results in job description and job specification. 2. Performance appraisals are designed to show workers how well they are doing their jobs. Answer: True Explanation: Performance appraisals are designed to show workers precisely how well they are doing their jobs. Typically, the appraisal process involves a written assessment issued on a regular basis. 3. In setting wage and salary levels, a firm may start by looking at competitors' levels. Answer: True Explanation: Competitor levels are not the only benchmark. Within a firm it is possible that a person with more experience is paid more than a person with less experience doing the same job. 4. Labor relations refers to the process of dealing with employees who are not represented by a union. Answer: False Explanation: Labor relations refers to dealing with unions. 5. A solution to a long-term contract based solely on COLA is called a wage reopener clause that does not allow wage rates to be renegotiated. Answer: False Explanation: Wage reopener clauses allow wage rates to be renegotiated at preset times during the life of the contract. 6. Human resource managers need to forecast the internal and external supply of employees. Answer: True Explanation: Forecasting labor involves two tasks: forecasting the internal and external supply of labor. 7. When forecasting the internal supply of labor, planners must rely on information from sources such as government reports and figures supplied by colleges on the number of students in major fields. Answer: False Explanation: These are sources used when forecasting the external supply of labor. 8. Companies often use internal recruitment to build morale and keep high-quality employees from leaving. Answer: True Explanation: Internal recruiting means considering present employees as candidates for openings; promotion from within can help build morale and keep high-quality employees from leaving. 9. When selecting someone to hire, the first step in selection is usually asking the candidate to take a test. Answer: False Explanation: The first step is to fill out an application. 10. Wages refer to compensation usually expressed as an amount paid per year. Answer: False Explanation: Wages are paid for time worked, such as per hour. A salary refers to compensation usually expressed as an amount paid per year. 11. The number of variable pay programs in the United States has been consistently falling for the last decade, and it is predicted that they will continue to decline in popularity. Answer: False Explanation: The number of variable pay programs in the United States has been growing consistently for the last decade, and most experts predict that they will continue to grow in popularity. 12. Many firms say that merit raises are a better motivator than variable pay. Answer: False Explanation: Because the range between generous and mediocre merit raises is usually quite small, variable pay is a better motivator. 13. In a company-sponsored pension plan, employees are not allowed or required to make contributions. Answer: False Explanation: In some cases, the company contributes all the money to the pension fund; in other cases, contributions are made by both the company and employees. 14. In recent years, some companies have run into problems because they have not set aside enough money to cover the retirement funds they have agreed to provide. Answer: True Explanation: Pension plans include plans in which the company only contributes and plans in which both the company and the employees contribute. 15. The enforcement of equal opportunity legislation is handled by two agencies, the EEOC and OFCCP. Answer: True Explanation: The Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs both handle the enforcement of equal opportunity legislation. 16. The OFCCP is responsible for enforcing executive orders that apply to companies doing business with health departments. Answer: False Explanation: The OFCCP is responsible for enforcing executive orders that apply to companies doing business with the federal government. 17. Employers may require an AIDS test as a condition of an offer of employment. Answer: False Explanation: Organizations must treat AIDS like any other disease covered by law; no employer can legally require an AIDS or any other medical exam as a condition for making an offer of employment. 18. The Occupational Safety and Health Act of 1970 is the single most comprehensive piece of legislation regarding workplace safety and health. Answer: True Explanation: Further, OSHA holds that every employer has an obligation to furnish each employee with a place of employment that is free from hazards. 19. Employers can legally require a medical examination as a condition for making an offer of employment. Answer: False Explanation: Further, employers must maintain the confidentiality of all medical records. 20. In spite of employment at will, employees may not be fired for filing workers' compensation claims. Answer: True Explanation: Recently, the courts have ruled that employees who file workers' compensation claims are protected by law. 21. The increased demand for knowledge workers will require firms to use extra measures, such as higher salaries and signing bonuses, to attract qualified employees. Answer: True Explanation: Attracting and retaining knowledge workers is especially critical in areas in which demand is still growing, since even entry-level salaries for these employees are continuing to escalate; once the employee is hired, the employer must continue to invest in training and so on for knowledge workers. 22. Although millions of American workers still belong to unions, union membership as a percentage of the total workforce has steadily declined. Answer: True Explanation: In 2007, only 12.1 percent of U.S. workers belonged to a labor union, down from 20.1 percent in 1983, when the U.S. Department of Labor first began compiling data. 23. Wage reopener clauses are required by federal and state law. Answer: False Explanation: Wage reopener clauses are now included in only 10 percent of all labor contracts. 24. What is another name given to human resource managers? A) financial managers B) personnel managers C) production managers D) accounting managers E) business development managers Answer: B Explanation: B) Human resource or personnel managers have a substantial impact on a firm's performance as a business. 25. Which of the following outlines the duties of a job, its working conditions, and the tools, materials, and equipment used to perform it? A) job advertisement B) job specification C) job description D) job analysis E) job report Answer: C Explanation: C) The job description is part of the job analysis process. 26. Which of the following describes the skills, abilities, and qualifications required for a job? A) staffing survey B) advertising budget C) job specification D) employee analysis E) replacement chart Answer: C Explanation: C) A job specification lists the attributes an employee needs in order to perform the job effectively. 27. Which of the following contains information on each employee's education, skills, work experiences, and career aspirations? A) managerial grid B) employee information system C) job analysis D) job specification E) labor forecast Answer: B Explanation: B) This system can quickly locate every employee who is qualified to fill a position. 28. Jean's paycheck is calculated from the number of hours worked during the week times her hourly rate. What type of system is used to pay Jean? A) gainsharing B) salary C) profit sharing D) wage E) incentive Answer: D Explanation: D) A wage is the dollar amounts paid to employees for their labor. 29. Which of the following links salary increases to performance levels in non-sales jobs? A) bonuses B) collective bargaining C) merit salary systems D) cafeteria benefit plans E) workers' compensation insurance Answer: C Explanation: C) An example is the rewarding of executives with stock options. 30. Which plan refers to compensation other than wages and salaries and other incentives offered by a firm to its workers? A) profit-sharing B) gainsharing C) benefits D) pay-for-knowledge E) variable Answer: C Explanation: C) Benefits account for an increasing percentage of most compensation budgets. 31. What is the name given to an employee who is hired on something other than a permanent or full-time basis? A) knowledge expert B) contingent worker C) technical employee D) supervisory manager E) managing director Answer: B Explanation: B) Contingent workers include independent contractors, on-call workers, and leased employees. 32. What is the name given to a group of individuals, working together to achieve shared job-related goals such as higher pay, shorter working hours, greater benefits, or better working conditions? A) management organization B) company hierarchy C) labor union D) external organization E) permanent employees Answer: C Explanation: C) The percentage of American workers belonging to a labor union has been declining over the last 15 years. 33. What is the process of dealing with employees who are represented by a union? A) labor relations B) human resource management C) negotiation D) arbitration E) contingency recruitment Answer: A Explanation: A) A company executive needs special skills in dealing and negotiating with labor unions. 34. What is the process by which union leaders and managers negotiate common terms and conditions of employment for the workers represented by unions? A) striking B) picketing C) informational gathering D) collective bargaining E) compensation planning Answer: D Explanation: D) It is the process in which a labor contract can be drafted for union-represented workers. 35. Which of the following occurs when union members agree not to buy the products of a targeted employer? A) lockout B) boycott C) mediation D) arbitration E) slowdown Answer: B Explanation: B) Workers may also urge consumers to boycott the firm's products. 36. What term describes the situation when workers perform jobs at a less efficient pace? A) lockout B) boycott C) slowdown D) walkout E) strike Answer: C Explanation: C) A variation on the slowdown is a sickout, when large numbers of workers call in sick. 37. If negotiations fail, what can a company choose to use to prevent union employees from coming to work? A) wildcat strike B) lockout C) strikebreaker D) economic strike E) bailout Answer: B Explanation: B) Lockouts are illegal if they are used as offensive weapons to give management a bargaining advantage. 38. What occurs when a neutral third party dictates a settlement between two sides that have agreed to submit to outside judgment? A) mediation B) arbitration C) strikebreaker D) impasse E) picketing Answer: B Explanation: B) In arbitration, the neutral third party (the arbitrator) dictates a settlement between the two sides, which have agreed to submit to outside judgment. 39. Which of the following is considered the starting point of effective human resource management? A) external staffing B) recruitment C) planning D) financing E) compensation Answer: C Explanation: C) The starting point for effective human resource management is human resource planning, which involves job analysis and forecasting the demand for and supply of labor. 40. What is the purpose of a skills inventory? A) to plan and identify people for transfer or promotion B) to list key managerial positions C) to describe the specifications for a job D) to assess trends in previous human resource usage E) to hire people from outside the organization Answer: A Explanation: A) Some organizations also use employee information systems. 41. Plants Galore is a business selling a range of indoor plants. In the past there has been a problem with plants being stolen by staff. Which of the following represents the biggest limitation in reference checks as a reliable way of assessing the value of prospective employees? A) Reference checks are illegal in a number of states. B) Reference checks obtained from previous employers are out of date. C) Some previous employers may no longer be in business. D) Some reference checks can be time consuming. E) Reference checks tend to only tap positive recommendations. Answer: E Explanation: E) Reference checks have been shown to have limited value because individuals tend to provide the names of people who will give them positive recommendations. 42. Which of the following types of training occurs while the employee is at his or her place of work? A) on-the-job training B) vestibule training C) off-site training D) incentive training E) remote training Answer: A Explanation: A) On-the-job training occurs while an employee is at work; most of this training is informal. 43. Fletcher is meeting with each of his subordinates to discuss their performance over the past year. What process is he involved in? A) job description B) labor negotiations C) vestibule assessment D) performance appraisal E) financial remuneration Answer: D Explanation: D) In some small companies, performance appraisal takes place when the owner tells an employee that he or she is "doing a good job." In larger companies, performance appraisals are designed to show more precisely how well workers are doing their jobs. 44. What is the total package that a firm offers employees in return for their labor? A) wage B) salary C) benefits package D) compensation system E) retention plan Answer: D Explanation: D) In addition, the compensation package is a major factor in retaining skilled workers. 45. What do top executives often receive as incentives? A) merit salary systems B) workers' compensation insurance C) salaries D) stock options E) wages Answer: D Explanation: D) Though stock options are common incentives, such options have been at the center of some of the recent accounting scandals plaguing some businesses today. 46. A Web design company, Gen Max, is expanding rapidly and needs to hire middle managers in a climate where first to market is an imperative. Which incentive plan for these employees would best help the firm achieve its first to market goal? A) variable pay B) merit raises C) profit-sharing D) gainsharing E) pay-for-knowledge Answer: A Explanation: A) Variable pay has proven to be a high motivator for work performance. The popularity of variable pay programs has increased in the United States over the last decade. 47. Which term refers to the situation in which middle managers are rewarded for especially productive output, such as for producing earnings that significantly exceed the cost of bonuses? A) wage inflation B) a merit salary system C) a gainsharing plan D) pay for performance E) salary sacrifice Answer: D Explanation: D) Variable pay goes to middle managers on the basis of companywide performance, business unit performance, personal record, or all three factors. 48. Ace Products' profits for fiscal year 2005 have exceeded estimates by over 2 million dollars. Which plan can Ace use to distribute part of this excess to employees? A) gainsharing plan B) profit-sharing plan C) cafeteria plan D) insurance plan E) salary-sharing plan Answer: B Explanation: B) Under profit-sharing plans, profits earned above a certain level are distributed to employees. 49. Which of the following companywide incentive plans distribute bonuses to employees when a company's costs are reduced through greater work efficiency? A) wage setting plans B) pay for performance plans C) profit-sharing plans D) gainsharing plans E) pay-for-knowledge plans Answer: D Explanation: D) Gainsharing plans distribute bonuses to employees when a company's costs are reduced through greater work efficiency. 50. At Ace Products, employees receive a fixed dollar amount for benefits, but they may choose between various health insurance, life insurance, disability insurance, and educational benefits. What is the name of this plan? A) gainsharing B) profit-sharing C) cafeteria benefits D) equal employment E) retention benefits Answer: C Explanation: C) With a cafeteria benefit plan, a certain dollar amount of benefits per employee is set aside so that each employee can choose from a variety of alternatives. 51. What was the fundamental reason why affirmative action was established? A) to give certain people an unfair advantage over others in the work place B) to require diversity committees in all organizations with 50 or more employees C) to combat prejudices against baby boomers still in the workforce D) to prevent exclusion by racial and gender discrimination E) to increase global marketing for products and services Answer: D Explanation: D) Affirmative action required that organizations employ a certain amount of Hispanics, African Americans, and women to combat discrimination that those groups experience. 52. Which legal concept holds that both employer and employee have the mutual right to terminate an employment relationship any time for any reason and without advance notice to the other? A) quid pro quo B) affirmative action C) employment at will D) mutual consent E) equal employment opportunity Answer: C Explanation: C) Specifically, employment at will holds that an organization employs an individual at its own will and can, therefore, terminate that employee at any time for any reason. 53. Mary is a supervisor at her company. Under which legal concept is it legal for Mary to discharge all her employees without advance notice? A) quid pro quo B) affirmative action C) employment at will D) joint agreement E) arbitration Answer: C Explanation: C) This concept holds that both employer and employee have the mutual right to terminate an employment relationship anytime for any reason. 54. Workers such as computer scientists, engineers, and game developers who typically require extensive and highly specialize training are known as what? A) technical workers B) knowledge workers C) contingent workers D) labor relation workers E) union workers Answer: B Explanation: B) Employees who add value because of what they know are usually called knowledge workers, and the skill with which they are managed is a major factor in determining which firms will be successful. 55. Which term refers to employees hired to supplement a firm's permanent workforce? A) union workers B) contingent workers C) knowledge workers D) flextime workers E) remote workers Answer: B Explanation: B) A contingent worker is a person who works for an organization on something other than a permanent or full-time basis. 56. What are independent contractors, on-call workers, temporary employees, contract employees, and leased employees all examples of? A) union workers B) contingent workers C) migratory workers D) ancillary workers E) international workers Answer: B Explanation: B) These are categories of contingent workers, all of whom work for an organization on something other than a permanent or full-time basis. 57. What employment issue would a labor union be best equipped to resolve? A) Aarif is Muslim and requires working an alternate schedule during Ramadan, but other employees still have to work the standard 8:00 to 5:00 while he is observing the month for religious purposes. B) Celia is a Latina woman who feels she did not get hired because of her ethnicity. C) Gary has a salary that is $8,000 higher than Sarah's. Sarah and Gary are the same age with similar professional experiences. The only difference is that Sarah has a Master's degree and Gary has a Bachelor's degree. D) Daniel is of retirement age, but wants to continue to work in his organization. E) Sean is interested in applying for a position that requests applicants have higher credentials than what he has. Answer: C Explanation: C) A labor union would help fight for equal pay for women. 58. When does the collective bargaining process begin? A) when the contract is ratified by the members B) when the bargaining zone is identified C) when the union is recognized as the official bargaining agent D) when union and management representatives agree to contract terms E) when the employer establishes a maximum limit Answer: C Explanation: C) When a union has been legally certified, it assumes the role of official bargaining agent for workers; collective bargaining then begins. 59. The insurance company Montas is negotiating with its labor union on varying aspects of the compensation package including remuneration and benefits. Which strategy would be most appropriate for the CEO to use in reaching agreement on the contract terms for the amount of staff vacation? A) bargaining with union representatives for nonfinancial benefits B) expanding the use of tough bargaining tactics C) gathering information about staff expectations D) brokering the prospect of arbitration E) setting up mediation processes Answer: C Explanation: C) It would be important for the information to be gathered on the expectations for the maximum and minimum limits. 60. Which term refers to a labor action in which employees temporarily walk off the job and refuse to work? A) strike B) lockout C) boycott D) mediation E) bargaining Answer: A Explanation: A) Most strikes in the United States are economic strikes, triggered by stalemates over mandatory bargaining items, including such issues as working hours. 61. Who are temporary or permanent replacements for striking workers? A) strikebreakers B) union busters C) union breakers D) contingent workers E) labor relation teams Answer: A Explanation: A) However, the law forbids the permanent replacement of workers who strike because of unfair practices. In some cases, an employer can obtain legal injunctions that either prohibit workers from striking or prohibit a union from interfering with its efforts to use replacement workers. 62. Gretta is observing and interviewing several database administrators to determine the duties and responsibilities associated with their job as well as the knowledge, skills, and abilities that someone must have to perform the job. Which HR function is Gretta performing? A) staffing B) promotion C) job analysis D) training E) retention Answer: C Explanation: C) Job analysis is a systematic analysis of jobs within an organization, resulting in the job description and the job specification. 63. Where is a skills inventory often maintained? A) replacement chart B) employee information system C) internal supply forecast D) work flow chart E) job description spreadsheet Answer: B Explanation: B) Employee information systems are usually computerized; they contain information on each employee's education, skills, experience, and aspirations. 64. Which selection technique is most likely to introduce bias? A) interview B) application forms C) aptitude tests D) drug testing E) polygraph tests Answer: A Explanation: A) The interview is sometimes a poor predictor of job success; biases inherent in the way people perceive and judge others on first meeting affect subsequent evaluations. 65. Health Connect is a start-up software development company specializing in the design of imaging for medical practitioners. They are at the stage where they need to recruit a team of technical employees. Which of the following is the BEST reason for NOT relying solely on interviews when recruiting the technical staff? A) Interviews tend to have a poor record as a predictor of successful job performance. B) Technical staff tend to be confident people, and they all perform equally well in the interview situation. C) Start-up companies are not in the position to afford extra recruiting procedures. D) Interviews used in conjunction with polygraphs can cause job candidates to confess to crimes. E) Technical people need to be able to assess situations quickly and accurately. Answer: A Explanation: A) The interview is a widely used selection device but can be affected by the bias of the interviewer and first meeting impressions. A practical task can be effective in showing how the prospective employee would undertake a real work task. 66. When does the appraisal process begin? A) when the manager defines performance standards for an employee B) after the manager observes the employee's performance C) as soon as the employee begins working D) when the employee leaves an organization E) as soon as the employee requests direction Answer: A Explanation: A) The process begins when a manager defines performance standards for an employee; after that, the manager observes the employee's performance. 67. A restaurant is undergoing a change in cuisine and style of service. It is important that new staff are hired and existing staff retrained. Why might the HR manager recommend vestibule training as being highly effective in this situation? A) Prospective and present employees can be screened to see if they convey the restaurant's new ethos. B) Off-site training has great value for evaluating the effectiveness of performance appraisals. C) Employees will be reluctant to undertake training removed from the workplace. D) The owners can be more confident that the change to the restaurant will be popular with customers. E) Employees will see limited connections to everyday work in this type of training. Answer: A Explanation: A) Since vestibule training takes place in simulated environments, it offers employees the chance to learn new skills or retrain in a realistic setting. 68. Which of the following constitutes an illegal hiring practice? A) asking someone about their availability because the position requires a 50-hour work week B) establishing a diversity committee to help diverse employees connect with each other C) asking a candidate whether or not he attends church, because it is important that candidates are available to work on Saturdays and Sundays D) keeping track of how many males and females are in the organization E) requiring an applicant to specify gender on an application Answer: C Explanation: C) The Civil Rights Act of 1964 prohibits employers from screening a candidate for religious reasons. 69. A large clothing retailer, Finch Line, has recently expanded but is having problems retaining experienced staff, despite paying salaries that are above industry averages. Which strategy would best support the HR manager's initiative to decrease the rate of turnover of the company's experienced staff? A) offering employees a structured path to promotion B) offering across-the-board pay increases to all employees C) making cost-of-living adjustments in employees' wages D) offering staff more money for better performance E) evaluating staff expectations as they relate to management goals Answer: A Explanation: A) Naturally, employees feel better about their companies when they believe that they are being fairly compensated; however, studies reveal that beyond a certain point, more money will not produce better performance. 70. Jane, a supervisor, has offered George, a subordinate, a raise and promotion in exchange for a sexual relationship. What type of harassment is this offer an example of? A) quid pro quo B) hostile work environment C) employment at will D) reverse E) financial Answer: A Explanation: A) In cases of quid pro quo harassment, the harasser offers to exchange something of value for sexual favors. 71. Under what legal concept is Bill able to quit his job at the pickle factory at any time and without notice? A) quid pro quo B) mutual consent C) joint agreement D) employment at will E) labor relation negotiation Answer: D Explanation: D) This concept holds that both employer and employee have the mutual right to terminate an employment relationship anytime for any reason, with or without advance notice to the other. 72. In considering the contributions of knowledge workers in the information age, what value do these employees add? A) their work style B) their professional network C) their skill in a specialized field D) their management skills E) their capacity to change careers Answer: C Explanation: C) Employees who add value because of what they know are usually called knowledge workers. 73. The Internet start-up company QuickThink is considering whether to hire recent college grad Thomas as a full-time employee or as a contingent worker. Which of the following is NOT a likely disadvantage to the company if they hired Thomas as a contingent worker rather than a full-time one? A) Thomas may not be fully committed to the organization and its long-term goals. B) QuickThink will have to provide Thomas with ongoing and highly specialized training to prevent his skills from becoming obsolete. C) Thomas may lack much firm-specific knowledge. D) Managers will face possibly complicated decisions about how to integrate Thomas into the organization. E) Thomas may be less willing to engage in organizational citizenship behaviors. Answer: B Explanation: B) QuickThink would be more likely to have to provide ongoing and highly specialized training to its full-time knowledge workers than to a contingent worker like Thomas. 74. What occurs during collective bargaining? Answer: Collective bargaining is merely an ongoing process involving both the drafting and administering of the terms of a labor contract. The collective bargaining processes and their outcomes are different from one another, since the concerns of one union may have no impact on other unions. 75. Distinguish between internal and external recruiting. Answer: Internal recruiting means considering present employees as candidates for openings. External recruiting involves attracting people outside of the organization to apply for jobs. Explanation: The aim of each process is to attract the most qualified persons to apply for available jobs. 76. What is a protected class? Answer: A protected class consists of all individuals who share one or more common characteristics as indicated by a given law. Explanation: The most common criteria for defining protected classes include race, color, religion, gender, age, national origin, disability status, and status as a military veteran. 77. Explain the meaning of workforce diversity. Answer: Workforce diversity is the range of workers' attitudes, values, beliefs, and behaviors that differ by gender, race, age, ethnicity, physical ability, and other relevant characteristics. Explanation: As a result of affirmative action efforts, many U.S. organizations are now committed to creating more diverse workforces. 78. What is an impasse in labor relations? Answer: An impasse occurs when, after a series of bargaining sessions, management and labor have failed to agree on a new contract or a contract to replace an agreement that is about to expire. Explanation: It is generally agreed that both parties suffer when an impasse is reached. Both parties can use several tactics to resolve the impasse. 79. How do human resource managers use job analysis for human resource planning? Answer: The basis for human resource planning is job analysis. Job analysis is the evaluation of the duties required by a particular job and the qualities required to perform it. Explanation: HR planning involves job analysis and forecasting the supply and demand for labor. 80. How do organizations develop workers' skills? Answer: The firm must acquaint new employees with the firm and their jobs. Managers train employees and develop job skills. Explanation: On-the-job training occurs while the employee is at work. Off-the-job training takes place away from work. 81. Describe how wages, salaries, incentives, and benefits programs help companies attract and keep skilled workers. Answer: A major factor in retaining skilled workers is a compensation system, the total package that a firm offers employees in return for their labor. Wages are paid for time worked; a salary is paid for discharging the responsibilities of a job. Incentive programs are designed to motivate performance and include bonuses, merit salary systems, pay for performance, profit-sharing, gainsharing, and pay-for-knowledge plans. Benefit programs include workers' compensation insurance, retirement plans, and cafeteria benefit plans. Explanation: Finding the right combination of compensation elements is always complicated by the need to make employees feel valued, while holding down company costs. 82. What are the two types of sexual harassment as defined by the courts? Answer: In cases of quid pro quo harassment, the harasser offers to exchange something of value for sexual favors. In hostile work environment harassment, the workplace is tainted by off-color jokes, lewd comments, or other actions that make employees uncomfortable. Explanation: Companies must deal with sexual harassment by warning, reprimanding, or firing the harasser. 83. How can diversity create competitive advantage? Answer: Workforce diversity is the range of workers' attitudes, values, beliefs, and behaviors that differ by gender, race, and ethnicity. By hiring the best people from every group rather than hiring from just one or a few groups, a firm can develop a higher-quality labor force. Explanation: A diverse workforce can bring a wider array of information to bear on problems and can provide insights on marketing products to a wider range of consumers. 84. Explain the difference between labor relations and a labor union. Answer: Labor relations refers to the process of dealing with employees who are represented by a union, while a labor union is a group of individuals working together to achieve shared job-related goals. Explanation: The goals of a labor union may include higher pay, shorter working hours, more job security, greater benefits, or better working conditions. 85. What options are available to the union when contract negotiations break down? Answer: When contract negotiations break down, unions may strike (refuse to work), picket (publicize grievances at the entrance to the employer's facility), boycott (refuse to buy the products of the employer), or slowdown (perform jobs at a slower pace). Explanation: These actions taken by the labor union are tactics used to support their cause. 86. What options are available to management when contract negotiations break down? Answer: When contract negotiations break down, management may institute a lockout (workers are denied access to the workplace) or use strikebreakers (hire nonunion workers as temporary replacements for striking employees). Explanation: Managers and workers both have a range of tactics that they can use to advance their cause. 87. What does a job analysis entail? Answer: A job analysis is a systematic analysis of jobs within an organization. A job analysis results in two things: the job description and the job specification. The job description lists the duties and responsibilities of a job; its working conditions; and the tools, materials, equipment, and information used to perform it. The job specification lists the skills, abilities, and other credentials and qualifications needed to perform the job effectively. The job analysis information is used in many HR activities. For example, knowing about job content and job requirements is necessary to develop appropriate selection methods and job-relevant performance appraisal systems and to set equitable compensation rates. 88. Contrast internal and external recruiting. Answer: Internal recruiting means considering present employees as candidates for openings. Promotion from within can help build morale and keep high-quality employees from leaving. In unionized firms, the procedures for notifying employees of internal job-change opportunities are usually spelled out in the union contract. For higher-level positions, a skills inventory system may be used to identify internal candidates, or managers may be asked to recommend individuals who should be considered. External recruiting involves attracting people outside of the organization to apply for jobs. External recruiting methods include advertising, campus interviews, employment agencies or executive search firms, union hiring halls, referrals by present employees, and hiring walk-ins or gate-hires. A manager must select the most appropriate method for each opening. 89. What common incentive program options are available for workers? Answer: Incentive programs are special-pay programs designed to motivate high performance. A sales bonus is a typical incentive; a bonus is a special payment above one's salary. Merit salary systems, on the other hand, link pay raises to performance levels in non-sales jobs. Executives commonly receive stock options as incentives. Further, pay for performance, or variable pay, is a newer incentive plan in which middle managers are rewarded for especially productive output—for producing earnings that significantly exceed the cost of bonuses, for example. Profit-sharing plans distribute profits earned above a certain level to employees; conversely, gainsharing plans distribute bonuses to employees when a company's costs are reduced through greater efficiency. Pay-for-knowledge plans encourage workers to learn new skills and to become proficient at different jobs; they receive additional pay for each new skill or job that they master. 90. Explain the role of equal employment opportunity and the Equal Employment Opportunity Commission. Answer: The basic goal of equal employment opportunity regulation is to protect people from unfair or inappropriate discrimination in the workplace. Problems arise when distinctions among people are not job related. Courts have determined that illegal discriminatory actions by an organization or its managers cause members of a "protected class" to be unfairly differentiated from other members of the organization; a protected class consists of all individuals who share one or more common characteristics as indicated by a given law. The most common criteria for defining protected classes include race, color, religion, gender, age, national origin, disability status, and status as a military veteran. The Equal Employment Opportunity Commission (EEOC) is a division of the Department of Justice. The EEOC was created by Title VII of the 1964 Civil Rights Act and has specific responsibility for enforcing Title VII, the Equal Pay Act, and the Americans with Disabilities Act. 91. Describe the current trends in labor-management relations in the United States. Answer: Since the mid-1960s, U.S. labor unions have experienced increasing difficulties in attracting new members. Today, about 12 percent of all U.S. workers belong to a labor union. However, union membership took a jump in 2009, in part due to worker concerns about job security during the 2008-2009 recession. Explanation: Another issue affecting trends in unionism is the geographic shift in the U.S. economy. For the most part unionism in the United States started in the north and midwest regions and in cities like Detroit, Pittsburgh, Cleveland, St. Louis, and Chicago. But over the past several decades there has been a pronounced shift as businesses have moved their operations to the south and southwest, areas that do not have a strong union heritage. 92. Explain how COLA works. Answer: Most COLA clauses tie future raises to the Consumer Price Index (CPI), a government statistic that reflects changes in consumer purchasing power. Almost half of all labor contracts today include COLA clauses. A union might be uncomfortable with a long-term contract based solely on COLA wage increases. One solution is a wage reopener clause, which allows wage rates to be renegotiated at preset times during the life of the contract. Explanation: Compensation includes both current and future wages. A cost-of-living adjustment is a common tool for securing wage increases. 93. How does NetFlix attempt to meet employees' social needs? Answer: NetFlix attempts to meet employees' social needs by allowing them to work with friends, be part of a team, and belong to a group. Explanation: Employees are encouraged to recommend people that they've enjoyed working with at other jobs. 94. How does NetFlix attempt to meet employees' esteem needs? Answer: NetFlix works to fulfill employees' needs for esteem by providing an employer that is well liked. The job pages of the company's Web site say, "It is satisfying to work at a company that people love." Explanation: NetFlix is ranked number one in customer satisfaction across the entire Internet, ahead of companies like Apple and Amazon. 95. How is NetFlix different from Hastings' first start-up, Pure Software? Answer: Pure Software was once an exciting place to work, although it became more bureaucratic as it grew. Hastings vowed not to repeat that experience with NetFlix. Explanation: By encouraging creativity and entrepreneurship, Netflix has remained a dynamic workplace as it has grown. 96. What are the two common tools used by labor in union contracts to secure wage increases? Explain. Answer: First, a cost-of-living adjustment (COLA) ties future raises to the consumer price index (CPI); the assumption is that wages will automatically increase to keep up with this index. Second, a wage reopener clause allows wages to be renegotiated at preset times during the life of the contract. 97. What challenges faced Entergy after Hurricane Katrina? How did the CEO motivate employees to respond? Answer: When Katrina hit, more than 1 million Entergy customers were left without power, including 1,500 Entergy employees. Using optimistic e-mails, CEO Leonard was able to motivate Entergy employees by appealing to employees that their work was valuable to the community. Explanation: His appeal to employees was based on a company culture where workers believed that they could make a difference. Super TV Channel 6 operates in a major Midwestern city and is on the air 24 hours a day. Labor-management relations there have been relatively good over the years. There are three unions: one for engineers, one for announcers and newspeople, and still another for stagehands and projectionists. As might be expected, the serious concerns of one union usually have no impact whatsoever on the other unions. One Wednesday night, a group of the engineers became very unhappy and called the station manager of Super Channel 6 to say they would be going out on a 24-hour work stoppage that would last from 3:00 p.m. Thursday until 3:00 p.m. Friday. It was not necessary to tell the boss their gripe; he already knew. Sure enough, at 3:00 p.m. on Thursday, the engineers walked off the job. The leadership of the union never gave its blessing to this group of engineers walking out and, in fact, urged them to reconsider. When the stoppage was over and the engineers came back to work at 3:00 p.m. on Friday, the manager said that he would not need them until 3:00 p.m. on Saturday. 98. How does the employment-at-will doctrine apply at Super TV Channel 6? Answer: The employment-at-will doctrine may apply to certain of Super TV Channel 6 employees, but it does not apply to those employees who are members of the three unions. Job security is an important issue for many unions nowadays. 99. The environment at Super TV Channel 6 displays workforce diversity. What does this mean? Answer: Workforce diversity suggests a wide range of workers' attitudes, values, beliefs, and behaviors that differ by gender, race, age, ethnicity, physical ability, etc. 100. When the engineers came back to work at 3:00 p.m. on Friday, which management tactic did the company employ? What message did management send through this tactic? Answer: The management of the company used a lockout, where workers are denied access to the employer's workplace. This was a retaliatory action in response to the work stoppage organized by the workers. Lockouts allow management to demonstrate its power over workers, by barring them from the workplace and denying them a day of pay. 101. If Super TV Channel 6 is unable to come to agreement with the engineers, how might a third party assist in the process? Answer: Third party intervention might come in the form of mediation or arbitration. In mediation, a neutral third party suggests, but does not impose, a settlement. In arbitration, a neutral third party listens to both sides and imposes a legally binding settlement. 102. Other than the union tactic chosen, describe the other options that were available to the union. Answer: The union had a number of options, including picketing, boycott, and slowdown. Union members could have picketed outside of the station, making the public aware of their concerns with management. Union members might have chosen a boycott, refusing to watch programming on Super Channel 6. One final option would be to slowdown, where union members show up for work, but put in minimal levels of effort. Crescendo Inc. distributes musical and band instruments nationwide. Reductions in high school musical programs and the economic recession have led to a sharp downturn in sales. Because of this, a salary freeze has been in effect for three years, and increases in health care premiums and co-pays have cut into workers' take-home pay. Nevertheless, the firm has avoided layoffs, the workforce has experienced minimal turnover, and the firm has lost only a handful of employees, mostly for health reasons. The CEO considers this continuity of the workforce a healthy sign, but the Human Resources Director is less sanguine. She feels that the workplace culture is becoming inbred and too focused on maintaining job security rather than looking for ways to be truly engaged in the company's goals. 103. Which of the following, if true, would MOST support the CEO's position that the firm is basically healthy? A) Sales have declined proportionally less than those of Crescendo's competitors. B) Supervisors report few complaints coming from their subordinates. C) With the economy improving, the firm is beginning to turn a profit. D) It has been easy to replace the positions that have come open. E) The company has always rewarded its top performers in each division. Answer: A Explanation: A) Engagement is closely tied to productivity, and problems quickly show up in the form of lower profitability. So Choice A is correct: even if economic conditions are hurting sales, evidence that the company is holding its own against competitors is a sign of underlying health. Choice B does not necessarily show that no problem exists, as workers may have complaints but not feel that reporting them does any good. Choice C: Turning a profit might simply be a sign of a general economic recovery that lifts all companies, even those affected by disengagement. Choice D is not relevant to the issue, as it does not show that those who take the jobs become fully engaged. Choice E, while a good practice, may reward the same achievers over and over, but not motivate the other workers. 104. Which of the following, if true, would support the HR Director's position that the firm's workforce is at risk of becoming disengaged? A) National polls show that less than a third of all employees are fully engaged in their work. B) The firm's stated vision holds that each and every employee must be committed to the company's goals. C) There are few job openings in Crescendo for which Crescendo employees can apply. D) Crescendo offers only voluntary training programs to prepare workers for job advancement. E) Appraisal reviews of employees are held only once a year. Answer: C Explanation: C) When employees feel that they have no reasonable opportunity except to stay in their present jobs, the danger of disengagement can quickly arise. So Choice C is correct, as it suggests that Crescendo's workers might be staying on out of necessity rather than loyalty to the company. Choice A shows that disengagement is more common than one might expect, but doesn't require that the statistics hold for Crescendo's workforce. Choice B, on the other hand, is a stated goal that, if actually embraced by management and workers, would tend to encourage an atmosphere of engagement. Choices D and E are practices that probably should be revised to deal more proactively with the issue, but they do not in themselves indicate that a problem exists. The Human Resources department of a large organization is interested in measuring the personality traits of its potential employees. The job applicants have been assured that they should feel free to answer honestly and that all responses will be anonymous. 105. All of the following point out reasons why the Human Resources department should be skeptical about the data collected EXCEPT: A) The applicants may not believe that the responses will truly be anonymous. B) The applicants may not be able to accurately measure their own personality traits. C) The applicants may deliberately exaggerate their positive characteristics. D) The applicants' responses may not show any connection between personality and job performance. E) The applicants' responses may reflect their mood only at the time of the test. Answer: D Explanation: D) All of the choices point out reasons to be concerned except Choice D. True, the data may not show any connection between personality and job performance, but that is no reason not to trust the data. There might simply be no connection between those things. 106. The applicants are likely to give inflated estimates of all of the following EXCEPT: A) emotional stability, including the person's ability to withstand stress B) conscientiousness, a measure of reliability C) agreeableness, a measure of the ability to cooperate D) risk-taking, a measure of eagerness to take chances E) self-monitoring, a measure of the ability to alter one's behavior based on external factors Answer: D Explanation: D) All of the choices are positive things that everyone would like to have in basically all circumstances except Choice D. Risk-taking is sometimes a good thing, but people are unlikely to claim that they take chances much more often than they do. It's always possible that some applicants would exaggerate their eagerness to take risk, but almost everyone would tend to exaggerate the characteristics in the other four choices. After several years of sound but unimpressive performance, Foothill Federal, a regional bank chain, was bought out by Cashcorp, a much larger financial organization. Hoping to turn the new network into a stronger asset to the corporation, Cashcorp's managers begin by examining Foothill's existing performance appraisal process. Cashcorp managers quickly determine that employee evaluations have been handled very superficially in the past, typically by division managers at the central location. As a result, seniority, rather than productivity, has been the primary rationale for promotions and rewards. The HR manager assigned to integrating Foothill into the Cashcorp family immediately sees that changes will need to be made in the performance appraisal process. However, he does not want to move too rashly, as the merger has already made the Foothill workforce worried that extensive terminations and layoffs are imminent. 107. Which of the following, if true, would most strongly support beginning a thorough performance appraisal of the Foothill locations by reassessing performance criteria? A) Corporate practice has always been to reassess performance criteria on an annual basis. B) The performance goals used by Foothill are quite different from those used by Cashcorp. C) The Cashcorp CEO would like to see the new Foothill locations increase their assets by at least 15 percent. D) The two best performers among the Foothill branches are the most recently opened, and its employees have the fewest years of service with the firm. E) Employees at Foothill have been with the firm an average of twelve years. Answer: D Explanation: D) If Cashcorp's goal is to improve performance among the new branches, then clearly it needs to see if the existing criteria in fact correlate with success. So Choice D is correct: if seniority were an effective way to determine which personnel deserved rewards, one would expect the oldest branches to be the most productive ones, but this is not true. Choice B also supports the need for reassessing criteria, but less strongly, as it is possible that Foothill's reward system is different from Cashcorp's, and equally effective. Likewise, Choice C creates a specific goal for performance, but the performance criteria that Foothill has used to encourage employees to meet such goals might already be adequate. Choice A simply states a business standard that needs to be considered in light of this particular situation, and Choice E is not relevant to the issue. 108. Which of the following, if true, would MOST strongly support changing who is responsible for performance appraisals at Foothill? A) The supervisors carrying out appraisals were all assigned to Foothill's central location, even though most of the employees they evaluated were at branches. B) The web-based performance appraisal software already used by Cashcorp allows employees to do self-evaluations. C) Cashcorp has a more detailed and clearer set of corporate objectives than Foothill used in appraisals. D) Industry-wide research shows that peer appraisal has a more direct impact on employees than supervisor appraisal. E) A regional news report claimed that Cashcorp was prepared to trim the Foothill workforce by up to 30 percent. Answer: A Explanation: A) When the employee and the appraiser are not at the same location, it becomes more difficult to evaluate performance objectively. So Choice A is correct: Cashcorp would likely want to involve regional line managers, peers, or subordinates in the appraisal process to improve its quality. Choices B and D might be reasons to involve employees in future evaluations but they don't address the current situation at Foothill. Choice C mentions one factor that should allow for better appraisals in the future, whoever does them. A news report (Choice E) may or may not be accurately predicting future actions. Domino Grace is a financial services firm. Currently, it offers competitive salaries and very generous benefit packages. The cost of those packages is very high, but the company believes that these benefits have helped it attract and keep top talent. Domino Grace is completing a merger with Kryptos, Inc. Salaries at Kryptos are slightly below industry averages, and the benefit packages it offers are considerably worse than those offered by Domino Grace. Domino Grace believes that the merger would be in the best interest of the company, but employees at Domino Grace are resisting this change in part because they are worried that they will lose their outstanding benefits after a merger is complete. The CEO of Domino Grace believes that the best way to overcome the employees' resistance to change is through education and communication. The Kryptos CEO believes that it will be necessary to force the employees to accept the changes. 109. Which of the following, if true, would most weaken the Domino Grace CEO's argument? A) Kryptos' stable finances offer outstanding long-term stability. B) Both Domino Grace and Kryptos use a variety of tools to communicate their corporate cultures, such as stories, awards, and special employee-only events. C) Kryptos' latest offer involves paying a higher price to Domino Grace shareholders if the combined company adopts Kryptos' benefits policy. D) Domino Grace divisions are assigned based on the customers they serve, and not functional areas. E) Kryptos has announced that it would follow Domino Grace's policies for attracting and retaining talent. Answer: C Explanation: C) Education and communication make sense when the resistance is due to misinformation. But if Choice C is true, then it stands to reason the employees would resist even harder if they knew the truth. Choices A and E strengthen the claim that education and communication would help. Choice B, if anything, suggests a similarity, which would support the education and communication approach. Choice D tells us something about Domino Grace but nothing about Kryptos. If the approaches were very different then Choice D might be relevant, but as it stands Choice D makes no difference. 110. Which of the following, if true, would most strongly support the Domino Grace CEO's argument? A) The current proposal calls for all Kryptos employees with outstanding benefit packages to keep them in the merged company. B) Shareholders of Domino Grace tend to support the merger. C) According to the charters of both companies, any savings from reducing benefits would be recorded in a post-merger report. D) A recent economic downturn has reduced the ability of many in the financial services industry to find new jobs. E) Kryptos provides paths to advancement that are faster than those offered by most companies in the industry. Answer: E Explanation: E) The concern about benefits is a real one, but it can't be the only factor in the merger. Maybe some of the other factors will provide good news. If Choice E is true, then a merged company might provide faster paths to promotion. This would strengthen the view that education and communication would help. Choice A would support the argument if the Domino Grace employees got to keep their benefits. But Choice A says that the Kryptos employees are the ones who get to keep them. Choice B says that the shareholders like the deal, but they aren't the ones who are resisting change. It's the employees of Domino Grace that are at issue here. Choice C says that they wouldn't be able to keep savings secret, but why would they want to? Choice D suggests that the Domino Grace employees have less bargaining power, which should make them more nervous about the change. 111. Which of the following, if true, would strengthen the Kryptos CEO's argument? A) Mergers are more common in the financial services industry than in many other industries. B) Mergers are easier to execute when the merged organizations have similar corporate cultures. C) At Kryptos, Accounting, Operations, and Human Resources are among the departments that already have the capacity to serve a much larger organization. D) Overcoming resistance to change by using threats and other forms of coercion is usually considered only after all other options have been considered. E) Kryptos offers employees the opportunity to serve for a year or more in overseas offices. Answer: C Explanation: C) If news is clearly bad, then trying to claim that it's good can just make the situation worse. If Choice C is true, and the Kryptos departments can serve the merged company by themselves, then the merged company will have a real opportunity to get rid of workers at Domino Grace. That could be good for the company but bad for the workers. So Choice C slants things toward force as a method to overcome change. Choice A is too vague, saying nothing about Domino Grace or Kryptos. Choice B doesn't help because we don't know anything about the similarity of the cultures here. Choice D says that threats and force are a last resort, but Choice D doesn't help us decide if they are appropriate here. Choice E suggests that the merger may not be so bad, which would make force less necessary. 112. Which of the following, if true, would undermine the Kryptos CEO's argument? A) A few years ago, Kryptos merged with another company. B) Concern over a possible reduction of benefits is only one of many reasons why Domino Grace employees object to the merger. C) Attempting to overcome change through hiding the truth about the effects of the change can undermine management's credibility. D) Customers have strong connections to their Domino Grace brokers but little loyalty to Domino Grace as a company. E) Employees at Domino Grace who have counterparts performing similar work at Kryptos tend to be paid more than their Kryptos counterparts. Answer: D Explanation: D) The Kryptos CEO thinks force is necessary, but if Choice D is true, then force might not be an option at all. If the customers connect with specific people more than they connect to Domino Grace, then those employees could ruin the business if they left. Choice D undermines the power of the company and so undermines the Kryptos CEO's argument. Choice A tells us nothing about the circumstances of that merger, whether there was any resistance to those changes, or what (if anything) was done in response. Choice B says that the resistance is even worse, which would strengthen the argument. Choice C is an argument against lying, but the CEO doesn't propose to lie. Choice E suggests that the Domino Grace employees might have it better in a merged company. This would support the education and communication approach. Roarke: To measure the effects of our educational programs designed to stop sexual harassment at our workplace, we recently conducted a survey asking employees about their attitudes and the behavior of the people around them. The survey, conducted after the programs, showed no improvement in either attitudes or behavior. Obviously, then, the survey was conducted improperly. 113. Which of the following is assumed by Roarke's argument? A) Every employee would benefit from some training in stopping sexual harassment. B) The attitudes and behavior of the organization's employees were worse than those of most employees in the industry. C) The educational programs were the most effective programs that could have been offered. D) The effects of the educational programs in changing attitudes were greater than they were in changing behavior. E) The educational programs had a significant effect on either attitudes, behavior, or both. Answer: E Explanation: E) Roarke finds that the programs had no effect and therefore concludes that the survey must be wrong. This discounts the possibility that the programs had no effect, and so Roarke assumes Choice E. Choices A and B, if true, would suggest that the organization has a problem, but neither needs to be true in order for Roarke's argument to work. Roarke's conclusion could be true even if the organization is doing well in this regard. Choice C is too extreme. Roarke doesn't assume that the programs were the best possible. If they were just pretty good one would expect them to have some effect. Choice D: Roarke doesn't make any distinction between those two aspects. Roarke just expects some effect somewhere. 114. Which of the following most closely resembles the flawed reasoning employed by Roarke? A) This lawn chair must have been improperly designed. A large number of customers have complained that it rusts quickly and then falls apart. B) The plan for the new office building must not have been well-reasoned, as it provides no backup plan in case of poor weather or other unforeseen events. C) The inspection must have not have been competently done. After all, it failed to uncover any mold. D) Every project that follows the ACME quality procedure is run efficiently, effectively, or both. Since the Prensabi project followed the procedure and was not effective, it must have been run efficiently. E) The review of our ethical standards reveals serious breaches of professional standards. But this review must be wrong, because all of our employees are paid, and therefore each must be a professional. Answer: C Explanation: C) Roarke argues that the survey must be wrong because it failed to reveal an effect. Similarly, in Choice C the inspection is alleged to be faulty because it failed to reveal mold. In each case, the speaker neglects the possibility that the thing being searched for (effects, mold) didn't exist at all. Choices A, B, and D are not flawed. Choices A and B seem reasonable enough, and Choice D is actually valid reasoning. Choice E is bogus, for a different reason: Choice E uses two distinct meanings of the term "professional." It would be absurd to claim that anyone who is paid automatically meets "professional standards." This is a logical flaw, but not the one Roarke makes. Dexterity Business School provides short-term training workshops to a variety of corporations, out of a chain of small centers across the country. The instructors leading the workshops are hired on a contingent basis, and paid a set lump sum for each program. A supervisor at each location is responsible for recruiting instructors and providing them with Dexterity's prepared teaching materials. At the Canal City location, Andy Ashe has been leading these workshops for several years, and has been asked back several times by local businesses who find his workshops especially popular because of his verbal skills and keen sense of humor. The supervisor, Charlotte Monahan, has found that while her location contracts with several other instructors, businesses often ask for Ashe by name, even agreeing to postpone their contracted sessions until he is available. Dexterity's policies state that all contingent instructors are paid the same rate per workshop. Nevertheless, Ashe is aware of his popularity, and requests that Monahan start giving him a higher rate for his workshops. 115. Which of the following, if true, would most strengthen Ashe's case? A) Ashe has led more different training workshops than any other contingent worker. B) Losing Ashe as an employee would mean that companies who prefer his workshops would consider no longer contracting with Dexterity. C) Ashe has worked for Dexterity for fifteen years, longer than any other contract employee. D) A local teacher in the high school, Ashe has repeatedly received awards for his classroom performance. E) The businesses that contract with Dexterity consider the workshops essential to their operation. Answer: B Explanation: B) If an employee's expertise has become important to the overall productivity of the branch, then it makes sense that this worker's payment be increased. So Choice B is correct: if Ashe's departure would mean a loss of business, then clearly he has a strong case for requesting a higher salary. None of the other choices are as convincing. It may be true that Ashe is well qualified and experienced, as Choices A, C, and D hold, but if Dexterity can provide equally qualified trainers, then none of these support his sense that he is more valuable than the rest. Likewise, Choice E holds no ground if Dexterity can fulfill the contract with a qualified worker. 116. Which of the following, if true, would most strengthen Dexterity's case in maintaining Ashe's current contract rate? A) Monahan has never directly observed Ashe's performance in presenting a workshop. B) As a contract worker, Ashe does not receive medical or retirement benefits. C) Monahan has few applications from other qualified instructors in the area. D) Dexterity uses a single-rate system for contingent workers. E) There is no other agency in Canal City with whom Ashe could contract to provide similar workshops. Answer: E Explanation: E) Ultimately, competition in the marketplace determines a worker's economic worth, and if only one firm offers a given job, then that firm sets the pay rate. So Choice E is correct: if Ashe cannot bargain for a higher rate with another employer, then Dexterity has the upper hand in this issue. Choice D may also be a factor, but if Ashe can show that he is more skilled and productive than other contract employees, then Dexterity's case is weak. Choice C also tends to strengthen Ashe's position as a uniquely qualified candidate. Choices A and B are not really relevant to the salary issue. Florabunda, a national wholesale plant supply company that caters to home gardeners, maintains greenhouses in several Southern states. These provide flower and vegetable seedlings for nurseries and garden centers nationwide, and also pots of flowering plants, such as tulips and poinsettias, for other holidays. Relations with employees seemed smooth for some years, but over time the firm has come to rely on short-term contingent labor, especially in the spring when Florabunda fulfills large standing orders for bedding plants. At one of the largest greenhouse locations, in Plano, Texas, employees invite the United Food and Commercial Workers (UFCW) to represent them as a union. The Florabunda greenhouse engages in collective bargaining with the UFCW. A key issue involves workplace safety, as the greenhouses are often fumigated with pesticides to kill insects. Management claims that it takes customary and effective precautions to protect the health of its workers, whereas the union expresses concerns that the pesticides might cause long-term health problems. 117. While bargaining over the workplace safety issue, which of the following strategies would be most beneficial in keeping the process moving ahead in good faith? A) Be aware that each side needs to show that it has obtained important concessions. B) Be as flexible as possible with the objectives behind each bargaining move. C) Warn that if the conflict is not resolved, each side is prepared to stage a strike or lockout. D) Begin by making extravagant demands, which the other side is not expected to accept. E) Try to come to agreement on points of conflict as quickly as possible. Answer: A Explanation: A) The negotiation process is essentially one of compromise, in which each side expects to give ground on one front in order to gain ground on another. So Choice A is correct: even when one side may have the power to win an overwhelming victory, it needs to take care not to create hard feelings that will result in a long war. Choice B sounds positive, but if the objectives behind a bargaining position aren't clear, the process will lead to confusion rather than resolution. Choices C and D are both typical moves in the bargaining process, but they are extreme positions from which the process should move toward compromise. Choice E also is easier said than done: a better policy is to be patient and give the process the time it needs to satisfy both sides. 118. It quickly becomes apparent that there is no medical consensus over whether a disputed pesticide causes long-term medical effects, when used according to directions. Management therefore does not want to discontinue use of the pesticide, as replacing it would be costly. However, it proposes to provide more detailed instructions to avoid misuse of the compound, and to train all workers thoroughly. If the union reps are not satisfied, which of the following would be their most productive next step? A) Threaten a strike if the compound is not removed from use at the greenhouse. B) Concede the point to management and move on to more difficult issues. C) Form a joint subcommittee made up of management and union members, to study the issue more thoroughly. D) Organize a boycott among nurseries and garden centers that deal with the greenhouse. E) Refuse to meet with management negotiators until the union demand is met. Answer: C Explanation: C) In a case in which neither side has clear-cut facts that resolve an important dispute, it is best to delegate the matter to a smaller group to study it in private. So Choice C is correct: a subcommittee can often reach a consensus informally, which then can become the basis for more formal negotiation. Choice B (accepting the counteroffer) is also a possibility, especially as it shows good faith, but is less productive, as research may well confirm the long-term effects of the chemical. The other options would be unproductive and lead to an impasse that might be costly to each side. Choices A and E in particular allow a single issue to overrule the whole negotiating process. Choice D would involve a secondary boycott, which is not legal under federal law. 119. The two sides reach an impasse, with the union demanding more expensive safety measures than management feels are necessary. If the two sides opt for arbitration as the next step, which of the following should both sides take care to do? A) Gain popular support for their position through carefully chosen media exposure. B) Hide from the other side any information that weakens their position. C) Stick to their positions as strongly as possible, hoping that the arbitrator will favor that side. D) Do everything possible to draw out the arbitration process as long as possible. E) Prepare to present the case for their solution as if they were about to argue the case before a judge and jury. Answer: E Explanation: E) The process of arbitration is based on the same process as hearing a case in the courtroom. So Choice E is correct: whether the arbitrator conducts the hearing like a judge or not, each side should come fully prepared both to present their point of view and to challenge the other side's position. The other choices are, to a greater or lesser degree, counterproductive. Withholding information (Choice B) and employing delaying tactics (Choice D) are strategies that could be seen as violations of good faith. Trying to influence the arbitrator through popular opinion (Choice A) also is risky and potentially counterproductive, as is doing nothing and hoping for the best (Choice C). 120. The impasse continues, and the UFCW threatens to call a strike during the high-demand period of spring. What would be the most prudent response that management could use to try to overcome the breakdown in negotiations? A) Institute proceedings to decertify the union's right to bargain at the greenhouse. B) Run the greenhouse for several days with management personnel, helped out with nonunion contract employees. C) Plan to halt operations at the affected greenhouse for several weeks, until the striking workers' resources are depleted. D) Organize a picket line outside the greenhouse. E) Concede to the union's demands, even though they will have a serious impact on Florabunda's finances. Answer: B Explanation: B) One of the standard responses to the threat of a strike is the lockout, or denial of work to the unionized employees. So Choice B is correct: if the firm can show that production levels can be maintained in the absence of union employees, labor is likely to resume negotiations. The other choices are either counterproductive or irrelevant. Choice A (decertifying the union) is an option that must be initiated by employees, not management, and Choice D is a tactic that the union rather than management might consider. Choice C (halting operations at a time of peak demand) and Choice E (conceding to the demands) would hurt the company financially, in the short and long run. Test Bank for Business Essentials US Edition Ronald J. Ebert, Ricky W. Griffin 9780133034028, 9780273766599, 9780136070764