chap 014

Chapter 14 Retention Management

Chapter 14 - Retention Management

Chapter 14Retention Management

Turnover and Its Causes

True / False Questions

1.There are several positive, functional outcomes of employee turnover.TrueFalse

2.Avoidable turnover is that which could have been prevented by actions like a pay raise or a new job assignment.TrueFalse

3.An employee's perceived desirability of movement can depend on reasons that have little or nothing to do with the job.TrueFalse

4.An employee's overall intention to quit depends on the desirability of leaving, ease of leaving, and alternatives available to the employee.TrueFalse

5.Employees who have a high intention to quit necessarily end up quitting their jobs.TrueFalse

6.Desirability of movement is a weak predictor of voluntary employee turnover.TrueFalse

7.Availability of promotions or transfers may lessen or eliminate any intentions to quit, even though the employee is very dissatisfied with the current job.TrueFalse

8.Discharge turnover is primarily due to extremely poor person/organization matches.TrueFalse

9.Downsizing turnover is a reflection of a staffing level mismatch in which the organization actually is, or is projected to be, overstaffed.TrueFalse

10.Of the three types of employee turnover, discharges are the most prevalent.TrueFalse

Multiple Choice Questions

11.The types of employee turnover include ___________.A.voluntaryB.dischargeC.downsizingD.all of the above

12.Discharge turnover is usually due to ___________.A.a site or plant closingB.permanent layoffC.poor employee performanceD.none of the above

13.Turnover due to organizational downsizing is classified as ______.A.voluntaryB.involuntaryC.supplementalD.it depends on the circumstances of the downsizing

14.The desirability of leaving an organization is often an outgrowth of _________.A.poor person/organization matchB.favorable labor market conditionsC.general, transferable KSAOsD.none of the above

15.An employee's intention to leave an organization is influenced by __________.A.perceived desirability of movementB.perceived ease of movementC.alternatives available to the employeeD.all of the above

16.Ease of leaving is greater when ____.A.employees are highly embeddedB.employees possess ample employer-specific KSAOsC.labor markets are looseD.all of the above

17.Downsizing is typically a reflection of __________.A.overstaffingB.understaffingC.an appropriate staffing levelD.none of the above

Analysis of Turnover


18.Data are seldom available regarding when or where employee turnover is occurring in most organizations.TrueFalse

19.Research suggests that there are differences between the reasons for turnover that employees provide in exit interviews and the reasons employees provide in anonymous surveys.TrueFalse

20.Because it is typically very easy to collect and analyze job satisfaction data meaningfully, most organizations make this a cornerstone of their retention strategy.TrueFalse

21.Exit interviews should be conducted by exiting employee's immediate supervisor whenever possible.TrueFalse

22.The interviewee in an exit interview should be told that the comments that he/she makes will be confidential and that only aggregate results will be used by the organization.TrueFalse

23.Postexit surveys should ask be mailed quite some time after the employee's last day of work so the individual has sufficient time to reflect on his or her experiences.TrueFalse

24.Economic costs associated with voluntary turnover include accrued paid time off and temporary coverage.TrueFalse

25.Material and equipment costs are likely to be the most prevalent in replacement and training costs.TrueFalse

26.The primary immediate benefit of turnover for employers is hiring inducements.TrueFalse

27.Compared to discharge turnover, voluntary turnover is usually more costly.TrueFalse

28.Turnover cost estimates are very precise and accurate in most cases.TrueFalse

29.Many turnover costs are hidden in the time demands placed on the many employees who must handle the separation, replacement, and training activities.TrueFalse

30.One potential benefit of employee discharges is the development of improved performance management and disciplinary skills.TrueFalse

31.Downsizing costs are concentrated in separation costs for permanent reductions in force.TrueFalse


32.Exit interviews can be used to explain _________ to departing employees.A.rehiring rightsB.benefitsC.confidentiality agreementsD.all of the above

33.Which of the following is a suggestion for conducting an appropriate exit interview?A.The interviewer should be the employee's immediate supervisor.B.There should be an unstructured interview format.C.The interviewer should prepare for each interview by reviewing the interview format and the interviewee's personnel file.D.None of the above

34.Which of the following is a common tool to assess employee reasons for leaving?A.Position analysisB.Job rotationC.Exit interviewD.Discharge notification

35.Economic separation costs associated with voluntary turnover include ________.A.hiring inducementsB.rehiring costsC.manager's timeD.more than one of the above

36.Replacement costs associated with voluntary turnover include __________.A.HR staff induction costsB.mentoringC.severance payD.contagion

37.Which of the following is a potential benefit associated with voluntary employee turnover?A.lowered replacement costsB.savings from not replacing an employeeC.vacancy creates an open job that must be staffedD.all of the above

38.Which of the following makes involuntary turnover potentially more costly than a similar level of voluntary turnover?A.Accrued paid time offB.Possibility of a lawsuitC.Staffing costs for a new hireD.Formal training

39.Economic costs associated with downsizing include ___________.A.threat to harmonious labor-management relationsB.decreased employee moraleC.higher unemployment insurance premiumsD.difficulty in attracting new employees

40.Which of the following is a potential benefit associated with downsizing?A.focus on core businesses, eliminating peripheral onesB.spreading risk by outsourcing activities to other organizationsC.lower payroll and benefit costsD.all of the above

Retention Initiatives: Voluntary Turnover


41.A recent Society for Human Resource Management (SHRM) survey found that the most effective organizational strategy for retaining employees is the provision of concierge services.TrueFalse

42.Surveys suggest that HR managers believe that a totally different set of factors lead to turnover compared to regular employees.TrueFalse

43.To have the power to attract and retain employees, rewards must be unique and unlikely to be offered by competitors.TrueFalse

44.In general, most employees report that the opportunity for higher compensation is a more powerful predictor of turnover than conflict with supervisors.TrueFalse

45.Research has shown that the best performers are least likely to quit when an organization either rewards performance with higher compensation or widely communicates its compensation practices; doing both adds little to these independent effects.TrueFalse

46.Of the factors that influence an employee's desirability of leaving, job satisfaction is the one that cannot be influenced to a significant degree by organizations.TrueFalse

47.Providing employees increased autonomy and requiring them to learn a variety of skills increases stress significantly, which leads to greater turnover rates.TrueFalse

48.One guideline for increasing job satisfaction and retention is to ensure that fairness and justice exist in the workplace.TrueFalse

49.Employee perceptions of injustice are often rooted in misunderstanding or ignorance of company policies that could be resolved with increased communication.TrueFalse

50.Employees may not like a supervisor who speaks in a derogatory way towards them, but evidence suggests they seldom actually turnover as a result of these feelings.TrueFalse

51.Some employees who do not take advantage of work-life balance options resent their coworkers who are more likely to use work-life programs.TrueFalse

52.Evidence suggests that personality dispositions have little or no impact on employee tendencies to turnover.TrueFalse

53.Because employees quit companies, not jobs, internal staffing systems are usually seen as a poor substitute for a job at another company. As such, they do little to reduce intentions to leave.TrueFalse


54.The first strategy for improving employee retention is to _____________.A.redesign employee jobsB.increase payC.improve job satisfactionD.none of the above

55.Guidelines for increasing job satisfaction and retention include ___________.A.establish a lag pay policy for all employeesB.link rewards to retention behaviorsC.keeping core operations information secretD.none of the above

56.Which of the following is an attribute of a high value employee that an organization would want to prevent from leaving?A.low training investmentB.strong KSAOsC.retirementD.low seniority

57.Which of the following is an attribute of a low value employee that an organization would not want to prevent from leaving?A.little intellectual capitalB.high seniorityC.high performanceD.all of the above

58.Research most clearly suggests that when organizations wish to increase retention they need to _____.A.provide team-buildingB.convince employees that there are few alternativesC.offer "bundles" of HR practices that complement one anotherD.demonstrate executive commitment to outreach

59.Which of the following factors leading to turnover cannot usually be addressed by the organization?A.Poor social environment at workB.Low levels of job satisfactionC.Employee shocksD.All of these can be addressed by organizational policy

60.Organizations can use compensation to reduce turnover by _____.A.providing deferred compensationB.giving specific rewards for seniorityC.increasing pay levels to surpass the marketD.all of the above

61.Organizations that link extrinsic rewards to employee performance (i.e. that use incentive compensation plans) find that _____.A.turnover of high performers decreases and turnover of low performers increasesB.turnover is increased across the boardC.turnover is decreased across the boardD.turnover rates are largely unaffected

62.Work-life balance programs are an example of _____.A.communal distributionB.intrinsic rewardsC.instrumentalityD.a completely ineffective retention strategy

63.Research on organizational justice suggests that ____.A.justice only influences turnover in highly industrialized Western countriesB.communication has little impact on employee attitudes or turnover intentionsC.employees are typically well-informed about organizational policiesD.none of the above

64.To increase the cost of leaving, employers ____.A.reduce headcountB.provide deferred compensationC.increase workloadsD.provide free stock to employees

Retention Initiatives: Discharge


65.Performance management systems enable organizations to ensure that an initial person/job match yields an effectively performing employee.TrueFalse

66.One recommendation for an effective performance appraisal or management system is that appraisal criteria should be job-related, specific, and communicated in advance to the employee.TrueFalse

67.Performance management systems are used primarily to detect individuals whose performance is unsatisfactory and should be terminated.TrueFalse

68.Poor task performance is the result of insufficient ability, knowledge, skills, or motivation.TrueFalse

69.In progressive discipline, termination is seen as a viable early option to avoid having to work through a potentially fruitless cycle of improving a low-ability worker.TrueFalse

70.Employee termination is the final step in progressive discipline, and ideally it would never be necessary.TrueFalse


71.As assessment of employee success in reaching goals, ratings of competencies, and suggestions for improvement are all part of _____.A.performance planningB.performance appraisalC.performance executionD.progressive discipline

72.Recommendations for the effective design and use of a performance appraisal or management system include that ____________.A.evaluations should be in writingB.the employee should receive timely feedback about the evaluation and an explanation for any outcome decisionC.there should be agreement among different raters in their evaluation of the employee's performanceD.all of the above

73.______ includes the completion of job tasks that are specifically included in the job description.A.CitizenshipB.Task performanceC.(Low) CounterproductivityD.All of the above

74.Which of the following is not a part of normal progressive discipline?A.Give employees notice of the rules of conductB.Provide employees with alternative employment if performance problems persistC.Allow for full investigation of alleged employee misconductD.Give employees the right to appeal a decision

75.Which of the following is an example of a major employee offense?A.sabotageB.theftC.drug/alcohol abuse at workD.all of the above

76.The typical penalty for a first major offense by an employee is _____________.A.suspension or dischargeB.written reprimandC.verbal reprimandD.none of the above

Retention Initiatives: Downsizing


77.Discharge turnover targets groups of employees and is also known as reduction in force. (RIF).TrueFalse

78.Data shows dramatic decreases in organizational stock price following a downsizing, especially if the downsizing organization restructures assets during downsizing.TrueFalse

79.Research shows that downsizing has negative impacts on employee morale and health, workgroup creativity and communication, and workforce quality.TrueFalse

80.No-layoff policies cannot be implemented effectively by organizations.TrueFalse


81.One problem that has been shown to accompany downsizing is _____.A.increased payroll costsB.decreases in employee health and motivationC.most companies fail to downsize sufficientlyD.insufficient attention to issues of seniority

82.Which of the following is the most commonly pursued alternative to layoffs for reducing staffing levels?A.AttritionB.RetrainingC.Benefits reductionsD.Job sharing

83.In many cases, the post-layoff environment for those who remain is marked by _____.A.reductions in trust of managementB.stress among those who remainC.reductions in workforce qualityD.all of the above

Legal Issues


84.Legal experts usually advise organizations to avoid documenting performance problems because the "paper trail" is likely to just lead to problems in court.TrueFalse


85.From a legal standpoint, if performance appraisal information is to be used in the retention management and termination process for an organization, the organization needs to ensure that the information is _____.A.organizationally relevantB.sufficiently general to cover a variety of situationsC.communicated in advance to the employeeD.all of the above

Chapter 14 Retention Management Answer Key

Turnover and Its Causes


1.There are several positive, functional outcomes of employee turnover.TRUE

2.Avoidable turnover is that which could have been prevented by actions like a pay raise or a new job assignment.TRUE

3.An employee's perceived desirability of movement can depend on reasons that have little or nothing to do with the job.TRUE

4.An employee's overall intention to quit depends on the desirability of leaving, ease of leaving, and alternatives available to the employee.TRUE

5.Employees who have a high intention to quit necessarily end up quitting their jobs.FALSE

6.Desirability of movement is a weak predictor of voluntary employee turnover.FALSE

7.Availability of promotions or transfers may lessen or eliminate any intentions to quit, even though the employee is very dissatisfied with the current job.TRUE

8.Discharge turnover is primarily due to extremely poor person/organization matches.FALSE

9.Downsizing turnover is a reflection of a staffing level mismatch in which the organization actually is, or is projected to be, overstaffed.TRUE

10.Of the three types of employee turnover, discharges are the most prevalent.FALSE


11.The types of employee turnover include ___________.A.voluntaryB.dischargeC.downsizingD.all of the above

12.Discharge turnover is usually due to ___________.A.a site or plant closingB.permanent layoffC.poor employee performanceD.none of the above

13.Turnover due to organizational downsizing is classified as ______.A.voluntaryB.involuntaryC.supplementalD.it depends on the circumstances of the downsizing

14.The desirability of leaving an organization is often an outgrowth of _________.A.poor person/organization matchB.favorable labor market conditionsC.general, transferable KSAOsD.none of the above

15.An employee's intention to leave an organization is influenced by __________.A.perceived desirability of movementB.perceived ease of movementC.alternatives available to the employeeD.all of the above

16.Ease of leaving is greater when ____.A.employees are highly embeddedB.employees possess ample employer-specific KSAOsC.labor markets are looseD.all of the above

17.Downsizing is typically a reflection of __________.A.overstaffingB.understaffingC.an appropriate staffing levelD.none of the above

Analysis of Turnover


18.Data are seldom available regarding when or where employee turnover is occurring in most organizations.FALSE

19.Research suggests that there are differences between the reasons for turnover that employees provide in exit interviews and the reasons employees provide in anonymous surveys.TRUE

20.Because it is typically very easy to collect and analyze job satisfaction data meaningfully, most organizations make this a cornerstone of their retention strategy.FALSE

21.Exit interviews should be conducted by exiting employee's immediate supervisor whenever possible.FALSE

22.The interviewee in an exit interview should be told that the comments that he/she makes will be confidential and that only aggregate results will be used by the organization.TRUE

23.Postexit surveys should ask be mailed quite some time after the employee's last day of work so the individual has sufficient time to reflect on his or her experiences.FALSE

24.Economic costs associated with voluntary turnover include accrued paid time off and temporary coverage.TRUE

25.Material and equipment costs are likely to be the most prevalent in replacement and training costs.TRUE

26.The primary immediate benefit of turnover for employers is hiring inducements.FALSE

27.Compared to discharge turnover, voluntary turnover is usually more costly.FALSE

28.Turnover cost estimates are very precise and accurate in most cases.FALSE

29.Many turnover costs are hidden in the time demands placed on the many employees who must handle the separation, replacement, and training activities.TRUE

30.One potential benefit of employee discharges is the development of improved performance management and disciplinary skills.TRUE

31.Downsizing costs are concentrated in separation costs for permanent reductions in force.TRUE


32.Exit interviews can be used to explain _________ to departing employees.A.rehiring rightsB.benefitsC.confidentiality agreementsD.all of the above

33.Which of the following is a suggestion for conducting an appropriate exit interview?A.The interviewer should be the employee's immediate supervisor.B.There should be an unstructured interview format.C.The interviewer should prepare for each interview by reviewing the interview format and the interviewee's personnel file.D.None of the above

34.Which of the following is a common tool to assess employee reasons for leaving?A.Position analysisB.Job rotationC.Exit interviewD.Discharge notification

35.Economic separation costs associated with voluntary turnover include ________.A.hiring inducementsB.rehiring costsC.manager's timeD.more than one of the above

36.Replacement costs associated with voluntary turnover include __________.A.HR staff induction costsB.mentoringC.severance payD.contagion

37.Which of the following is a potential benefit associated with voluntary employee turnover?A.lowered replacement costsB.savings from not replacing an employeeC.vacancy creates an open job that must be staffedD.all of the above

38.Which of the following makes involuntary turnover potentially more costly than a similar level of voluntary turnover?A.Accrued paid time offB.Possibility of a lawsuitC.Staffing costs for a new hireD.Formal training

39.Economic costs associated with downsizing include ___________.A.threat to harmonious labor-management relationsB.decreased employee moraleC.higher unemployment insurance premiumsD.difficulty in attracting new employees

40.Which of the following is a potential benefit associated with downsizing?A.focus on core businesses, eliminating peripheral onesB.spreading risk by outsourcing activities to other organizationsC.lower payroll and benefit costsD.all of the above

Retention Initiatives: Voluntary Turnover


41.A recent Society for Human Resource Management (SHRM) survey found that the most effective organizational strategy for retaining employees is the provision of concierge services.FALSE

42.Surveys suggest that HR managers believe that a totally different set of factors lead to turnover compared to regular employees.FALSE

43.To have the power to attract and retain employees, rewards must be unique and unlikely to be offered by competitors.TRUE

44.In general, most employees report that the opportunity for higher compensation is a more powerful predictor of turnover than conflict with supervisors.TRUE

45.Research has shown that the best performers are least likely to quit when an organization either rewards performance with higher compensation or widely communicates its compensation practices; doing both adds little to these independent effects.FALSE

46.Of the factors that influence an employee's desirability of leaving, job satisfaction is the one that cannot be influenced to a significant degree by organizations.FALSE

47.Providing employees increased autonomy and requiring them to learn a variety of skills increases stress significantly, which leads to greater turnover rates.FALSE

48.One guideline for increasing job satisfaction and retention is to ensure that fairness and justice exist in the workplace.TRUE

49.Employee perceptions of injustice are often rooted in misunderstanding or ignorance of company policies that could be resolved with increased communication.TRUE

50.Employees may not like a supervisor who speaks in a derogatory way towards them, but evidence suggests they seldom actually turnover as a result of these feelings.FALSE

51.Some employees who do not take advantage of work-life balance options resent their coworkers who are more likely to use work-life programs.TRUE

52.Evidence suggests that personality dispositions have little or no impact on employee tendencies to turnover.FALSE

53.Because employees quit companies, not jobs, internal staffing systems are usually seen as a poor substitute for a job at another company. As such, they do little to reduce intentions to leave.FALSE


54.The first strategy for improving employee retention is to _____________.A.redesign employee jobsB.increase payC.improve job satisfactionD.none of the above

55.Guidelines for increasing job satisfaction and retention include ___________.A.establish a lag pay policy for all employeesB.link rewards to retention behaviorsC.keeping core operations information secretD.none of the above

56.Which of the following is an attribute of a high value employee that an organization would want to prevent from leaving?A.low training investmentB.strong KSAOsC.retirementD.low seniority

57.Which of the following is an attribute of a low value employee that an organization would not want to prevent from leaving?A.little intellectual capitalB.high seniorityC.high performanceD.all of the above

58.Research most clearly suggests that when organizations wish to increase retention they need to _____.A.provide team-buildingB.convince employees that there are few alternativesC.offer "bundles" of HR practices that complement one anotherD.demonstrate executive commitment to outreach

59.Which of the following factors leading to turnover cannot usually be addressed by the organization?A.Poor social environment at workB.Low levels of job satisfactionC.Employee shocksD.All of these can be addressed by organizational policy

60.Organizations can use compensation to reduce turnover by _____.A.providing deferred compensationB.giving specific rewards for seniorityC.increasing pay levels to surpass the marketD.all of the above

61.Organizations that link extrinsic rewards to employee performance (i.e. that use incentive compensation plans) find that _____.A.turnover of high performers decreases and turnover of low performers increasesB.turnover is increased across the boardC.turnover is decreased across the boardD.turnover rates are largely unaffected

62.Work-life balance programs are an example of _____.A.communal distributionB.intrinsic rewardsC.instrumentalityD.a completely ineffective retention strategy

63.Research on organizational justice suggests that ____.A.justice only influences turnover in highly industrialized Western countriesB.communication has little impact on employee attitudes or turnover intentionsC.employees are typically well-informed about organizational policiesD.none of the above

64.To increase the cost of leaving, employers ____.A.reduce headcountB.provide deferred compensationC.increase workloadsD.provide free stock to employees

Retention Initiatives: Discharge


65.Performance management systems enable organizations to ensure that an initial person/job match yields an effectively performing employee.TRUE

66.One recommendation for an effective performance appraisal or management system is that appraisal criteria should be job-related, specific, and communicated in advance to the employee.TRUE

67.Performance management systems are used primarily to detect individuals whose performance is unsatisfactory and should be terminated.FALSE

68.Poor task performance is the result of insufficient ability, knowledge, skills, or motivation.TRUE

69.In progressive discipline, termination is seen as a viable early option to avoid having to work through a potentially fruitless cycle of improving a low-ability worker.FALSE

70.Employee termination is the final step in progressive discipline, and ideally it would never be necessary.TRUE


71.As assessment of employee success in reaching goals, ratings of competencies, and suggestions for improvement are all part of _____.A.performance planningB.performance appraisalC.performance executionD.progressive discipline

72.Recommendations for the effective design and use of a performance appraisal or management system include that ____________.A.evaluations should be in writingB.the employee should receive timely feedback about the evaluation and an explanation for any outcome decisionC.there should be agreement among different raters in their evaluation of the employee's performanceD.all of the above

73.______ includes the completion of job tasks that are specifically included in the job description.A.CitizenshipB.Task performanceC.(Low) CounterproductivityD.All of the above

74.Which of the following is not a part of normal progressive discipline?A.Give employees notice of the rules of conductB.Provide employees with alternative employment if performance problems persistC.Allow for full investigation of alleged employee misconductD.Give employees the right to appeal a decision

75.Which of the following is an example of a major employee offense?A.sabotageB.theftC.drug/alcohol abuse at workD.all of the above

76.The typical penalty for a first major offense by an employee is _____________.A.suspension or dischargeB.written reprimandC.verbal reprimandD.none of the above

Retention Initiatives: Downsizing


77.Discharge turnover targets groups of employees and is also known as reduction in force. (RIF).FALSE

78.Data shows dramatic decreases in organizational stock price following a downsizing, especially if the downsizing organization restructures assets during downsizing.FALSE

79.Research shows that downsizing has negative impacts on employee morale and health, workgroup creativity and communication, and workforce quality.TRUE

80.No-layoff policies cannot be implemented effectively by organizations.FALSE


81.One problem that has been shown to accompany downsizing is _____.A.increased payroll costsB.decreases in employee health and motivationC.most companies fail to downsize sufficientlyD.insufficient attention to issues of seniority

82.Which of the following is the most commonly pursued alternative to layoffs for reducing staffing levels?A.AttritionB.RetrainingC.Benefits reductionsD.Job sharing

83.In many cases, the post-layoff environment for those who remain is marked by _____.A.reductions in trust of managementB.stress among those who remainC.reductions in workforce qualityD.all of the above

Legal Issues


84.Legal experts usually advise organizations to avoid documenting performance problems because the "paper trail" is likely to just lead to problems in court.FALSE


85.From a legal standpoint, if performance appraisal information is to be used in the retention management and termination process for an organization, the organization needs to ensure that the information is _____.A.organizationally relevantB.sufficiently general to cover a variety of situationsC.communicated in advance to the employeeD.all of the above

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chap 014

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