DECA Human Resources Management Practice Exam

What is Downsizing primarily associated with?

1. An increase in employee hiring

2. The reduction of employees in an organization

3. Improvement of employee morale

4. The expansion of company facilities

The correct answer is: The reduction of employees in an organization

Downsizing is primarily associated with the reduction of employees in an organization. This process typically occurs when a company seeks to improve efficiency, reduce costs, or respond to market changes, leading to the need for a smaller workforce. Downsizing may happen through layoffs, restructuring, or even early retirement offers, allowing the organization to streamline operations and, in some cases, enhance profitability. While hiring increases, improvement of employee morale, and expansion of facilities can be positive outcomes for a company under normal circumstances, they do not align with the primary focus of downsizing. In fact, downsizing can often lead to decreased employee morale due to the uncertainty and stress it creates among remaining staff. Similarly, downsizing usually represents a contraction of the workforce rather than hiring or expansion.