ACCA Strategic Professional · Strategic Business Leader · Enabling success: talent management
Orion Services plans to downsize by 15% and proposes to select staff for redundancy mainly on the basis of age and length of service, retaining younger lower-paid employees. Which assessment of the proposal is most appropriate for a professional accountant advising the board?
The proposal is problematic because selecting people for redundancy by age is likely discriminatory and unethical, exposing Orion to legal and reputational risk. The board should use objective, job-related selection criteria and fair consultation instead, even when cost reduction is the goal.
- AAcceptable, because cost reduction is the board's overriding duty
- BAcceptable provided the selection is not communicated to staff
- CProblematic, because age-based selection is likely to be discriminatory and unethical; objective, job-related criteria and fair consultation should be usedCorrect
- DAppropriate only if the affected employees are offered a share option
Explanation
Selecting on age is discriminatory in many jurisdictions and breaches fair-treatment principles, creating legal, reputational and morale risks. Fair practice uses objective, job-related criteria and consultation. Secrecy or compensation does not remove the ethical and legal problem, and cost reduction does not override fairness.
Did you get it right without looking?
One question tells you little. A timed set on Enabling success: talent management shows your real accuracy, how long you take and where you lose marks.
More Enabling success: talent management questions
- Marlow Retail's supplier audit reveals that a contractor supplying its warehouse staff pays below the legal minimum wage and requires excess…
- Brightwell Services spends heavily on training but finds that skills gaps persist because courses are chosen ad hoc. Which first step in the…
- Tamsin Retail's analysis shows that in three years it will have a surplus of in-store cashiers because of self-checkout technology, but a sh…
- Karvon Retail has high labour turnover among new store assistants, with 40% leaving within six months. Exit interviews suggest the job descr…
- Brightwell Hospital's nurses accept that their pay is competitive, but learn that nurses at a neighbouring hospital doing the same grade of …
- Brelmont Bank has a shortage of data scientists. Its HR plan shows internal supply will cover only 30% of the need within 18 months, and the…