Final answer:
Lenny's action of firing under-performing employees to cut costs is an example of layoffs, a common practice in workforce management during difficult business conditions to avoid adverse selection effects of wage cuts.
Step-by-step explanation:
Lenny's decision to fire all the under-performing employees in his store is an example of layoffs as a cost-cutting measure. This action can be seen as part of workforce management, especially during poor business conditions where a company may need to reduce its expenses. Some companies may alternatively choose to reduce wages across the board, but this can lead to adverse selection, where the more talented employees with better options elsewhere are likely to leave, potentially leaving the company with the less capable employees. Layoffs target specific individuals, which may be underperforming employees in this case, over a broad wage cut.