6-1 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Managing Employee Separations, Downsizing, and Outplacement Chapter 6

6-2 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Employee Separations  What are they?  Types of employee separations  Managing Early Retirement  Managing Layoffs  Outplacement Chapter 6 Overview

6-3 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Employee separations—termination of an employee’s membership in an organization  Turnover rate—rate of employee separations in an organization What Are Employee Separations?

6-4 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Costs of Employee Separations

6-5 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Reduced labor costs  Replacement of poor performers  Increased innovation  Opportunity for greater diversity Benefits of Employee Separations

6-6 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Voluntary separation —the employee ends the relationship with the employer  Avoidable vs. Unavoidable  Quits  Retirements Types of Employee Separations  Involuntary separation — the employer terminates the employment relationship  Discharges  Layoffs, downsizing, and rightsizing

6-7 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Can substantially reduce size of workforce  Must be managed Managing Early Retirements  Features of early retirement policies:  Financial incentives package  Open window

6-8 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Possible problems with early retirements:  Too many employees accept retirement offer  Wrong employees may leave  Employees may feel they are being forced out Managing Early Retirements  Management:  Can ask how employees would respond to early retirement offer  Should treat senior employees like all others

6-9 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Managing Layoffs

6-10 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Attrition  Hiring freeze  Not renewing contract workers  Encourage voluntary time off  Redesign jobs  Transfers and Relocations  Job sharing  Freeze or cut pay  Retrain workers Alternatives to Layoffs

6-11 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Implementing a Layoff  Notifying employees  Worker Adjustment and Retraining Notification Act (WARN)—60 days notice  Developing Layoff Criteria  Seniority vs. Employee Performance  Communicating to laid-off employees  Face-to-face discussion  Middle of the week

6-12 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Coordinating media relations  Rumors can be very damaging Implementing a Layoff  Maintaining security  Some employees need to be escorted out  Reassuring survivors of the layoffs  Minimize survivor anxiety  Listen to survivors’ concerns  Create upbeat, energetic climate  Show employees you appreciate their work

6-13 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Program for separated employees  Emotional support  Job search assistance Outplacement  Three goals:  Reducing the morale problems  Minimize litigation initiated by separated employees  Assist separated employees in finding comparable jobs as quickly as possible

6-14 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall  Separations have both costs and benefits  Separations—voluntarily or involuntarily  Consider voluntary early retirement as alternative to layoffs  Layoffs should be a last resort  Use other cost cutting measures first  Outplacement services can help separated employees Summary and Conclusions