(c) 2007 by Prentice Hall6-1 Managing Employee Separations, Downsizing, and Outplacement Managing Employee Separations, Downsizing, and Outplacement Chapter 6

(c) 2007 by Prentice Hall6-2 Identify the costs and benefits associated with employee separations Understand the differences between voluntary and involuntary separations Avoid problems in the design of early retirement policies Design HRM policies for downsizing that are alternatives to layoffs and develop a layoff program that is effective and fair Chapter 6 Overview

(c) 2007 by Prentice Hall6-3 Employee separations – The termination of an employee’s membership in an organization. Turnover rate – The rate of employee separations in an organization. What Are Employee Separations?

(c) 2007 by Prentice Hall6-4 The costs of employee separationsThe costs of employee separations –Recruitment costs –Selection costs –Training costs –Separation costs What Are Employee Separations?

(c) 2007 by Prentice Hall6-5 What Are Employee Separations?

(c) 2007 by Prentice Hall6-6 The benefits of employee separations Reduced labor costsReduced labor costs Replacement of poor performersReplacement of poor performers Increased innovationIncreased innovation Opportunity for greater diversityOpportunity for greater diversity What Are Employee Separations?

(c) 2007 by Prentice Hall6-7 Voluntary separation – A separation that occurs when an employee decides, for personal or professional reasons, to end the relationship with the employer.Voluntary separation – A separation that occurs when an employee decides, for personal or professional reasons, to end the relationship with the employer. –Quits –Retirements Types of Employee Separations

(c) 2007 by Prentice Hall6-8 Involuntary separation – A separation that occurs when an employer decides to terminate its relationship with an employee due to (1) economic necessity or (2) a poor fit between the employee and the organization.Involuntary separation – A separation that occurs when an employer decides to terminate its relationship with an employee due to (1) economic necessity or (2) a poor fit between the employee and the organization. –Discharges –Layoffs, downsizing, and rightsizing Types of Employee Separations

(c) 2007 by Prentice Hall6-9 The features of early retirement policiesThe features of early retirement policies Avoiding problems with early retirementsAvoiding problems with early retirements –A longtime employee who has performed satisfactorily over many years suddenly receives an unsatisfactory performance evaluation –A manager indicates that senior employees who do not take early retirement may lose their jobs anyway because a layoff is likely in the near future –Senior employees notice that their most recent pay raises are quite a bit lower than those of other, younger workers who are not eligible for early retirement Managing Early Retirements

(c) 2007 by Prentice Hall6-10 Managing Early Retirements

(c) 2007 by Prentice Hall6-11 Alternatives to Layoffs – Employment Policies Attrition – An employment policy designed to reduce the company’s workforce by not refilling job vacancies that are created by turnover.Attrition – An employment policy designed to reduce the company’s workforce by not refilling job vacancies that are created by turnover. Hiring freeze – An employment policy designed to reduce the company’s workforce by not hiring any new employees into the company.Hiring freeze – An employment policy designed to reduce the company’s workforce by not hiring any new employees into the company. Managing Layoffs

(c) 2007 by Prentice Hall6-12 Managing Layoffs Implementing a layoff Notifying employees Worker Adjustment and Retraining Notification Act – (WARN)

(c) 2007 by Prentice Hall6-13 Implementing a Layoff – continued Develop layoff criteria Communicating to laid-off employees Coordinating media relations Maintaining security Reassuring survivors of the layoffs Managing Layoffs

(c) 2007 by Prentice Hall6-14 The Goals of Outplacement - 1.Reducing the morale problems of employees who are about to be laid off 2.Minimizing the amount of litigation initiated by separated employees 3.Assisting separated employees in finding comparable jobs as quickly as possible Outplacement

(c) 2007 by Prentice Hall6-15 Outplacement Outplacement Services Emotional Support Job-search Assistance

(c) 2007 by Prentice Hall6-16 What are employee separations?What are employee separations? Types of employee separationsTypes of employee separations Managing early retirementsManaging early retirements Managing layoffsManaging layoffs OutplacementOutplacement Summary and Conclusions