Managing Employee Separations, Downsizing and Outplacement
Published byModified over 5 years ago
Presentation on theme: "Managing Employee Separations, Downsizing and Outplacement"— Presentation transcript:
1 Managing Employee Separations, Downsizing and Outplacement CHAPTER SIXManaging Employee Separations, Downsizing and Outplacement
2 Chapter Objectives Review Key Terms Identify the costs and benefits associated with employee separationsUnderstand the differences between voluntary and involuntary separationsAvoid problems in the design of early retirement policiesDesign HRM policies for downsizing that are alternatives to layoffs and develop a layoff program that is effective and fairReview Key TermsAttritionEmployee separationsExit interviewsHiring freezeInvoluntary separationOutplace assistanceTurnover rateVoluntary separation
3 Key Terms Employee separations Turnover rate The termination of an employee’s membership in an organization.Turnover rateThe rate of employee separations in an organization.
4 Costs of Employee Separations The costs of employee separationsRecruitment costsSelection costsTraining costsSeparation costsSeverance payExit interviewsOutplace assistance
5 Benefits of Employee Separations The benefits of employee separationsReduced labor costsReplacement of poor performersIncreased innovationOpportunity for greater diversity
6 Types of Employee Separation Voluntary separationA separation that occurs when an employee decides, for personal or professional reasons, to end the relationship with the employer.QuitsRetirements
7 Types of Employee Separation Involuntary separationA separation that occurs when an employer decides to terminate its relationship with an employee due to a poor fit between the employee and the organization or economic necessityDischargesOccur when a firm decides there is a poor ‘fit’ between an employee and a the organizationLayoffs - downsizing and rightsizingDownsizingStrategy by a company to reduce scale and scope of its business to improve its financial performanceRightsizingReorganization of a company’s employees to improve efficiency
8 Alternatives to Layoffs – Early Retirement Features of early retirement policiesPackage of financial incentives that make it attractive for senior employees to retire earlier than they had planed‘Open window’ that restricts eligibility to a fairly short period of timeAvoiding problems with early retirementsA longtime employee who has performed satisfactorily over many years suddenly receives an unsatisfactory performance evaluationA manager indicates that senior employees who do not take early retirement may lose their jobs anyway because a layoff is likely in the near futureSenior 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
9 Alternatives to Layoffs – Employment Policies AttritionAn employment policy designed to reduce the company’s workforce by not refilling job vacancies that are created by turnover.Hiring freezeAn employment policy designed to reduce the company’s workforce by not hiring any new employees into the company.
10 Alternatives to Layoffs Changes in Job DesignReallocation and relocationBumpingJob SharingPay and Benefit PoliciesPay freezesCut overtimeUse vacation time and leave daysPay cutsRetraining
11 Implementing a layoff Notifying employees Layoff The elimination of jobs, often without regard to employee performance, usually when a company is experiencing financial difficulties. Also may occur if a company is changing its corporate strategies.Notifying employeesWorker Adjustment and Retraining Notification Act of 1988 (WARN)
12 Worker Adjustment and Retraining Notification Act of 1988 (WARN) Employment losses covered by the law:Terminations other than discharges for cause, voluntary departures, or retirementLayoffs exceeding six monthsReductions of more than 50% in employee’s work hours during each month of any six-month period.Penalty for failing to give noticeOne day’s pay and benefits to each employee for each day’s notice that should have been given, up to 60 days.
13 Worker Adjustment and Retraining Notification Act of 1988 (WARN) Requires employers of 100 or more employees to give 60 days’ notice before closing a facility or starting a layoff of 50 people or more.The law does not prevent the employer from closing down, nor does it require saving jobs.The law is intended to give employees time to seek other work or retraining by giving them advance notice of the shutdown.
14 Implementing a Layoff Implementing a Layoff Develop layoff criteria Seniority vs. PerformanceCommunicating to laid-off employeesCoordinating media relationsMaintaining securityReassuring survivors of the layoffsSurvivor AnxietyMore workUnsettling changesSelf assessment of contributionsGuilt
15 Outplacement The Goals of Outplacement - Reducing the morale problems of employees who are about to be laid offMinimizing the amount of litigation initiated by separated employeesAssisting separated employees in finding comparable jobs as quickly as possible