LESSON 8

EMPLOYEE SEPARATION AND RETENTION

1. Differentiate involuntary and voluntary turnover.

The company’s main goal in employee separation and retention is to make the operations
effective in making the customer satisfied with the quality of work. The company should
terminate the contract with the employees who do not contribute to the effectiveness of operation
and maintain the employees that have the potential to help in growing the company and those
employees that have an important role in the operations. There are two policies regarding
contracts that the company could adopt: (1) Employment-at-will that the employees have the
freedom to terminate their own contract with the company and (2) Due Process policies where
the employees will go on a due process to terminate their contract. These policies have a great
effect on the company’s involuntary and voluntary turnover.

Involuntary turnover is when the company terminates the contract of the employee. It might
be when the company is in an economic downturn that the company needs to cut costs in the
employment in order to survive that resulting in a retrenchment and it is out of the control of the
company. Another cause of involuntary turnover is when the employee affects the effectiveness
of the operation of the company. This is a punishment to the employee that gives inconvenience
to the customers. However, the company should consider the legal aspect of firing the employees
to avoid legal cases due to disregarding the labor code of the country.

On the other hand, voluntary turnover is the complete opposite of involuntary turnover. It is
when the employee terminates their own contract with the company. It is commonly due to the
change of career path of the employee; the company does not provide enough benefit to the
employees; or they do not like the working environment of the company. Mostly this turnover is
due to the employment-at-will policies in the contract of the company. This is out of the control
of the company and the decision is solely coming from the employee. However, in the due
process policies, the company has the say in the termination of the contract of the employee
because they will go through the due process but the company should not be harsh with the due
process and follow the labor code of the country.