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SEPARATION

HUMAN RESOURCE MANAGEMENT

INTRODUCTION
• With a stalled economy , a depressed technology and the continuing economic fallout resulting from the terrorist attacks and not much demand for the products & services. • To lower the expenses , managers are turning more often to firing employees (also called terminating , downsizing , rightsizing or getting a pink slip).

.CONCEPT OF EMPLOYEE SEPARATION • Employee Separation is one of the very important and crucial function / process of HR Department. Separation occurs when an employee leaves the organization. This process. can lead to various legal complications . • An employee works for an employer and gets paid for his work and nothing else. if not handled in an efficient manner.

2) Termination – Employer decides to break the contract of employment. in normal scenarios the separation between employer and employee can be due to any of the following three 1) Resignation – Employee decides to leave the organization. 3) Absconding – When the employee decides to leave the organization without tendering his resignation or following the proper process of separation. .CONCEPT OF EMPLOYEE SEPARATION • Broadly speaking.

TYPES OF SEPARATION • Voluntary and Involuntary Separation Voluntary  QUITS  RETIREMENTS Involuntary  DISCHARGES  LAYOFFS  RETRENCHMENT  VOLUNTARY RETIREMENT SCHEME  RIGHTSIZING .

health . advancement opportunities . • The reasons for dissatisfaction may be because of the job itself or because of job extrinsic factors as supervision . compensation . .QUITS • Voluntary separations occur when the employee decides to terminate his or her relationship with the organization. spouse relocation and the like. company policy . • A employee decides to quit when his or her level of dissatisfaction with the present job is high or more attractive alternative job is awaiting the individual.

is 60 . its likely to raise because of shortage of skilled work force . he or she carries several benefits with himself or herself. • When the employee superannuates and leave the organization . . In some states it is 58 years and in central Govt.RETIREMENTS • Retirements occur when employees reach the end of their careers .. The age of superannuation differs .

and rightsizing are the common methods of employer sponsored separations . Employers resort to terminate employment contract with employees for at least three reasons Organization is passing through lean period and is unable to maintain the existing labour. VRS . Layoffs . Initial faulty hiring resulting in mismatch between job and employee fit .Involuntary Separations • 1. 3. 2. Discharges . and Employee exhibits deviant behavior violating the policy .

Any termination is a reflection on the company‟s HR system. termination is expensive as the firm seek replacement . • Discharge also called termination. • Discharged individual is likely to badmouth about the company.DISCHARGE • A Discharge takes place when the employer discovers that it is no more desirable to keep an employee any longer. hire and train the new employee . should be avoided as far as possible . • In addition . • Discharge needs to be viewed as a last resort. .

• also called redundancy .LAYOFFS/REDUNDANCY • A layoff is a temporary separation of the employee . as section 2 of the industrial disputes act . • A layoff may be for a definite period on the expiry of which the employee will be recalled by the employer for duty. refusal or inability of an employer to give employment to a worker whose name is present on the rolls but who has not been retrenched. 1947 defines layoff as the failure .

. 2. During layoff employee get half of the normal wages . raw materials Accumulation of stocks Break down of machinery For any other reason.LAYOFFS • 1. 3. 4. A lay-off may be one of the reasons Shortage of coal .

. • In Retrenchment the employee is sent home and is or her connections with the company is withdrawn.RETRENCHMENT • It refers to the termination of the services of employees because of the replacement of labour by machines or the closure of a department due to continuing lack of demand for the products manufactured in that particular department of the organization .

companies both in public sector and private sector have been sending home surplus labour for good by a novel scheme called VRS. also called Golden Hand Shake Plan.VOLUNTARY RETIREMENT SCHEME (VRS) • Voluntary retirement scheme is yet another type of separation . VRS is resorted to where organizations have surplus labour. • VRS also results in separation of employee from employer . .

. • In reality .RIGHTSIZING • Rightsizing theoretically means reducing the size of workforce or increasing it to maintain the employee strength at the most desired level. rightsizing means DOWNSIZING the employee strength through planned elimination of jobs.

• Downsizing is being regarded by management as one of the preferred routes to turning around declining organizations. . cutting costs. most often as a cost-cutting measure. and improving organizational performance.DOWNSIZING • Downsizing is the „conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness’.

. • When the market is tight. • Downsizing is a commonly used euphemism (unpleasant )which refers to reducing the overall size and operating costs of a company. including both business and humanity . as companies fight to survive in a hostile climate while competing with other companies in the same sector.DOWNSIZING • Downsizing is extremely difficult. It taxes all of a management team's resources. most directly through a reduction in the total number of employees. downsizing is extremely common.

a company may be able to replace assembly line employees with machines which will be quicker and less prone to error. a company may decide to shut down an entire division. for example.DOWNSIZING • There are several reasons to engage in downsizing. might decide to stop making Maruti 800 . The primary reason is to make the daily operations of a business more efficient. For example. thus cutting an entire department. downsizing increases profits by reducing the overall overheads of a business. • In addition. . a car company. In other instances.

EMPLOYEE TURNOVER • Employee turnover is a ratio comparison of the number of employees a company must replace in a given time period to the average number of total employees. for which the employee turnover rate is highest. • Employee turnover is a costly expense especially in lower paying job roles. .

human resource costs. and customer retention . • All of which can add up to anywhere from 30 to 200 percent of a single employee's annual wages or salary. These expenses include the cost of advertising. depending on the industry and the job role being filled. loss of productivity. . the company incurs direct and indirect expenses. and job performance are all factors that play a significant role in employee turnover. headhunting fees. company benefits. new hire training. • When a company must replace a worker. • Companies take a deep interest in their employee turnover rate because it is a costly part of doing business.EMPLOYEE TURNOVER • Wages.

MANAGING SEPARATIONS • Separations of whatever the type. . Cost of turnover include retirement costs and hiring and training costs. may add to the cost . • But on the negative side disrupts employee morale and instead of causing to the reduction in cost . there is a saving in the wage and salary bill . and new entrants . organization become trimmer and leaner. hired to fill the vacant jobs bring new ideas and experience along with them .

MANAGING SEPARATIONS • The strategy for managing separations involves retaining high performers through innovative reward schemes. . while engaging in human resource planning to ensure that as few employees as possible that will make them difficult to replace.

bonus or awards are presented or paid in order to receive the compensation .TERMINATION POLICIES & PRACTICES • Voluntary Termination Temporary Employees who voluntarily resign are expected to give a minimum of one month notice and to submit a letter of resignation to their supervisors or department heads specifying the reason for resignation and the last day of work. . If a terminating employment is eligible for any incentive compensation . bonus and /or awards . bonus or award. they must actively employed on the date of compensation .

. These include.INVOLUNTARY TERMINATION • • • • • • • • • • • • • • There are several situations that can result in involuntary termination. but are not limited to Unsatisfactory job performance Misconduct Refusal or reluctance to do tasks which are within job description Frequent Tardiness (slow) Frequent absences Improper use of work privileges for personal gain Insubordination Falsification of timecards/sheets Being at work under the influence of illegal substances Theft Sexually or racially harassing a co-worker or client Violating the University Professional Standards and Business Conduct Policy or the Code of Student Conduct Violating standards of conduct or behavior set by department/supervisor .

“Separation” means cessation (stopping) of service agreement with the organization for one or other reason. .

THANK YOU ALL FOR CO-OPERATION .