Unit-8

De-recruitment / Separation
By Prof. Stuti Jain
Symbiosis Law School, Noida
Meaning- Separation
According to Yoder, separation is a negative
recruitment. It may be In the form of resignation,
dismissal or discharge, suspension, retrenchment or
lay-off.
Meaning- Separation
Separation is a situation when the service agreement of
an employee with his/her organisation comes to an end
and employee leaves the organization.

In other words, separation is a decision that the

individual and organisation part from each other.

Employee separation is the process of efficiently and

fairly terminating workers .

Separation means cessation of service or agreement

with the organization for one or other reason.
Types of Separation

EMPLOYEES
SEPARATION

Voluntary Involuntary

Quits Retirements Discharges Layoffs Retrenchment VRS Rightsizing

Benefits of separation
Reduced labor costs
Replacements of poor performances
Increased innovation
The opportunity for greater diversity
Reasons for Separation of Employees
 Voluntary Separation Voluntary separation, which normally begins after a request is placed in this
regard by the employee, can happen due to two reasons: professional reason and personal reason.

 Professional reasons Employees may seek separation when they decide to seek better positions,
responsibilities and status outside the present organization.

 Health problems Major health problems crippling the employees may make them invalid or unfit to
continue in the profession.

 Personal reasons The important personal reasons for voluntary separation are relocation for family
reasons like marriage of the employees and health crisis of family members, maternity and child-
rearing.

 Behavioural problems An employee's objectionable and unruly behaviour within the organization
may also lead to his involuntary separation from the organization.

 Organizational problems The poor financial performance of an organization may cause it to

terminate the services of some of its employees as part of cost control measure.
TYPES OF EMPLOYEE SEPARATION
Involuntary separations-It occurs when an employer
decides to terminate its relationship with an employee
due to-
 Economic necessity
 A poor fit between the employee and the organization

 Voluntary separations- A separation that occurs

when an employee decides, for personal or
professional reasons to end the relationship with the
employer.
VOLUNTARY SEPARATIONS

There are two types of voluntary separations-

Quits
Retirements
INVOLUNTARY SEPARATIONS
There are 5 types of involuntary separations
Retirement
Discharge
Layoff
Retrenchment
Rightsizing
RETIREMENT
Retirement is the point where a person stops
employment completely.
A person may also semi-retire by reducing work hours.

For example, at present the superannuation age for the

teachers working in the Central Universities is 62 years
and in case of some state government employees, it is 58
years.
Some people characterize retirement as ‘role less role’.
FACTOR AFFECTING RETIREMENT
Attachment to
Financial
Health status and conditions
circumstances
at work

Caring and
Work-life
unpaid work Policy context
balance
responsibilities

Labor market
demand
TYPES OF RETIREMENT
Retirement on Superannuation
 Voluntary Retirement
 Compulsory Retirement as a measure of punishment
Compulsory Retirement due to Administrative Reason
Death While in Service
 Retirement due to invalidation on Medical Ground
RIGHTSIZING
The process of a corporation reorganizing or
restructuring their business by cost-cutting, reduction
of workforce, or reorganizing upper-level
management.
The goal is to get the company molded properly to
achieve the maximum profit.
The term rightsizing is often used by companies
instead of downsizing because it sounds less drastic.
RETRENCHMENT
Retrenchment means permanent termination of an
employee’s services for economic reasons.
Retrenchment occurs on account of surplus staff, poor
demand for products, general economic slowdown,
etc.
It is important to note that termination of services on
account of retirement, winding up of a business,
illness or on disciplinary grounds does not constitute
retrenchment.
RETRENCHMENT
Retrenchment is mainly seen in plantations, agricultural services,
forestry and logging, food products, manufacture of machinery and
cotton textile. The reasons pointed out behind retrenchment were
mainly financial stringency and lack of demand for their products.
The Industrial Disputes Act, 1947 makes it obligatory for
organisations employing 100 or more employees to give three months’
notice to the employee to be retrenched and also seek prior approval
of the Government.
In other organisations, employee must be served one month’s prior
notice in writing indicating the reasons for retrenchment. He/she
should be paid compensation equal to 15 days’ wages for every
completed year of service. As and when there is need for employing
people in future, the retrenched employee must be given preference.
DISMISSAL
Dismissal is where the employer chooses to require the employee to
leave, generally for a reason which is the fault of the employee.
Dismissal is termination of service of an employee as a punitive measure.
Reasons for Dismissal-
A. unsatisfactory performance or misconduct.
B. Persistent failure on the part of employee to perform up to the
expectations
C. specified standard is considered as unsatisfactory performance
D. Wilful violation of rules and regulation by the employee is treated as
misconduct

Before an employee is dismissed, he must be served advance notice to

explain his position. The reasons for dismissal must be clearly made
known to the employee.
LAYOFF
 Layoff implies denial of employment to the employees
for reasons beyond the control of employer.
 Breakdown of machinery, seasonal fluctuations in
demand, shortage of power, raw materials, etc. are the
examples of reasons leading to layoff.
 According to Section 2 (KKK) of the Industrial Disputes
Act, 1947, lay off is defined as “the failure, refusal or
inability of an employer, on account of shortage of coal,
power or raw materials or accumulation of stocks or
breakdown of machinery or by any other reason, to give
employment to a workman whose name appears on the
muster rolls of his industrial establishment and who has
not been retrenched”.
IMPACT OF LAYOFF
Effects the morale of remaining employees
Regions economic vitality
Entire community suffers
Investors are affected
Company’s image
Difficult to attract & recruit highly skilled employees
Golden handshake/VRS
WHAT IS VRS?
VRS is a scheme whereby the employee is offered to
voluntarily retire from his services before his
retirement date.
Subject to certain conditions the company offers VRS
to its employees . It is the golden route to cut the
excess flab.
 Golden handshake/VRS
The most humane technique to retrench the
employees in the company today is the voluntary
retirement scheme.
It is the golden handshake for the employees and the
only option today for the companies to reduce
organization staff.
The scheme which is formally permitted by the
Department of Public Enterprises and which provides
the lucrative way for the employees to terminate their
services and accept VRS.
 Golden handshake/VRS
As the name suggests the VRS is strictly voluntary i.e.
one can neither compel the workers to accept it nor
apply it selectively to certain individuals.
One can however choose the levels, units and age
groups among whom one wants to offer VRS.
The company can always accept or reject the
application for the VRS.
 Golden handshake/VRS
Employers refer to VRS as 'golden handshake', trade
unions call it 'voluntary retrenchment scheme', and for
the government, it is 'unstated exit policy' which
means that an exit policy which may not exist on
paper.
VRS is one of the strategies introduced in the early
1980s in central public sector undertakings (PSUs) to
reduce the extra workforce.
Technicalities in VRS
 The Voluntary Retirement Scheme is a legal way to
down size and thus it involves certain technicalities.
The VRS candidates must have worked for the
organization for minimum of 10 years and also the age of
the worker must be minimum of 40.
Employees not complying with these conditions still can
apply for the early separation but it would not be
counted as the VRS legally. Thus these employees won't
be able to avail the benefit of tax exemption.
 The employees receiving VRS can get the tax exemption
for the amount of Rs. 5 lacs lumpsum.
Technicalities-VRS
The Voluntary Retirement Scheme is given tax
exemption as per the following limits:
Least of following :
1. Last drawn salary × 3 × completed yrs. Of services or
Last drawn salary × remaining month of service
which ever is higher
2. Rs. 5,00,000
3. Actual compensation received
 Technicalities-VRS
Employees not complying with these conditions still
can apply for the early separation but it would not be
counted as the VRS legally.
Thus these employees won't be able to avail the benefit
of tax exemption. The employees receiving VRS can
get the tax exemption for the amount of Rs. 5 lacs
lumpsum.
Anyone receiving more than Rs. 5 lacs would be
charged under Income Tax Act
BENEFITS- VRS
The normal benefits that an employee gets:
 Provident fund
 Encashed accumulated leave
 Gratuity
 Salary for the notice period
 Cost of transfer to the hometown
ExitInterviews

 An Exit Interview is a powerful tool that allows

organizations to gain an understanding as to why
people leave .
 Exit Interviews capture ideas for improvement while
promoting positive interaction with departing
employees.
 Analysis of results and related statistical reports
created from exit interviews provide opportunities for
the organization to develop actions that can encourage
reduction in turnover rates, improve employee morale,
and encourage a possible future return.
Goals- Exit Interview
• Discover the employees reason for leaving.
• Give positive attention to the departing employees in
order to alleviate possible frustrations and/or negative
attitude toward the organization.
• Allow departing employees to have a voice about what
their work experience was like.
• Receive valuable feedback from departing employees
about compensation, working conditions, management,
and the culture of the organization.
Goals- Exit Interview
 Explore areas of the departing employee’s most serious
concerns, and record details of what they enjoyed
most
 Departing employees have an opportunity to transfer
knowledge and experience to a successor or
replacement; may also brief a team on current
projects, issues and contacts
 Chance for departing employees to give constructive
feedback, and to leave on a positive note, with good
relations and mutual respect
Goals- Exit Interview
Confidentiality-
It should be made clear to the departing employee that
the information provided through the exit interview will
be confidential. Such information will be used in
summary format and shared with supervisors and other
need-to-know individuals in order to address retention
issues, employee morale, and alleged allegations of
illegal practices.
Types of Exit Interview

• Face-to-face, over the

• Telephone
• Using a written questionnaire
• Via the Internet
• In a knowledge-focused exit interview, a face to-face
interview is needed.
Exit Interview Participants

 Employees with a temporary contract, terminated

employees, and employees who are retiring will also be
afforded this opportunity.
 The exit interview is voluntary.
 Preference is for the interview to be conducted by the
HR Manager or designee.
 The departing employee should feel that the
information they are sharing will be received in an
unbiased fashion, and be fairly represented.
Procedure- Exit Interview

 HR receives notice of an employment termination

through the personnel ticket system, submitted by the
supervisor.
 Supervisor should ask employee to choose a method in
which they would like to complete the Exit Interview
(online (preferred), paper copy, phone, face to face or
decline exit interview).
 Within the first week of receiving this notice, and
before the employee’s last day, HR will contact the
employee to arrange for the survey to be completed.
Exit Interview Questionnaire
• Name:
• Gender:
• Nationality:
• Position:
• Level:
• Type of contract:
• Start and Finish Date:

Cont.
Exit Interview

What are you going to do?

• If employment, who will be your new employer?
• If employment, what sort of job and at what level?
• If employment, what attracted you to your new job?
• If employment, how will your new job differ from your
current one?

Cont.
About the Unit- Exit Interview

• Do you feel the description of your job in the

engagement process was accurate?
• Were the purpose and expected results of your
position clear throughout your work in the unit?
• Could your qualifications, experience, and skills have
been used to better advantage?
• Do you feel you received appropriate support to enable
you to do your job?
• Was the training you received in the unit adequate to
enable you to accomplish your job? Cont.
About the Unit- Exit Interview
Are there further training opportunities you think the
unit should be offering? • What did you see as your
promotion and career prospects in the unit? • How
might those prospects have been improved? • How was
your working environment generally? • Can you list the
three most important things that should be done to
make the unit more effective in terms of influencing
decisions in the organization? • Signed:
Date:

Cont.
Conclusion- Exit Interview

• It helps the org. to identify threats into org. regarding

Human Resource.
• It gives statistical data.
• It helps to minimize the wrong perception.
THANK YOU