Chapter 6

Managing Employee Separations,

Downsizing, and Outplacement

6-1
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Chapter Challenges
1. Understand employee separations
2. Gain mastery in identifying types of
employee separations
3. Have familiarity with managing early
retirements

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Chapter Challenges
4. Learn practices for managing layoffs
5. Recognize the role of outplacement

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What Are Employee
Separations?
Employee Separation
Employee ceases to be a member of the
organization

Turnover Rate
Measure of the rate at which employees leave
the organization

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Costs of Employee
Separations

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Benefits of Employee
Separation
Reduced Labor Costs

Replacement of Poor Performers

Increased Innovation

Opportunity for Diversity

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Types of Employee
Separation
Voluntary
Quits
Retirements

Involuntary
Discharges
Layoffs

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 Managing Early
Retirement
• Financial Package Incentives
• Short Eligibility Window
• Reduce the Size of the Organization
• Must Be Managed Carefully

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Avoiding Problems with
Early Retirement
Too many employees take retirement option

Desired employees may leave

Perception of forced leave

Age discrimination complaints

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Managing Layoffs

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Alternatives to Early Layoffs

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 Implementing Layoffs
• Notifying Employees
o WARN Act—60 -ay notice
• Developing Layoff Criteria
o Seniority or Employee Performance
• Communicating to Laid-Off Employees
• Coordinating Media Relations
• Maintaining Security
• Reassuring Survivors
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Effects of Layoffs on
Survivors
Increased absenteeism and turnover

Lower productivity and poorer job satisfaction

Increased sabotage

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 Outplacement
Goals of Outplacement:
• Reduce morale problems
• Minimize litigation
• Assist laid-off employees
Outplacement Services:
• Emotional support
• Job-search assistance

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 Summary and
Conclusions
• What Are Employee Separations?
• Types of Employee Separations
• Managing Early Retirements
• Managing Layoffs
• Outplacement

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