EMPLOYEE MAINTENANCE AND SEPARATION

CHAPTER TEN
 Employee Maintenance
Employee transfer- refers to the company assigning an employee to a
position in a different area of the company. Transfers do not necessarily
increase job responsibilities or compensation.

Transfers are usually lateral moves, that is, moves to a job with a similar
level of responsibility.

It may involve relocation to another branch of the company in another part

of the country or even to another country.
 Employee Maintenance

Employee promotion- a promotion involves moving an employee into a

position with greater challenges, more responsibility, and more authority
than in the previous job.

Usually promotions include pay increases. Because promotions improve

the person’s pay, status, and feelings of accomplishment, employees are
more willing to accept promotions than lateral or downward moves.
 Employee Maintenance

Read from proclamation No. 1156/2019 part five the whole

section about :
Annual leave
Special leave
Sick leave
 Employee separation

An employee separation occurs when an employee ceases to be a

member of an organization.

The turnover rate is a measure of the rate at which employees

leave the firm.
 TYPES OF SEPARATION

Employee separations can be divided into two categories.

1. Voluntary separations are initiated by the employee.

2. Involuntary separations are initiated by the employer.

 VOLUNTARY SEPARATIONS

Voluntary separations occur when an employee decides, for personal or

professional reasons, to end the relationship with the employer.

The decision could be based on the employee obtaining a better job,

changing careers, or wanting more time for family or leisure activities.

Alternatively, the decision could be based on the employee finding the

present job unattractive because of poor working conditions, low pay or
benefits, a bad relationship with a supervisor, and so on.
 VOLUNTARY SEPARATIONS

Voluntary separations can be either avoidable or unavoidable.

Unavoidable voluntary separations result from an employee’s

life decisions that extend beyond an employer’s control, such as a
spouse’s decision to move to a new area that requires a relocation
for the employee.

The two types of voluntary separations are quits and retirements.

 VOLUNTARY SEPARATIONS
The decision to quit depends on

 The employee’s level of dissatisfaction with the job The employee

can be dissatisfied with the job itself, the job environment, or both.

 The number of attractive alternatives the employee has outside the

organization.
 INVOLUNTARY SEPARATIONS

An involuntary separation occurs when management decides to

terminate its relationship with an employee due to:

 Economic necessity or

Poor fit between the employee and the organization

Involuntary separations are the result of very serious and painful

decisions that can have a profound effect on the entire organization and
especially on the employee who loses his or her job.
 INVOLUNTARY SEPARATIONS

DISCHARGES - takes place when management decides that there is

a poor fit between an employee and the organization.

The discharge is a result of either poor performance or the

employee’s failure to change some unacceptable behavior that
management has tried repeatedly to correct.
 INVOLUNTARY SEPARATIONS

Layoffs- are a means for an organization to cut costs in economic

challenges.

With a layoff, employees lose their jobs because a change in the

company’s environment or strategy forces it to reduce its
workforce.
 THE COSTS OF EMPLOYEE SEPARATIONS

The costs can be categorized as recruitment costs, selection costs, training costs,
and separation costs.

RECRUITMENT COSTS The costs associated with recruiting a replacement

may include advertising the job vacancy and using a professional recruiter to travel
to various locations (including college campuses). i.e, Recruitment costs include
costs such as advertising , campus visits, recruiter time, search firm fees.
 THE COSTS OF EMPLOYEE SEPARATIONS

SELECTION COSTS: Selection costs are associated with selecting, hiring, and
placing a new employee in a job.

Interviewing the job applicant includes the costs associated with travel to the
interview site and the productivity lost in organizing the interviews and arranging
meetings to make selection decisions.

i.e., Selection costs include costs such as interviewing, testing, reference checks,
relocation.
 THE COSTS OF EMPLOYEE SEPARATIONS

TRAINING COSTS: most new employees need some specific training to do their
job. Training costs also include the costs associated with an orientation to the
company’s values and culture. Also important are direct training costs—
specifically, the cost of instruction, books, and materials for training courses.

Finally, while new employees are being trained they are not performing at the level
of fully trained employees, thus, some productivity is lost.

i.e. Training cost include such as, orientation, direct training costs, trainer’s time,
lost productivity during training.
 THE COSTS OF EMPLOYEE SEPARATIONS

SEPARATION COSTS: A company incurs separation costs for all employees who
leave, whether or not they will be replaced.

The largest separation cost is compensation in terms of pay and benefits. Most
companies provide severance pay (also called separation pay ) for laid-off employees.

Severance pay may add up to several months’ salary for an experienced employee.
Although length of service is the main factor in determining the amount of severance
pay, many companies also use formulas that take into account factors such as salary,
grade level, and title.
 THE COSTS OF EMPLOYEE SEPARATIONS

Other separation costs are associated with the administration of the separation
itself. Administration often includes an exit interview.
exit interview

An employee’s final interview following separation.

The purpose of the interview is to find out the reasons why the employee is leaving
(if the separation is voluntary) or to provide counseling and/or assistance in finding
a new job (if the separation is due to layoff).
THE BENEFITS OF EMPLOYEE SEPARATIONS
REDUCED LABOR COSTS:

An organization can reduce its total labor costs by reducing the size of its
workforce.

Although separation costs in a layoff can be considerable, the salary savings

resulting from the elimination of some jobs can easily outweigh the
separation pay and other expenditures associated with the layoff.
THE BENEFITS OF EMPLOYEE SEPARATIONS
SEPERATION GIVES OPPORTUNITY FOR REPLACING OF POOR
PERFORMERS-

an integral part of management is identifying poor performers and helping

them improve their performance.

If an employee does not respond well to interventions that aim to improve

his/her performance, it may be best to terminate him /her so that a new and
presumably more skilled employee can be brought in.
THE BENEFITS OF EMPLOYEE SEPARATIONS
INCREASED INNOVATION:

Separations create advancement opportunities for high-performing

individuals.

They also open up entry-level positions as employees are promoted from

within.

An important source of innovation in companies is new people hired from the

outside who can offer a fresh perspective.
THE BENEFITS OF EMPLOYEE SEPARATIONS

THE OPPORTUNITY FOR GREATER DIVERSITY:

Separations create opportunities to hire employees from diverse backgrounds

and to redistribute the cultural and gender composition of the workforce .
 Employee safety and health

Read from proclamation 1156/2019 the whole sections about:

Occupational Safety, Health and Working Environment
Occupational injuries
Degree of disablement
Benefits in the case of employment injuries
Medical benefits
Various kinds of cash benefits