Separation & retention

Separation and
Retention Process

Part I : Procedure of
Separation
Part II : Retention
Process
• Discharge
• Retirement
• Layoff
• Retrenchment
• VRS
• Promotion
•Transfer
• Exit Interview

Part I : Procedure
of Separation

Employee Separation is the
process of
efficiently and fairly
terminating workers.
Separations : Final way in which an
employee leaves a position.
 Voluntary : Employee resigns.
 Involuntary : Employee is laid-off or
terminated.

Discharge: It is the process of
terminating the service of an employee
due to any serious misconduct.
It is a permanent separation of an
employee from the pay-roll for violation
of company rules for inadequate
performance.

Causes of Discharge:
a) FREQUENT CAUSES:
Inefficiency, Dishonesty, Drunkenness,
Carelessness.
b) INFREQUENT CAUSES:
Accidents, Insubordination, Personal Conduct,
Un-cleanliness, Infraction of Rules, Negligence.
c) OTHERS:
Laziness, Lack of Co-operation.

Steps to Discharge
an Employee:
 Preliminary Disciplinary Action
 Final Written Warning
 Notice of Discharge

Discharging an
Employee Discharging employees is one of the most
difficult tasks that a manager faces.
 Many organizations offer outplacement to
the employees laid off.
• Outplacement Services provide employees who
have been dismissed from an organization with
assistance in finding new jobs. Examples: Resume
Writing, Practice Interviewing and Support
Groups.

Retirement: It is the process
of leaving the organization permanently
by employees on the ground of attaining
the age of superannuation or voluntarily.
Retirement has been characterized
by some as a “role less role”.

Kinds of
Retirement Compulsory Retirement
Employee must retire compulsorily on attaining a specific age.
In Central Government Offices, the age is 60; in private firms,
employees may be given extension up till they are suitable to
do work.
If employee found guilty on either court of law or violated
conditions of the organization. He may be force to retire from
services without any benefit.
 Forced Retirement
 Premature Retirement
If an employee becomes disabled due to accident, or due to
some disease, he may be given option of retiring by
management.

Layoff: It is the act of suspending
or dismissing an employee (especially
temporarily), as for lack of work or
because of corporate reorganization.
It is period of temporary inactivity
or enforced unemployment.

The Legal aspect
of Layoff Section 25C of Industrial Disputes Act (IDA) 1947, does not
confer the right on employers to layoff workers for whatever
reasons they deem fit.
 According to Section 25M of IDA, unless the layoff is due to
shortage of power or natural calamity, no working men can be
laid off without the prior permission of the labor
commissioner.
 Maximum period of layoff is 45 days.
 If employer offers alternative employment, it will not be
considered a layoff even if the worker does not opt for it.
 The penalty stipulated for not complying with the provisions
of the IDA: Imprisonment for period of up to 1 month or a fine
up to Rs. 1000 or both.

Retrenchment: It is
something a kin to downsizing. When a company or
government goes through retrenchment, it reduces
outgoing money or expenditures or redirects focus
in an attempt to become more financially solvent.
Although retrenchment is most often used in
countries throughout the world to refer to layoffs, it
can also label the more general tactic of cutting back
and downsizing.

Ways to employ
Retrenchment Tactic
Companies can employ this tactic
based on the following three factors:
 HR Related Factors
 Product Related Factors
 Market Related Factors

Ways to employ
Retrenchment Tactic HR Related Factors:
Slash expenditures by laying off employees
 Closing superfluous offices or branches
 Reducing benefits such as medical coverage
or retirement plans
 Freezing hiring or salaries
 Cutting salaries

Ways to employ
Retrenchment Tactic
 Product Related Factors:
Slash expenditures by reducing the quality
of the materials used in a product
 Streamlining the process in which a product
is manufactured or produced

Ways to employ
Retrenchment Tactic Market Related Factors:
Downsizing in one market that is proving
unprofitable
 Building up the company in a more
profitable market
 If one market has become obsolete due to
modernization or technology, then a company
may decide to change with the times to
remain profitable

Retrenchment ( A
Foot note )Retrenchment doesn’t always mean people losing jobs,
although it can seem that way. If a company shifts into
concentrating on a different focus, that’s also called
Retrenching. It might even end up with more people
being hired, as the company needs the extra skill base.
For example, Apple once only dealt with computers.
Technically, when they shifted their muscle behind the
iPod, one could call that Retrenchment but did it result
in any actual job loss?

To be continued…
Voluntary Retirement
Scheme

Voluntary Retirement
SchemeVRS is one of the employee separation strategies
introduced in the early 1980s in central public sector
undertakings (PSUs)
 The VRS is the most humane technique to provide
overall reduction in the existing strength of the
employees
 VRS is a scheme whereby the employee is offered to
voluntarily retire from his services before his retirement
date.
 Its eligibility varies from company to company

Technicalities of VRS
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 years
 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
 Employees receiving VRS can get the Tax Exemption
up to an extent of Rs. 5 lakhs

A Footnote …
 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 no paper.

Promotion: According to Dale Yoder,
PROMOTION may be described as:
“A movement to a position in which
responsibilities and presumably, prestige are
increased.”
Promotions have a positive impact on the
employees. Besides pay hike it also satisfies the
higher needs of employees.

Purpose / Objectives of
Promotion
To recognize an individual’s performance and reward
him for his work
 To put the employee in a position where he will be of
greater value to the company
 To promote job satisfaction among the employees
and give them an opportunity for unbroken continuous
service

Purpose / Objectives of
PromotionTo build up morale, loyalty and a sense of belonging
on the part of the employees
 To demonstrate effective career development plans
 To attract suitable and competent employees for the
organization
 To create among employees a feeling of contentment
with their present conditions and encourage them to
succeed in the company

Types of Promotion
Open Promotions:
An organization or a company considers all
individuals within it as a potential candidate and
announces it to various aspirants internally.
 Closed Promotions:
An organization or company does not consider
all individuals within the organization but restricts the
openings or vacancies for higher positions. Also the
announcement is not done internally.
Frequently companies follow a combination of both the systems.

Types of Promotion
(Contd…)Dry Promotions:
Dry Promotions are those that are given in lieu of
increase in compensation.
 Horizontal Promotions:
Promotions that do not necessarily lead to the
change in the nature of work i.e. similar kind of work remains
intact. For e.g.. Lower to higher grade without any change in
the work content.
 Vertical Promotions:
Promotions that lead to the change in the nature of
the work. For e.g.. Supervisor to Manager.

Transfer: A transfer is a horizontal or
lateral movement of an employee from one job,
section, department, shift, plant or position to
another at the same or another place where his
salary, status and responsibility are the same.
Transfer may be initiated either by the
company or the employee. It also can be temporary
or permanent.

Purpose of Transfer
To increase the effectiveness of the organization
 To increase versatility and competence of key positions
 To deal with fluctuations in work requirements
 To correct incompatibilities in employee relations
 To correct erroneous placement
 To relieve monotony

Purpose of Transfer
(Contd…)
To adjust workforce
 To punish employees (Generally in Government
organizations, employees who commit mistakes or
malfeasance will be treated with transfer to other
place where he cannot act according to his wish
or misuse his job position)

Types of Transfers
Production Transfers:
Such transfers are made to meet the company
requirements. The surplus employees in one
department/section who are efficient might be
absorbed in other place where there is a requirement.
Such transfers help to stabilize employment.
 Replacement Transfers:
This takes place to replace an old employee who
has been in the organization for a long time by a new
employee thereby giving some relief to the old
employee from the heavy work pressure.

Types of Transfers
(Contd…)Versatility Transfers:
It is also known as rotation. It is aimed at all round
development of employees by moving them from one job
to another. It also helps to reduce boredom and monotony.
 Personal or Remedial Transfers:
Such a transfer is made to rectify mistakes in
selection and placement. As a follow up, the wrongly placed
employee is transferred to a more suitable job.
 Shift Transfers:
This is pretty common where there is more than one
shift and when there is regularized rotation.

Exit Interview: It is the final
formal meeting between the management and an
employee leaving the firm.
It is used as a learning opportunity for the
executives concerned who seek candid views on
work related problems.

Exit Interview – An
Overview
In HR terms, an Exit Interview is a survey that is
conducted with an employee when he or she leaves the
company. The info available from each survey is used to
provide feedback on why employees are leaving, what
they liked about their employment and what areas of
the company need improvement. Exit interviews are
most effective when the data is compiled and tracked
over time.

Types of Exit
InterviewIn-Person Exit Interview:
With in-person exit interviews an HR representative
meets individually with each terminating employee.
 Telephone Exit Interview:
It is conducted over the telephone by an HR
Representative or an outside third party consultant.
 Paper and Pencil Exit Interview:
It is usually conducted by means of a form that is
given to the employees on their last day or mailed to the
employees’ home.

Part II :
Employee
Retention Process

Employee Retention is the
process enacted towards
keeping or retaining good
employees within an
organization.
 It’s about culture and how employees are treated.
 It’s about presenting a consistent, effective
employer proposition across the entire employee
life cycle, thus ensuring that the employers source,
hire, manage and develop employees who partner
with them in achieving the organizational goals.

The 3 R’s of Employee
Retention
Reward
Recognition
Respect

Significance of Employee
RetentionHiring is not an easy process
An organization invests time and money in grooming an
individual and make him ready to work and understand the
corporate culture
When an individual resigns from his present organization, it
is more likely that he would join the competitors
The employees working for a longer period of time are
more familiar with the company’s policies, guidelines and
thus they adjust better

Significance of Employee
Retention (Contd…)
Every individual needs time to adjust with others
It has been observed that individuals sticking to an
organization for a longer span are more loyal
towards the management and the organization
It is essential for the organization to retain the
valuable employees showing potential

Determinants of Employee
Retention
Career Development Opportunities
Supervisor Support
Work Environment
Rewards
Work – Life Policies

Employee Retention
StrategiesEmployee Reward Program
Career Development Program
Performance Based Bonus
Employee Referral Plan
Loyalty Bonus
Employee Recreation
Accountability
Surveys

Separation & retention

More Related Content

What's hot (20)

Similar to Separation & retention (20)

More from Chirag Tewari (20)

Recently uploaded (20)

Separation & retention