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Human Resources Management - Employee Empowerment & Seperations

Retirement and Other Process of Employees’ Separation - Employee Empowerment & Seperations

   Posted On :  13.06.2018 09:52 pm

Separation, also known as organizational exit is the dissolution of employment relationship.

Retirement and Other Process of Employees’ Separation

Separation, also known as organizational exit is the dissolution of employment relationship. It seeks to reduce the size or diversity of an organization’s operations. Separation can take many forms namely dismissal, resignation, retirement, death and downsizing actions. A firm incurs separation costs in the form of severance pay known also as separation pay, administration of separation process, rehiring, induction and training costs with regard to a new replacement into the vacant position. Depending on who initiates the separation, some observers tend to classify them as voluntary and involuntary.
Separation is a decision that the individual and the organization should be done away from each other. Voluntary separations occur when an employee decides for personal or professional reasons, to end the relationships with the employer. Such separations may further be classified as avoidable and unavoidable. Unavoidable voluntary separations occur due to circumstances beyond the control of an employee. However, most of voluntary separations are avoidable and occur due to staffing mistakes, which can be prevented by investing in HR systems. An involuntary separation occurs when management decides to terminate its relationship with its employee/s due to economic necessity / poor match between the employer and employees.
In general, separation may take any form such as retirement, layoff, retrenchment, discharge or dismissal. Employee turnover or attrition is a combination of all the forms of separation of an individual from the rolls of an organization. Compulsory separation could lead to anxiety in the person who leaves and also might lower the morale of the survivors. Any form of separation could create a void in the organization that needs to be filled up at the earliest. The benefits of employee separations include reduced labor costs, replacement of poor performers, increased innovation and creation of greater diversity of work force. Scientific human resource planning could minimize the need for such separations.
Retirement is the completion of service period of employees on their reaching the age of superannuation. Retirement from active employment is intended not only to permit older workers to enjoy their twilight years without the everyday pressures of working, but also to allow younger and capable employees to reach positions of higher authority. Retirement could be carried out prematurely when the organization offers a special retirement package before redesigning the workforce. The lump-sum pay serves as an incentive to leave one’s employment. Employees accept such retirements in exchange of a liberal package, which is called the scheme of Golden Handshake. Managements generally prefer to pay hefty amounts and reduce staff strength rather than retaining surplus labor and continuing to pay them idle wages.
The organization should plan for capable successors to take the role of people who retire even before their retirement. Most employees prefer to postpone retirement until they reach superannuation. Hence it is also the responsibility of any employer to plan and provide for the future life of the retiring employee. In the present context, when the lifespan of average citizen has gone up well above the retirement age, retirement is to be put to reconsideration in terms of revision of the age of retirement or alternative work styles like job sharing, home working, freelancing and part-time employment during post-retirement period.
Lay off refers to the temporary separation arising out of the failure, refusal, inability of an employer to continue to give employment to any group of employees in the organization due to economic or business reasons like shortage of fuel, lack of raw material, natural calamities and accumulation of excess stocks. Lay offs are caused mainly due to factors for which employees cannot be termed as direct and prime causes. Still, the organization must help them in dealing with any of the difficulties they might experience such as guilt (upon why they have let themselves into it), shame (how to face others after this), annoyance or anger (why they were chosen) and anxiety (what they would do next).
Retrenchment is said to be a permanent lay off for reasons other than punishment, retirement or termination owing to ill health. In both the cases of lay off and recruitment, a certain monetary compensation would become payable by the employer as per the statutes of the land. Further, clear communication and counseling would be required to minimize the negative effects of such measures of downsizing. The principle of last in; first out is advocated while prioritizing the people to be removed. Retrenchments might also occur due to global competitions, changing technologies that reduce the need for workforce, mergers and acquisitions and reduction in product demand.

Termination of service by way of dismissal might also be carried out as a final disciplinary procedure, after all efforts in salvaging the employee have failed. Dismissal can be ordered only when it is duly proven through formal procedures that one or more employees have engaged in any serious misconduct like theft, violence, sabotage, false statement of qualifications at the time of employment, or other actions specified in the company’s standing orders. Generous opportunities must be given to the employee to know the rules, modify his behavior in accordance to rules. He must be given an opportunity to explain his case by appearing before an impartial team of enquiry when charged with any misconduct. The management should never forget that any person who leaves the firm is going out to represent the organization, either bad-mouth or praise it.

Termination of this variety is aimed at serving as the strongest deterrent for other employees from engaging in punishable activities, rather than as a revenge on the people caught in the wrong side of rules. Termination of other employees has the potential in most of the employees to bring about a phenomenon called avoidance learning where by an employee pursues serious efforts to avoid similar situation to them. Termination in one department could have ripple effects in other. Terminations beyond a perceptible limit could result in difficulty in attracting fresh talents into the organization. Fortunately, such disciplinary terminations have alternatives too.

Direct confrontation by supervisors, a day of paid leave to induce reformative thinking etc, are aimed at making the erring employee introspect about what happened. Some organizations resort to progressive discipline involving increasingly higher intensity for punishments for every repetition of previous mistake or offence. When a person is found to be guilty of one offence, there should not be a carry-forward effect of the offence. The supervisor and the others in the organization should take care to appreciate if the employee engaged in any laudable activity. A clear-cut, written-down policy on termination would help to prevent the fire-at-will practices by some managers.

Discharge also means termination, but not necessarily an act of punishment. A discharge does not arise from a single, irrational or unacceptable act. There could be a lot of reasons for a decision to discharge an employee. A discharge takes place when the management of an organization decides that there is a poor fit between an employee and the organization. Discharge might be a result of either poor performance of the employee or a failure on his side to change some unacceptable behavior that management has tried repeatedly to correct. In the case of discharge, the employee would get more termination benefits than what would be possible when dismissed. Outplacement assistance for a discharged person by the employer is gaining ground in recent times, even as skills become redundant and jobs get outsourced en masse.

Voluntary resignation by employees is emerging to be a very common form of separation from an organization. The decision to quit depends on the employee’s level of dissatisfaction with the job and the number of attractive alternatives available outside the organization. Some organizations in the Information Technology Sector have institutionalized the practice of welcoming their ex-employees to rejoin them later. This would save them induction costs and ensure person-organization fit.

Some organizations have simplified the procedure to re-appoint their ex-employees, by requiring just a single sitting with the reporting authority to be able to join back the parent organization. Such organizations have also made the procedure for exit less cumbersome one by enabling their claims getting processed through a single window clearance mechanism. The administration of separation caused by resignation is very simple as it is unlikely to result in any dispute except the notice period or timely settlement of dues on either side.

The average tenure expectancy of employees within an organization has been steadily in the decline. From a life-long career path spanning over three decades, the average tenure has come down to five years and is shrinking further. Employees might want to leave the organization for reasons of better pay, working conditions, opportunities to learn and grow, or may cite ill health or domestic responsibilities to quit their positions. In any case, they would be required to serve a notice period by which they would be able to handover their duties and responsibilities to another incumbent. Causes for resignations are investigated during the exit interview wherein, the outgoing employee is requested to share his feedback about his working experiences in the organization.

The net result of organizational changes would be that of the jobs becoming more amorphous and more difficult to define. Changes are also taking place at individual jobs. A large number of poor performers at one job or organization are sometimes found to become solid successes at another, in which case the organization has to deliberate on its inherent deficiencies that caused a failure in tapping the right performance levels from them. Similarly, if successive incumbents in a post fail to perform or retain their jobs, then the attention should be focused on the system in which the work is done or on the job content itself, rather than the individuals. Such jobs are called as “Widow-maker Jobs” in Management Jargons of the west.

According to the management thinker and writer Peter Drucker, the workable solution for the problem would be to eliminate the job itself by redesigning the positions and responsibilities in a more practical and pragmatic manner. Some organizations resort to a method of easing out employees slowly and progressively. Referred to as Golden Parachuting, this method involves providing the employees adequate time of tenure and/or financial security to prepare themselves for facing life outside their employment. This kind of arrangement could be contractual and are often available for highly skilled human resources.

Tags : Human Resources Management - Employee Empowerment & Seperations
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