SEPARATION

HUMAN RESOURCE MANAGEMENT

INTRODUCTION
With a stalled economy , a depressed technology and the continuing economic fallout resulting from the terrorist attacks and not much demand for the products & services. To lower the expenses , managers are turning more often to firing employees (also called terminating , downsizing , rightsizing or getting a pink slip).

CONCEPT OF EMPLOYEE SEPARATION

Employee Separation is one of the very important and crucial function / process of HR Department. This process, if not handled in an efficient manner, can lead to various legal complications . An employee works for an employer and gets paid for his work and nothing else. Separation occurs when an employee leaves the organization.

CONCEPT OF EMPLOYEE SEPARATION

Broadly speaking, in normal scenarios the separation between employer and employee can be due to any of the following three 1) Resignation Employee decides to leave the organization. 2) Termination Employer decides to break the contract of employment.

3) Absconding When the employee decides to leave the organization without tendering his resignation or following the proper process of separation.

TYPES OF SEPARATION
Voluntary and Involuntary Separation Voluntary QUITS RETIREMENTS Involuntary DISCHARGES LAYOFFS RETRENCHMENT VOLUNTARY RETIREMENT SCHEME RIGHTSIZING

QUITS
Voluntary separations occur when the employee decides to terminate his or her relationship with the organization. A employee decides to quit when his or her level of dissatisfaction with the present job is high or more attractive alternative job is awaiting the individual. The reasons for dissatisfaction may be because of the job itself or because of job extrinsic factors as supervision , company policy , compensation , advancement opportunities , health , spouse relocation and the like.

RETIREMENTS
Retirements occur when employees reach the end of their careers . The age of superannuation differs . In some states it is 58 years and in central Govt., is 60 , its likely to raise because of shortage of skilled work force . When the employee superannuates and leave the organization , he or she carries several benefits with himself or herself.

Involuntary Separations
1. 2. 3. Employers resort to terminate employment contract with employees for at least three reasons Organization is passing through lean period and is unable to maintain the existing labour. Initial faulty hiring resulting in mismatch between job and employee fit , and Employee exhibits deviant behavior violating the policy .

Discharges , Layoffs , VRS , and rightsizing are the common methods of employer sponsored separations

DISCHARGE
A Discharge takes place when the employer discovers that it is no more desirable to keep an employee any longer. Discharge also called termination, should be avoided as far as possible . Any termination is a reflection on the companys HR system.

In addition , termination is expensive as the firm seek replacement , hire and train the new employee .

Discharged individual is likely to badmouth about the company.

Discharge needs to be viewed as a last resort.

LAYOFFS/REDUNDANCY
A layoff is a temporary separation of the employee , as section 2 of the industrial disputes act , 1947 defines layoff as the failure , refusal or inability of an employer to give employment to a worker whose name is present on the rolls but who has not been retrenched.

A layoff may be for a definite period on the expiry of which the employee will be recalled by the employer for duty.

also called redundancy

LAYOFFS
1. 2. 3. 4. A lay-off may be one of the reasons Shortage of coal , raw materials Accumulation of stocks Break down of machinery For any other reason.

During layoff employee get half of the normal wages .

RETRENCHMENT
It refers to the termination of the services of employees because of the replacement of labour by machines or the closure of a department due to continuing lack of demand for the products manufactured in that particular department of the organization .

In Retrenchment the employee is sent home and is or her connections with the company is withdrawn.

VOLUNTARY RETIREMENT SCHEME (VRS)

Voluntary retirement scheme is yet another type of separation .companies both in public sector and private sector have been sending home surplus labour for good by a novel scheme called VRS, also called Golden Hand Shake Plan. VRS also results in separation of employee from employer . VRS is resorted to where organizations have surplus labour.

RIGHTSIZING
Rightsizing theoretically means reducing the size of workforce or increasing it to maintain the employee strength at the most desired level. In reality , rightsizing means DOWNSIZING the employee strength through planned elimination of jobs.

DOWNSIZING
Downsizing is the conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness. Downsizing is being regarded by management as one of the preferred routes to turning around declining organizations, cutting costs, and improving organizational performance, most often as a cost-cutting measure.

DOWNSIZING
Downsizing is extremely difficult. It taxes all of a management team's resources, including both business and humanity . Downsizing is a commonly used euphemism (unpleasant )which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees.

When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector.

DOWNSIZING
There are several reasons to engage in downsizing. The primary reason is to make the daily operations of a business more efficient. For example, a company may be able to replace assembly line employees with machines which will be quicker and less prone to error. In addition, downsizing increases profits by reducing the overall overheads of a business. In other instances, a company may decide to shut down an entire division; a car company, for example, might decide to stop making Maruti 800 , thus cutting an entire department.

EMPLOYEE TURNOVER
Employee turnover is a ratio comparison of the number of employees a company must replace in a given time period to the average number of total employees. Employee turnover is a costly expense especially in lower paying job roles, for which the employee turnover rate is highest.

EMPLOYEE TURNOVER
Wages, company benefits, and job performance are all factors that play a significant role in employee turnover.

Companies take a deep interest in their employee turnover rate because it is a costly part of doing business.

When a company must replace a worker, the company incurs direct and indirect expenses. These expenses include the cost of advertising, headhunting fees, human resource costs, loss of productivity, new hire training, and customer retention .
All of which can add up to anywhere from 30 to 200 percent of a single employee's annual wages or salary, depending on the industry and the job role being filled.

MANAGING SEPARATIONS
Separations of whatever the type, organization become trimmer and leaner, there is a saving in the wage and salary bill , and new entrants , hired to fill the vacant jobs bring new ideas and experience along with them , But on the negative side disrupts employee morale and instead of causing to the reduction in cost , may add to the cost . Cost of turnover include retirement costs and hiring and training costs.

MANAGING SEPARATIONS
The strategy for managing separations involves retaining high performers through innovative reward schemes, while engaging in human resource planning to ensure that as few employees as possible that will make them difficult to replace.

TERMINATION POLICIES & PRACTICES

Voluntary Termination Temporary Employees who voluntarily resign are expected to give a minimum of one month notice and to submit a letter of resignation to their supervisors or department heads specifying the reason for resignation and the last day of work. If a terminating employment is eligible for any incentive compensation , bonus and /or awards , they must actively employed on the date of compensation , bonus or awards are presented or paid in order to receive the compensation , bonus or award.

INVOLUNTARY TERMINATION
There are several situations that can result in involuntary termination. These include, but are not limited to Unsatisfactory job performance Misconduct Refusal or reluctance to do tasks which are within job description Frequent Tardiness (slow) Frequent absences Improper use of work privileges for personal gain Insubordination Falsification of timecards/sheets Being at work under the influence of illegal substances Theft Sexually or racially harassing a co-worker or client Violating the University Professional Standards and Business Conduct Policy or the Code of Student Conduct Violating standards of conduct or behavior set by department/supervisor .

Separation means cessation (stopping) of service agreement with the organization for one or other reason.

THANK YOU ALL FOR CO-OPERATION