 Adjustment in the size of workforce of an enterprise .

 Adjustment may be needed to meet special situations :

 changes in organizational structure,

 relocation of individuals,

 fluctuation in volume of production

 employment

 Provide workforce flexibility & mobility to suit the

requirements of the organization.
 Can be accomplished informally or formally.
 Commands
better pay, better
It is a status , higher
vertical opportunities/
Defined as an move in challenges,
upward rank & responsibility &
advancement of responsi authority, better
an employee in bility. working
an organization environment &
to another job . so on.
Purpose :
 To furnish an effective incentive for initiative,
enterprise & ambition.
 To conserve proved skill, training & ability.
 To reduce discontent & unrest.
 To attract suitable & competent workers.
 To suggest logical training for advancement.
 Lateral/ horizontal movement of
an employee from one position to
another without any change in
pay, skills, status etc.

May be either company-initiated

or employee initiated.
 Purpose :
 To satisfy needs of an organization
 To meet an employee’s own request.
 To utilize properly the services of an employee.
 To increase the versatility of the employee.
 To adjust the workforce of one plant with another
plant.
 To replace an employee with another employee
 To penalize the employee.
 means cessation of service with the
organization for one or other reason.
 Employee may be separated from the payroll
of a company as a result of:
 Resignation
 Discharge & Dismissal
 Suspension
 Retrenchment
 Lay-off
Compulsory or voluntary action
done by the employer or
employee.

Reason : to avoid termination of

his/her service, on the ground of
health, physical disability, better
opportunities etc.
 Permanent separation of an employee
from the pay roll.

Reason : violation of company rules,

inadequate performance, dishonesty etc.

Carries certain penalties.

 Termination of the service of an
employee by way of punishment for
some misconduct, unauthorized &
prolonged absence from duty etc.

Termination without notice or

payment
 Part of a disciplinary procedure.

Employee suspended on full pay if allegations

of misconduct have been made against
him/her and are being investigated.

Suspension on full pay is not a punishment,

but part of the investigation process in a
disciplinary procedure for many employers.
 Known as ‘reduction of workforce’

Defined as an activity to legally terminate any

employment contract with the employee by
offering a compensation package

Redundancy is one of the reasons for

retrenchment.
 Refers as indefinite separation of the employee from
the payroll due to factors beyond the control of the
employer.
 Purpose: to reduce the financial burden on an
organization.
 Layoffs are not caused by any fault of the employees
but by reasons such as lack of work, cash, or material.
Permanent layoff is called redundancy.
 A layoff is when an employer suspends or terminates
a worker, either temporarily or permanently, for
business reasons
 Layoff refers to the provisional termination of
the employee, at the instance of the employer.
 As soon as the layoff period is over, the
employees are re-appointed to their previous
posts.
 Retrenchment, in which the employees are
not taken back by the company, once they are
terminated.