Employee Separations, Downsizing

and Outplacement
 Employee Separation
• Employee separation could be defined as the
process by which an organization or an
individual ends his or her employment with
that organization.
• It could be of two types –
a) Voluntary
b) Involuntary
 Types of separation
• Voluntary separation - Is when an employee
decides for personal or professional reasons to
end the relationship with the employer. E.g.
Quits, Retirements
• Involuntary separation - Is when an employer
terminates the relationship with an employee
due to economic necessity or poor fit between
the employee and the organization. E.g.
Discharge, Layoffs, Retrenchments, Downsizing,
Rightsizing.
 Voluntary Separation
• Quits – An employee resigns when his or her
level of dissatisfaction with the present job is high
or a more attractive alternative job is awaiting
the individual.
• Retirements – It occurs when the employee
reaches at the end of his career. In some states it
is 58 years and in Central Government it is 60
years. Government has even increased the age
limit from 60 years to 62 years, as skill lacks in the
market.
 Involuntary Separations
• Discharges – A discharge takes place when the
employer discovers that it is no more desirable to keep
an employee any longer. It is also called as termination.
• Layoffs – It is a temporary separation of the employee
at the instance of the employer. It is a less severe form
of termination which is also called as “Redundancy”. It
is not strictly related to personal performance, but
instead due to economic cycles or the company’s need
to restructure itself, the firm may itself going out of
business or a change in the function of the employer.
• Downsizing – Reducing the number of the
employees on the operating payroll on the
permanent basis.
Business use several techniques in downsizing
including providing incentives to take early
retirement and transfer to subsidiary
companies, but the most common technique is
to simply terminate the employment of a certain
number of people.
 Reason for downsizing
• Cost reduction
• Downsizing may improve productivity of the
individual worker while remaining constant
with the company’s productivity.
• Increase productivity by replacing worker with
the sophisticated equipment that can do the
same job.
 Outplacement
• “Outplacement is a term used to describe efforts made by a
downsizing company to help former employees through the
transition to new jobs and help them re-orientate to the
job market. A consultancy firm usually provides the
outplacement services which are paid for by the former
employer and are achieved through practical advice and
psychological support.
• Outplacement is either delivered through individual one-
on-one sessions or in a group format. Topics include career
guidance, career evaluation, resume writing and interview
preparation, developing networks, job search skills and
targeting the job market. Individuals may be offered other
services such as the use of an office and online tools.”
• Rightsizing – It is downsizing in belief that an
enterprise should really operate with fewer
people.
• Retrenchments – It is akin to downsizing. It
reduces outgoing money or expenditures or
redirects focus to become more financially
solvent. It is done in 3 different ways -
1) Laying off employees, closing superfluous
offices, reducing medical coverage, cutting
salaries and retirement benefits.
2) Reducing quality of material and streamline the
process of manufacturing.
3) Downsizing one market which is unprofitable
and building up the company in a more
profitable market.
 Exit interview
• An exit interview is an interview which is
conducted by an employer when an employee
separates from the organization. These
interviews are usually conducted by the
Human Resource Staff or some skilled
interviewer. The confidentiality of these
interviews should be assured while open
ended questions should be asked without any
interrogation.
 Horizontal movement of the
employees
• Transfer – Is done mainly on three different
criteria’s –
1. To enhance training and development
2. Making possible adjustment to varying volumes
of work within firm.
3. Those designed to remedy the problem of poor
placement.
Based on these criteria’s, transfers are divided into
production transfer, replacement transfer,
Versatility transfer, Shift transfer, remedial transfer.
 Upward movement of employees
• Promotion – From one designation to a level
up is done to motivate employees, to attract
and retain the competent employee, to
recognize and reward the efficient employee,
to fill up higher vacancies, to build a sense of
belongingness.