Employee Separation

 Employee Separation is the process of efficiently and fairly terminating workers.

 Separations : Final way in which an employee leaves a position.
 Two types of Separation:
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
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.

 Forced Retirement
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.

 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. penalty stipulated for not complying with the
 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
 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
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.