Managing Employee Separations, Downsizing, and Outplacement

1. Chapter 6 Managing Employee Separations, Downsizing, and Outplacement (c) 2007 by Prentice Hall

2. Chapter 6 Overview • Identify the costs and benefits associated with employee separations • Understand the differences between voluntary and involuntary separations • Avoid problems in the design of early retirement policies • Design HRM policies for downsizing that are alternatives to layoffs and develop a layoff program that is effective and fair (c) 2007 by Prentice Hall

3. What Are Employee Separations? • Employee separations – The termination of an employee’s membership in an organization. • Turnover rate – The rate of employee separations in an organization. (c) 2007 by Prentice Hall

4. What Are Employee Separations? • The costs of employee separations • Recruitment costs • Selection costs • Training costs • Separation costs (c) 2007 by Prentice Hall

5. What Are Employee Separations? (c) 2007 by Prentice Hall

6. What Are Employee Separations? The benefits of employee separations • Reduced labor costs • Replacement of poor performers • Increased innovation • Opportunity for greater diversity (c) 2007 by Prentice Hall

7. Types of Employee Separations • Voluntary separation – A separation that occurs when an employee decides, for personal or professional reasons, to end the relationship with the employer. • Quits • Retirements (c) 2007 by Prentice Hall

8. Types of Employee Separations • Involuntary separation – A separation that occurs when an employer decides to terminate its relationship with an employee due to (1) economic necessity or (2) a poor fit between the employee and the organization. • Discharges • Layoffs, downsizing, and rightsizing (c) 2007 by Prentice Hall

9. Managing Early Retirements • The features of early retirement policies • Avoiding problems with early retirements • A longtime employee who has performed satisfactorily over many years suddenly receives an unsatisfactory performance evaluation • A manager indicates that senior employees who do not take early retirement may lose their jobs anyway because a layoff is likely in the near future • Senior employees notice that their most recent pay raises are quite a bit lower than those of other, younger workers who are not eligible for early retirement (c) 2007 by Prentice Hall

10. Managing Early Retirements (c) 2007 by Prentice Hall

11. Managing Layoffs Alternatives to Layoffs – Employment Policies • Attrition – An employment policy designed to reduce the company’s workforce by not refilling job vacancies that are created by turnover. • Hiring freeze – An employment policy designed to reduce the company’s workforce by not hiring any new employees into the company. (c) 2007 by Prentice Hall

12. Managing Layoffs • Implementing a layoff • Notifying employees • Worker Adjustment and Retraining Notification Act – (WARN) (c) 2007 by Prentice Hall

13. Managing Layoffs Implementing a Layoff – continued • Develop layoff criteria • Communicating to laid-off employees • Coordinating media relations • Maintaining security • Reassuring survivors of the layoffs (c) 2007 by Prentice Hall

14. Outplacement • The Goals of Outplacement - • Reducing the morale problems of employees who are about to be laid off • Minimizing the amount of litigation initiated by separated employees • Assisting separated employees in finding comparable jobs as quickly as possible (c) 2007 by Prentice Hall

15. Outplacement Outplacement Services • Emotional Support • Job-search Assistance (c) 2007 by Prentice Hall

16. Summary and Conclusions • What are employee separations? • Types of employee separations • Managing early retirements • Managing layoffs • Outplacement (c) 2007 by Prentice Hall