Managing Employee Seperations, Downsizing, and Outplacement, week 17

Employee separations occur when an employee quits to be a member of an organization. The turnover rate tells the rate of employee separations in an organization. Employee separations have costs and benefits. Costs include for example recruitment costs, selection costs, training costs, and separation costs. There are also benefits to the organization, such as reduced labor costs, replacement of poor performers, increased innovation, and the opportunity for greater diversity. (Gómez-Mejía, Balkin & Cardy 2012, 227-232.)

There are voluntary and involuntary separations. Voluntary separations include the decision to quit and retirements. Involuntary separations include discharges and layoffs, which need more documentation to prove that the decision is fair. (Gómez-Mejía & al. 2012, 232-235.)

Early retirements can be used as an alternative to layoffs when a company decides to downsize its operation. There can be problems for example if too many employees want to take early retirement, the wrong employees leave, and if employees feel that they are forced to leave. (Gómez-Mejía & al. 2012, 235-236.)

Layoff is usually the last possible way to reduce organizations’ labor costs. Often organizations look for alternative methods before layoffs such as attrition, which is an employment policy which reduces the size of the workforce because departing employees are not replaced. Hiring freeze is designed to reduce workforce by not hiring new employees into the company. Organization can also reduce costs by not renewing contract workers, encouraging employees to take time off, doing changes in job design, enforcing pay freezes and training. (Gómez-Mejía & al. 2012, 236-238.)

Implementing a layoff needs to be careful. It includes:

1. Notifying employees
2. Developing layoff criteria
3. Communicating to laid-off employees
4. Coordinating media relations
5. Maintaining security
6. Reassuring survivors of the layoff

(Gómez-Mejía & al. 2012, 238-240.)

It is a good idea for an organization to use outplacement services. The most common services are emotional support and job-search assistance. The goals are reducing the morale problems of employees so that they remain productive until they leave the firm, minimizing the amount of litigations, and assisting employees to find jobs as quickly as possible. (Gómez-Mejía & al. 2012, 242.)

References

Gómez-Mejía, R. L., Balkin, B. D., Cardy L. R. 2012. Managing Human Resources. Seventh Edition. Pearson Education. Upper Saddle River, New Jersey.