Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Managing Employee Separations, Downsizing, and Outplacement 6-1 Chapter 6

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Chapter 6 Objectives  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. 6-2

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall  Design HRM policies for downsizing the organization that are alternatives to a layoff; and, when all else fails, develop a layoff program that is effective and fair to the firm’s stakeholders.  Understand the significance and value of outplacement programs. 6-3 Chapter 6 Objectives

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall What Are Employee Separations?  Employee separations—termination of an employee’s membership in an organization  Turnover rate—rate of employee separations in an organization 6-4

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Costs of Employee Separations 6-5

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Benefits of Employee Separations  Reduced labor costs  Replacement of poor performers  Increased innovation  Opportunity for greater diversity 6-6

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Types of Employee Separations  Voluntary separation —the employee ends the relationship with the employer  Avoidable vs. Unavoidable  Quits  Retirements 6-7  Involuntary separation— the employer terminates the employment relationship  Discharges  Layoffs, downsizing, and rightsizing

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Managing Early Retirements  May substantially reduce the size of the workforce  Must be managed carefully 6-8  Features of early retirement policies:  Financial incentives package  Open window

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Managing Early Retirements  Possible problems policy:  Too many employees accept plan  Wrong employees may leave  Employees may feel they are being forced out 6-9  Management:  Ask how employees would respond to an early retirement offer  Treat senior employees like all other employees

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Managing Layoffs 6-10

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Alternatives to Layoffs Attrition Hiring freeze Not renewing contract workers Encourage voluntary time off Redesign jobs Transfers and Relocations Job sharing Freeze or cut pay Retrain workers 6-11

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Implementing a Layoff  Notifying employees  Worker Adjustment and Retraining Notification Act (WARN)—60 days notice 6-12  Developing Layoff Criteria  Seniority vs. Employee Performance  Communicating to laid-off employees  Face-to-face discussion  Middle of the week

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Implementing a Layoff  Coordinating media relations  Rumors can be very damaging 6-13  Maintaining security  Potential need for escorts  Reassuring survivors of the layoffs  Minimize survivor anxiety  Listen to survivors’ concerns  Create upbeat, energetic climate  Show employees you appreciate their work

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Outplacement  Program for separated employees  Emotional support  Job search assistance 6-14  Three goals:  Reducing the morale problems  Minimize litigation initiated by separated employees  Assist separated employees in finding comparable jobs as quickly as possible

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Summary and Conclusions  Separations have costs & benefits  Separations are both voluntarily or involuntarily  Consider voluntary early retirement as an alternative to layoffs  Layoffs should be a last resort  Outplacement services can help separated employees 6-15

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 6-16 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.