1. CHAPTER 13: EMPLOYEE SEPARATION
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2. Employee Separation Reasons for employee separations
Pressures on firms to remain competitive & efficient
Decline in employee commitment to employers
Importance of managing separations
Transitions of employees out of firm go smoothly
Continuing operations of firm not disrupted
Important professional relationships not damaged
Types of separations
Reductions-in-force, turnover, & retirements
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3. Reductions-in-Force (RIFs)
Causes of reductions
Restructuring as a result of mergers & acquisitions
Attempts to make organization more cost competitive
Adjustments to declining business environment conditions
Reasons for reductions
Inefficiency in operations
Lack of adaptability in marketplace
Weakened competitive position in industry
Methods for dealing with reductions
Continuance pay & outplacement programs
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4. Reductions-in-Force (RIFs)
Worker Adjustment Retraining & Notification Act (WARN) of 1989
Requires employers with more than 100 employees to provide sixty days written notice of any facility closings or large-scale layoffs of 50 or more employees
WARN does no apply to governmental agencies
Exceptions to WARN
“Faltering company”
“Unforeseeable circumstance”
Natural disaster
“Temporary facility”
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5. Workforce Management Strategies
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6. “Beneficial” turnover
Involuntary turnover
Employees asked to leave organization for cause or due to circumstances that cause reduction-in-force
Voluntary turnover
Employees who leave organization on own initiative
“Beneficial” turnover
Low performing employees depart &/or new higher performing employees promoted or hired as replacements
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7. Exhibit 13-2 Performance-Replaceability Strategy Matrix
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8. Exhibit 13-3 Strategic Management of Turnover & Retention
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9. Retention of High Performers
Critical HR issue
Development of policies & programs to retain high performers &/or those difficult to replace
Employers face competition from
Other organizations
From employees they are attempting to retain (to start-ups)
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10. Retirement Age Discrimination Act of 1967 Retirement
Prohibits employer from setting mandatory retirement age except in certain occupations (e.g. pilots)
Retirement
Creates advancement opportunities for younger employees & reduces payroll costs
Can cause loss of vital historical knowledge of organization, industry & marketplace
Part-time & consulting work can ease transition of older workers into retirement
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11. Why companies fail to address turnover issue
Reading 13.1 Holding on to High Performers: A Strategic Approach to Retention
Major turnover trends
Increasing turnover rates having significant impact on organizational success
Costs associated with turnover, especially of high performers, continues to escalate
Why companies fail to address turnover issue
Pervasive belief that high turnover is inevitable in strong economy
Failure of companies to develop effective strategies for managing employee turnover
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12. Well-planned & coordinated retention strategy
Reading 13.1 Holding on to High Performers: A Strategic Approach to Retention
Well-planned & coordinated retention strategy
Selection & orientation
Training & career management
Motivation & compensation
Recruitment practices that focus on cultural fit
Define critical “success factors” for job
Behavioral-based selection interviewing
Effective orientation
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13. Training & career management
Reading 13.1 Holding on to High Performers: A Strategic Approach to Retention
Training & career management
Create learning environment
Adopt interactive approach to training & development
Establish development as line responsibility
Offer variety of development opportunities
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14. Motivation & compensation
Reading 13.1 Holding on to High Performers: A Strategic Approach to Retention
Motivation & compensation
Many companies are willing to match financial offerings
May not be wise to focus primarily on money
Incorporate nonfinancial rewards into compensation programs
Enlist high performers in solving business problems
Recognize employee efforts more informally, more personally, & more frequently
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15. Final recommendations
Reading 13.1 Holding on to High Performers: A Strategic Approach to Retention
Final recommendations
Design strategies that reflect particular situation
Evaluate effectiveness of efforts as systematically as possible
Conduct exit interviews
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16. Reading 13.2 Strategies for Responsible Restructuring
Economic consequences of employment downsizing
Neither employment nor asset downsizing strategies yielded long-term payoffs significantly larger than those generated by stable employers
Not possible for firms to “save” or “shrink” their way to prosperity
Prosperity was only possible by growing businesses
Firms cannot assume that layoffs are quick fix
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17. Reading 13.2 Strategies for Responsible Restructuring
What’s different about current layoffs?
Healthy companies hoping to reduce costs & boost earnings by reducing head count
At same time firms are firing some people, are hiring others
More managers are briefing employees regularly about economic status of companies, which raises awareness & prepares employees
Outplacement centers have become America’s new hiring halls
Phenomenon of layoffs not limited to U.S.
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18. Reading 13.2 Strategies for Responsible Restructuring
Ten mistakes to avoid when restructuring
Failure to be clear about long- & short-term goals
Use of downsizing as first resort, rather than as last
Use of non-selective downsizing
Failure to change ways work is done
Failure to involve workers in restructuring process
Failure to communicate openly & honestly
Inept handling of those who lose jobs
Failure to manage survivors effectively
Ignoring effects on other stakeholders
Failure to evaluate results & learn from mistakes
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19. Reading 13.2 Strategies for Responsible Restructuring
What to do
Carefully consider rationale behind restructuring
Consider virtues of stability
Managers make concerns known to employees & seek input
Don’t use downsizing as “quick fix” to achieve short-term goals in face of long-term problems
Be sure employees perceive process as fair
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20. Reading 13.2 Strategies for Responsible Restructuring
What to do
Make decisions in consistent manner
Communicate regularly & in variety of ways
Give survivors reason to stay, & prospective new hires reason to join
Train employees & managers in new ways of operating
Examine all HR systems carefully in light of change of strategy or environment facing firm
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21. Reading 13.3 Retirement of Older Workers: Issues & Policies
Mandatory retirement can cause great economic & emotional hardship to many older workers
Shock of compulsory retirement & resulting loss of productive work & earning power may lead to impaired health & mental well-being
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22. Reading 13.3 Retirement of Older Workers: Issues & Policies
A strong case for flexible retirement policies
Population getting older
People living longer
Labor force is growing at slower rate
Age distribution changing in favor of older groups
Labor market activity declining among older workers
Average retirement age is declining
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23. Reading 13.3 Retirement of Older Workers: Issues & Policies
Management of labor shortages in some highly skilled trades in next decade will require
Employment strategies that slow down withdrawal of older workers from areas of highest productivity & growth in economy or
Prevent total loss of such vital skills & expertise in post-retirement period
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24. Reading 13.3 Retirement of Older Workers: Issues & Policies
Age-performance relationship
Individual differences much more important than age group differences
Chronological age accounts for only small percentage of variance in performance
Age & performance appears to be generally unrelated
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25. Reading 13.3 Retirement of Older Workers: Issues & Policies
Arguments for mandatory retirement
Assumes that job performance & age become negatively correlated after worker reaches certain age
Enables “retirement with dignity” & allows for dismissal without cause other than age
Minimizes need to monitor & assess older worker performance
Justifies compensation sequencing schemes that underpay younger workers & overpay older workers
Assumes older workers are less trainable or adaptable
Serves need for organizational planning & renewal
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26. Reading 13.3 Retirement of Older Workers: Issues & Policies
Implications for organizational retirement policy development
Monitor retirement policies so they meet requirements of legislation
Undertake human resource planning to insure levels of required skills are maintained & not unduly depleted by retirement programs & policies
Develop age-neutral policies to ensure effective access to & utilization of older workers
Create flexible work & retirement arrangements that met needs of older workers & organization
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