Employee Separations

Employee separations occur when employees cease to be members of an organization. The service agreement between the employee and the employer comes to an end when the employee decides to leave the organization. Separations can take several forms such as:

Resignation: An employee may decide to quit an organization voluntarily on personal or professional grounds such as getting a better job, changing careers, wanting to spend more time with family, or leisure activities. The decisions could alternatively be traced to the employee’s displeasure with the current jobs’ pay, working conditions or colleagues. Sometimes an employee may be forced to quit the organization compulsorily on grounds of negligence of duty, insubordination, misuse of funds etc. The resignation in this case, unlike voluntary separation is initiated by the employer. If the employees refuse to quit, they may have to face disciplinary action.

When employees resign or quit an organization, there will be a certain amount of disruption to the normal flow of work. Replacing an experienced and talented person may not be easy in a short span of time. Training new recruits would take time and may even prove to be a prohibitive exercise in terms of costs. The HR Department therefore should examine the factors behind resignation carefully. Whenever possible, exit interviews must be conducted to find out why a person has decided to call it a day. To get to the truth behind the curtain departees must be encouraged to speak openly and frankly. The interviewer must ensure confidentiality of the information leaked out by the employee . The purpose of the interview must be explained clearly and the interviewer must listen to the departee’s views, opinions, critical remarks patiently and sympathetically. Every attempt must be made to make the parting of ways more pleasant (e.g. conducting interview in a place where the employees is comfortable giving a patient and sympathetic hearing to the employees, wishing him success after settling all the dues etc) . There should, however, be no attempts to (1) defend the company against criticism or attacks(2) justify actions which may have annoyed the employees (3) attack the departee’s views or choice of new company (4) convince the employee to change his mind about leaving.

Retirement: Like a quit a retirement is normally initiated by he employees However, a retirement differs from a quit in a number of ways. Firstly, a retirement usually occurs at the end of an employee’s career. A quit can happen at any time. Secondly, retirements usually result in the retiree’s receiving benefits in the form of provident fund, pension, gratuity encashment of earned leave etc. from the organization. People who quit do not receive these benefits (without minimum qualifying service period in case of voluntary separations). Finally the organization normally plans retirements in advance. HR staff can groom current employees or recruit new ones during the intervening period in a methodical way. Quits are not easy to estimate and plan for. Employees retire from service on account of two reasons.

Compulsory retirement: Government employees retire compulsorily after attaining the age of superannuation (either 58 or 60). In the private sector, the retirements age may well go beyond 60, depending on a person’s ability to perform well in a competitive scenario.

Voluntary retirement: in case of voluntary retirement the normal retirement benefits are calculated and paid to all such employees who put in a minimum qualifying service. Sometimes the employer may encourage the employees to retire voluntarily with a view to reduce surplus staff and cut down labor costs. Attractive compensation benefits are generally in built in all such plans (referred to as golden handshake scheme). To reduce post retirement anxieties companies these days organize counseling sessions, and offer investment related services (e.g. Citibank , Bank of America) Some companies extend medical and insurance benefits to the retirees also e.g. Indian Oil corporation.

Source : HRM


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