CHAPTER SIXChapter ObjectivesKey TermsCosts of Employee SeparationsBenefits of Employee SeparationsTypes of Employee SeparationSlide 7Alternatives to Layoffs – Early RetirementAlternatives to Layoffs – Employment PoliciesAlternatives to LayoffsImplementing a layoffWorker Adjustment and Retraining Notification Act of 1988 (WARN)Worker Adjustment and Retraining Notification Act of 1988 (WARN)Implementing a LayoffOutplacementOutplacement Services1-1CHAPTER SIX CHAPTER SIX Managing Employee Separations, Managing Employee Separations, Downsizing and OutplacementDownsizing and Outplacement1-2Chapter ObjectivesChapter 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Design HRM policies for downsizing that are alternatives to layoffs and develop a layoff program that is effective and fairReview Key TermsAttritionEmployee separationsExit interviewsHiring freeze Involuntary separation Outplace assistance Turnover rate Voluntary separation1-3Key TermsKey TermsEmployee separationsThe termination of an employee’s membership in an organization.Turnover rate The rate of employee separations in an organization.1-4Costs of Employee SeparationsCosts of Employee SeparationsThe costs of employee separationsThe costs of employee separationsRecruitment costsRecruitment costsSelection costsSelection costsTraining costsTraining costsSeparation costsSeparation costsSeverance paySeverance payExit interviewsExit interviewsOutplace assistance Outplace assistance1-5Benefits of Employee SeparationsBenefits of Employee SeparationsThe benefits of employee separationsThe benefits of employee separationsReduced labor costsReduced labor costsReplacement of poor performersReplacement of poor performersIncreased innovationIncreased innovationOpportunity for greater diversityOpportunity for greater diversity1-6Types of Employee SeparationTypes of Employee SeparationVoluntary separationVoluntary separation A separation that occurs when an employee decides, A separation that occurs when an employee decides, for personal or professional reasons, to end the for personal or professional reasons, to end the relationship with the employer.relationship with the employer.QuitsRetirements1-7Types of Employee SeparationTypes of Employee SeparationInvoluntary separationInvoluntary separation A separation that occurs when an employer decides to A separation that occurs when an employer decides to terminate its relationship with an employee due to a poor fit terminate its relationship with an employee due to a poor fit between the employee and the organization or economic between the employee and the organization or economic necessity necessity DischargesDischargesOccur when a firm decides there is a poor ‘fit’ between an employee and a Occur when a firm decides there is a poor ‘fit’ between an employee and a the organization the organization Layoffs - downsizing and rightsizingLayoffs - downsizing and rightsizing DownsizingDownsizingStrategy by a company to reduce scale and scope of its business to Strategy by a company to reduce scale and scope of its business to improve its financial performanceimprove its financial performanceRightsizingRightsizingReorganization of a company’s employees to improve efficiencyReorganization of a company’s employees to improve efficiency1-8Alternatives to Layoffs – Early RetirementAlternatives to Layoffs – Early RetirementFeatures of early retirement policiesFeatures of early retirement policiesPackage of financial incentives that make it attractive for Package of financial incentives that make it attractive for senior employees to retire earlier than they had planed senior employees to retire earlier than they had planed ‘‘Open window’ that restricts eligibility to a fairly short period Open window’ that restricts eligibility to a fairly short period of time of time Avoiding problems with early retirementsAvoiding problems with early retirementsA longtime employee who has performed satisfactorily over A longtime employee who has performed satisfactorily over many years suddenly receives an unsatisfactory performance many years suddenly receives an unsatisfactory performance evaluationevaluationA manager indicates that senior employees who do not take A manager indicates that senior employees who do not take early retirement may lose their jobs anyway because a layoff is early retirement may lose their jobs anyway because a layoff is likely in the near futurelikely in the near futureSenior employees notice that their most recent pay raises are Senior employees notice that their most recent pay raises are quite a bit lower than those of other, younger workers who are quite a bit lower than those of other, younger workers who are not eligible for early retirement not eligible for early retirement1-9Alternatives to Layoffs – Employment PoliciesAlternatives to Layoffs – Employment PoliciesAttrition Attrition An employment policy designed to reduce the An employment policy designed to reduce the company’s workforce by not refilling job company’s workforce by not refilling job vacancies that are created by turnover.vacancies that are created by turnover.Hiring freeze Hiring freeze An employment policy designed to reduce the An employment policy designed to reduce the company’s workforce by not hiring any new company’s workforce by not hiring any new employees into the company.employees into the company.1-10Alternatives to LayoffsAlternatives to LayoffsChanges in Job DesignReallocation and relocationBumpingJob SharingPay and Benefit PoliciesPay freezesCut overtimeUse vacation time and leave daysPay cutsRetraining1-11Implementing a layoffImplementing a layoffLayoff The elimination of jobs, often without regard to employee performance, usually when a company is experiencing financial difficulties. Also may occur if a company is changing its corporate strategies. Notifying employeesWorker Adjustment and Retraining Notification Act of 1988 (WARN)1-12Worker Adjustment and Retraining Worker Adjustment and Retraining Notification Act of 1988 (WARN)Notification Act of 1988 (WARN)Worker Adjustment and