gomez_mhr05_im_06 - Part Three Chapter 6 Managing Employee...

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Part Three Chapter 6 Managing Employee Separations, Downsizing, and Outplacement CHAPTER OVERVIEW (PPT 6.1- 6.2) Conducting a termination or layoff is one of the most sensitive and difficult things that a manager will ever have to do. There are a number of factors to consider when conducting this process, and the manner in which the termination or layoff is performed and managed has impact on not only the affected employee but also those that remain with the organization in its aftermath. Additionally, many separations (voluntary or involuntary) can be avoided through good management practices. The cost of separations to the organization are much higher than many people realize, making good management practices even more important. ANNOTATED OUTLINE I. What Are Employee Separations? (PPT 6.3- 6.6) An employee separation occurs when an employee ceases to be a member of an organization. The rate of employee separations in an organization (the turnover rate) is a measure of the rate at which employees leave the firm. A. The Costs of Employee Separations There are always costs associated with employee separations. The cost may be more or less, depending on whether managers intend to eliminate the position or to replace the departing employee. Costs included in separations include: 1. Recruitment costs. 2. Selection costs. 3. Training costs. 4. Separation costs. B. The Benefits of Employee Separations 80
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Part Three While many people understand the costs of employee separations, there are benefits as well. Some of the benefits of separations include: 1. Reduced labor costs. 2. Replacement of poor performers. 3. Increased innovation. 4. Opportunity for greater diversity. II. Types of Employee Separations (PPT 6.7- 6.8) Employee separations can be divided into two categories based on who initiates the termination of the employment relationship. Voluntary separations (quits and retirements) are initiated by the employee. Involuntary separations (discharges and layoffs) are initiated by the employer. A. Voluntary Separations 1. Quits. 2. Retirements. B. Involuntary Separations Involuntary separations occur when management decides to terminate its relationship with an employee due to economic necessity or a poor fit between the employee and the organization. 1. Discharges. 2. Layoffs. 3. Downsizing and rightsizing. III. Managing Early Retirements (PPT 6.9- 6.10) When a company realizes that it needs to downsize its scale of operations, its first task is to examine alternatives to layoffs. One of the most popular of these methods is early retirement. A. The Features of Early Retirement Policies Early retirement policies consist of two features: (a) a package of financial incentives that make it attractive for senior employees to retire earlier than they planned and (b) an open window that 81
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Chapter 6 restricts eligibility to a fairly short period. After the window is closed, the incentives are no longer available to senior employees. B.
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gomez_mhr05_im_06 - Part Three Chapter 6 Managing Employee...

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