SEPARATION PROCESSES IN HUMAN RESOURCE

SUBMITTED TO: SUBMITTED BY :

ANUPMA TRIPATHI JAYPAL SINGH CHOUDHARY MBA SGSITS

TURNOVER

In human resources turnover or Staff turnover or labour turnover is the rate at which an employergains and loses employees.

Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door".

“Employee turnover is the movement of memberAcross the boundary of an organization.”

In human resources turnover or Staff turnover or labour turnover is the rate at which an employergains and loses employees.

Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door".

“Employee turnover is the movement of memberAcross the boundary of an organization.”

TURNOVER

COMPOSITE RATE:

How many people are leaving eachYear turnover = Number of staff leaving per year *100/Average number of year.

Types of Turnover

Four types of turnover:

Voluntary, Involuntary, Functional, Dysfunctional

1) Voluntary turnover consists of employees exercising their free choice to leave.

2) Involuntary turnover consists of separations where an employee unwilling leaves.

3) Functional turnover is when low performing employees leave.

4) Dysfunctional turnover is when high performing employees leave.

TURNOVER EXAMPLE

0%

2%

4%

6%

8%

10%

12%

14%

16%

FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003

Perc

en

t Turn

ove

r

Fiscal Year

Classified Employee Turnover Trend

RETIREMENT

The agreement b/w the employee and employer at the time of emploment specifies the age of retirement of the employee from serviceof the company based on the provision of the labour laws in force of the land or the policies of the company.

-Age of retirement is varied from Organization to Org.

Social Security Act of 1935

Provides old age, survivor’s, disability, and retirement benefits.

Federal payroll tax (7.65%) on both the employer and the employee.

Medicare taxes are 2.9%.

Benefit payments are based on an employee’s lifetime earnings.

Layoff

Layoff: Layoff means the “failure”, “refusal“or “inability” on the part of any employer togive employment to any number of workmen On account of shortage of raw material, accumulation of stock, breakdown of Machinery or for any other reason

Common abbreviations for reduction in force:

RIF -  Reduction in forceERIF -  Layoff notice by email.IRIF - Involuntary reduction in forceVRIF - Voluntary reduction in forceWFR - Work force reduction.

Retrenchment

Retrenchment :Retrenchment means “discharge of surplus labour or staff” by the employer on account of long period of layoff, or rationalization or improved machinery or automation of machines or similar other reasons.

Retrenchmentis separation of employees relatively on permanentBasis by employers due to latter’s inability to provide employment.

Thus organizations retrench employee due to adaption of mordernManufacturing technology,-adaption of robitics in business Operation.-adaption of IT.-Shifting of manufacturing location to less- manufacturing cost centres -economic recession and adverse business condition relevant to a particular company

Retrenchment

ConsultationConsultation

Determine whether Retrenchment Is necessary

Look for alternatives

Decide how to carry out dismissals

Check no discrimination

Implement dismissals

Seek to reduce impact of retrenchment

Content Of Information Disclosed

The type of information to disclose to worker Representatives includes the..

-No of workers likely to be dismissed

-Proposed timeframe for dismissals

-Economic and organisational reasons behind the decision.

-Alternatives to retrenchment that have been considered

Discharge

Discharge :Discharge takes place when management decides that there is a poor fit between an employee and the organization. It could be a result of - poor performance -because of some unacceptable behavior

Terminating an employee is never an easy decision, but it is almost always a necessary one.

Employees who are not performing up to standards affect notonly their own performance but also the performance of others.

Discharging an employee does not need to be difficult, but you must always follow the appropriate guidelines and terminate your employee according to all appropriate federal, state and local regulations.

The Commandments of Employee Discharge

-Review Documentation and Review Discharge Policies and Procedures

-Speak With Human Resources and Your Legal Department

-Prepare Discharge Paperwork and Complete Severanace Package

-Reserve Meeting Room and Invite Other Participants

-Conduct Discharge Meeting and Complete Paperwork.

VOLUNTARY RETIREMENTVOLUNTARY RETIREMENT SCHEMESCHEME

The Voluntary Retirement Scheme (VRS) is the latest mantra of many a corporate and Public sector units.

VRS is a scheme whereby the employee is offered to voluntarily retire from his services before his retirement date.

Subject to certain conditions the company offers VRS to its employees It is the golden route to cut the excess flab.

THE GOLDEN HANDSHAKETHE GOLDEN HANDSHAKE

The most human technique to retrench the employees in the company today is the voluntary retirement scheme.

It is the golden handshake for the employees and the only option today for the companies to downsize their headcount.

The scheme which is formally permittedby the Department of Public Enterprises

Eligibility For VoluntaryEligibility For Voluntary RetirementRetirement

In case of public sector units, employees who have attained 40 years age or completed 10 years of service are eligible for VRS.

LEVEL: AGE:

Junior secretariat Staff 43 Unskilled Labour 40

Skilled Labour 43 Junior Managenment 46

Middle & senior Management 50

Merits of VRS

There is no legal obstacle in implementing VRS – as is predominantly encountered in retrenchment under the labour laws.

It offers to the employee an attractive financial compensation than what is permitted under retrenchment under the law.

Voluntary nature of the schemes precludes the need for enforcement, which may give rise to conflicts and disputes.

It allows flexibility and can be applied only to certain divisions, departments where there is excess manpower. It allows overall savings in the employee costs thus lowering the overall costs

Demerits of VRS

To certain extent it creates fear, a sense of uncertainty among employees.

Sometimes the severance costs are’ heavy and outweigh the possible gains.

Trade unions generally protest the operation of such schemes and may cause disturbance in normal operations.

Some of the good, capable and competent employees may also apply for separation which may cause embarrassment to the managements.

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EXTENT OF SURPLUS

The surplus of human resources is of twoDimensions:

- Surplus of human resources even with existing level of technology

-Surplus of human resources, if the technology is upgraded.

Indian industrial units employ more number of worker compared to that of the foreign Organisation with similar nature and level of Technology.

Consequence of Surplus Manpower: - Surplus of human resources result in high labour cost. -- Surplus of human resources ,high cost of labour and high cost of production reduce the organisation competitive ability--- Surplus labour create Organisational politicies.

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