Managing Employee Separations Downsizing and Outplacement Chapter 6

Managing Employee Separations, Downsizing, and Outplacement Chapter 6 Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -1

Chapter 6 Overview § § § Costs and benefits associated with employee separations. Differences between voluntary and involuntary separations. Issues in the design of early retirement policies. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -2

Chapter 6 Tactical Issues § § § Alternatives to layoffs Layoffs that are effective and fair to all stakeholders. Significance/value of outplacement programs. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -3

What Are Employee Separations? § Separation—termination of an employee’s membership in an organization for whatever reason § Turnover rate—rate of employee separations/year in an organization Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -4

Costs of Employee Separations Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -5

Possible Benefits of Employee Separations § § Reduced labor costs Replacement of poor performers Increased innovation Opportunity for greater diversity Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -6

Types of Employee Separations § Voluntary separation—the employee ends the relationship with the employer § Quits vs. Retirements § Avoidable vs. Unavoidable § Functional vs. Dysfunctional § Replaceability issues § Involuntary separation—the employer terminates the employment relationship § Discharges [firing] § Layoffs, downsizing, and rightsizing Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -7

Managing Early Retirements § Features of early retirement offers: § Financial incentives package usually based on org. level and/or time with org. § S/b carefully restricted to target group § Must be managed carefully [e. g. , w/ OWBPA releases drafted by outside legal counsel!] Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -8

Managing Layoffs Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -9

Alternatives to Layoffs Attrition n Hiring freeze n Not renewing contract workers n Encourage voluntary time off n Redesign jobs n Transfers and Relocations n Job sharing n Freeze or cut pay n Retrain/reassign workers n Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -10

Implementing a Layoff § Notify employees § § Worker Adjustment and Retraining Notification Act (WARN)— 60 days notice or pay in lieu of notice Develop Layoff Criteria § Seniority vs. Pay vs. Performance [hybrid? ] § Communicate to laid-off employees § Face-to-face [but don’t argue] § S/b scripted by HR and/or legal counsel § Middle of the week [? !] Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -11

Implementing a Layoff § § § Coordinate media relations Maintain security Reassure survivors of the layoffs § Listen to survivors’ concerns § Show you appreciate their work [consider retention bonuses to key staff] § Reassign to new projects ASAP Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -12

Outplacement Program for separated employees: § § § Provide job search/transitional assistance S/b offsite for security and psychological purposes § Assist separated employees in finding comparable jobs as quickly as possible § Minimize litigation/workplace violence by separated employees Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -13

Concluding Comments: Develop a written plan w/ layoff criteria n Make sure PAs are valid and up-to-date n Scrutinize policies, train supervisors to avoid discriminatory terms or implications n Screen interim results for adverse impact n Exit interviews: n n Explain outplacement/COBRA benefits n Remind re: NDAs & proprietary information [ongoing duty not to disclose] Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 6 -14