© 2004 by Prentice Hall Terrie Nolinske, Ph.D. 6 - 1 6 Managing Employee Separations, Downsizing,...
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© 2004 by Prentice Hall Terrie Nolinske, 6 - 1 6 Managing Employee Separations, Downsizing, and Outplacement
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Transcript of © 2004 by Prentice Hall Terrie Nolinske, Ph.D. 6 - 1 6 Managing Employee Separations, Downsizing,...
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 1
6Managing Employee Separations, Downsizing, and Outplacement
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 2
HR Challenges…
• What are voluntary and involuntary separations?
• What are fair and effective HR policies for separations, downsizing, and outplacement?
• How can legal issues be minimized in separations?
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 3
Human Resource Replacement Costs
Recruitment costs
Selection costs
Training costs
Separation costs
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 4
Benefits of Separation…
• Reduce labor costs
• Replace poor performers• Increase innovation
• Opportunity for greater diversity
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 5
Voluntary Separation…
Employee decides,
for personal or professional reasons,
to end the relationship with employer.
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 6
Involuntary Separation…
Employer terminates relationship
with employee due to
economic necessity or poor fit
between employee and organization.
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 7
Alternatives to Layoffs
and Separations
Voluntary Separations
Involuntary Separations
Early Retirement Voluntary Workforce Reduction
Cut Labor Costs by…
Outplacement
Layoffs
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 8
Alternatives to LayoffsChange in Employment Policies
• Reduction through attrition• Hiring freeze• Cut part-time employees• Cut internships or co-ops• Subcontract work to in-house staff • Voluntary time off• Leave of absence• Reduce work hours
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 9
Alternatives to LayoffsChange in Job Design
• Transfers• Relocates• Job sharing• Job rotations• Job enlargement• Demotions
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 10
Alternative to LayoffsChanges in Benefits
• Pay freeze• Cut overtime pay• Use vacation / leave days• Pay cuts• Profit sharing or variable pay
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 11
Worker Adjustment and Retraining Notification Act of 1988
U.S. employers
with 100 or more employees
give 60 days’ advance notice
to employees who will be laid off
from plant closing or
separation of 50 or more workers.
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 12
In the Process of Separation…
• Give as much warning
as possible for layoffs
• Use a private office
• Be clear
• Allow no time for debate
• Maintain the integrity of all
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 13
In the Process of Separation…
• Don’t rush employee off-site unless security is an issue
• Put everything in writing
• Provide outplacement services
away from company
• Express appreciation, as appropriate
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 14
Goals of Outplacement
• Reduce morale problems of
employees about to be laid off
• Minimize litigation
• Assist separated employees in
finding comparable jobs quickly
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 15
Exit Interviews
• Use skilled interviewers; assure confidentiality
• Ask open-ended questions; avoid interrogation
• Respond to employees’ comments
• Explain how HR will follow-up
© 2004 by Prentice Hall Terrie Nolinske, Ph.D.
6 - 16
Case
As a member of the management team, you are involved in an upcoming layoff at “Storage Way”. This is the 4th layoff and will reduce the number of staff another 40%, to 38. The layoff will hit sales and marketing hardest, along with engineering.
How will you develop and implement the layoff plan?
