Introduction to

Human Resource

Management

Class 10

Class Overview

This class, the topic of managing employees

(including separations, downsizing, and

outplacement) will be addressed.

Throughout this class, students will begin to

review the benefits and drawbacks

associated with separations, early retirement

policies, layoffs, etc.

Employee Separations

“An employee separation occurs when an

employee ceases to be a member of an

organization.”

There are a number of reasons for employee

separations - both voluntary and involuntary.

Issues Associated with Employee

Separations

Cost of Turnover

– Recruitment• Advertising, resume screening, interviewing, onboarding.

– Lost productivity• Uncompleted tasks or departmental pressures

– Stress on coworkers and managers• “Filling” in for the employee until a replacement is

found.

– Training• Time associated with onboarding and training new

applicants.– HR time and departmental time

Formula for Turnover Costs

“Employee turnover costs are often

described with generic numbers such as

“$X,000.00 per employee” or “X% of annual

salary” (actual dollar amounts and

percentages vary from source to source).”

Turnover by Employee Pay

Less than $30,000

“High turnover, lower-paying jobs (those under $30,000 a year) are slightly less expensive to replace, at only 16 percent of annual salary, but that still adds up quickly.”

Less than $50,000

“For all jobs earning less than $50,000 per year, or more than 40 percent of U.S. jobs, the average cost of replacing an employee amounts to fully 20 percent of the person's annual salary.”

Above $50,000

Costs significantly increase! “While the costs of losing a "normal" employee are high enough, CAP found that the cost of losing an executive is astronomical -- up to 213 percent of the employee's salary. ”

Types of Separations

• Voluntary - When an employee decides to

leave.

• Involuntary - When an employee’s

relationship is terminated.

Video - Voluntary Separation -Knowing When to Leave Your Job

Please click on the link above regarding signs of when to leave

your job.

Voluntary Separation

Employees leave the workplace for a number of reasons. Voluntary and involuntary separation are two different spectrums of employment separation.

Reasons for voluntary separation can include:– Retirement

– New opportunity

– Relocation

– Dislike of position, organizational culture, coworkers, etc.

– Resignation

Involuntary Separations

There are a number of reasons why employees

are asked to leave their position, which include:

– Poor job performance

– Inability to successfully complete job tasks

– Engaging in unethical, illegal, or immoral conduct

– Violation of organizational policies

– Termination of role

– Excessive tardiness and absenteeism

– Conflict of interests

Video - Involuntary Separation

Please click on the link above regarding involuntary separation tips.

Termination ChecklistPre-termination

– Review employee’s files for post-employment obligations.

– Get IT involved.

– Carefully choose a location and time.

During the Termination– Explain to employee that his computer access has been

cut off.

– Get company property back.

– Ask about discrimination.

Post-termination– Arrange for personal item pick-up.

– Give employee a termination letter.

– Give worker his final paycheck.

Termination Mistakes to AVOID

Before terminating an employee, it is

important to review the termination checklist,

as presented in the previous PPT slide, and

to do the following:

– Explain why the employee is being terminated

– Handle terminations in a similar manner (no

difference between employees).

– Treat the employee well.

– Not taking action (i.e., not firing).

Preventing Unemployment Claims

Unemployment claims can be costly in terms

of money and time. Therefore, preventing

unnecessary unemployment claims is

important. Remember to do the following:

– Have Clear Written and Signed Policies

– Document Violations

– Conduct a Termination Meeting

– Dealing with Unemployment (handle ASAP)

Layoffs

“A layoff is the elimination of a position, the

reduction of a position's percent time, or a

reduction of the number of months the

position works annually due to a lack of

work, a lack of funds and/or because of a

reorganization.”

Managing Layoffs - Legal Issues to Consider

There are a number of legal issues for employers to consider when laying off employees. These legal issues will be further discussed in the next video slide.

– Worker Adjustment and Retraining Notification Act (WARN Act)

– Family and Medical Leave Act (FMLA)

– Uniformed Service Employment and Reemployment Rights Act (USERRA)

– COBRA

Video - Layoffs

Please click on the link above regarding employee layoffs.

Layoff versus Termination

As described in the video, there is a major

difference between laying off an employee and

terminating an employee. When in doubt,

remember to consult legal expertise regarding

how to properly layoff versus terminate.

An inability to effectively classify a LAYOFF

versus a TERMINATION can lead to legal

trouble.

Rightsizing

“Flexible rightsizing involves a variety of

practices that have served many

organizations as an alternative to (or a step

to be taken before or in conjunction with) job

cuts.”

Examples of Flexible Rightsizing

There are a number of ways to rightsize in your organization. Please see below:

– Furloughs - voluntary and/or mandatory, time off without pay taken as occasional days or in chunks of time

– Reduced work classes - voluntary and/or mandatory reduction in work hours and salary which may include temporary reduction in benefits, such as 401(k) matching funds flexible rightsizing as a cost-effective Alternative to layoffs

– Sabbaticals - voluntary and/or mandatory unpaid or partially paid leaves of absence or time off, usually for a specified period of classes or months

– Telework - working some or all of one’s standard hours from an off-site location (often at home), which is associated with increased productivity, job satisfaction, reduced utility and real estate costs.

– Pay cuts - voluntary or mandatory pay reductions for some or all of the workforce (often more significant contribution at the top ranks)

Long Term Effects of Organizational Changes

• Change in culture

• Morale issues

• Workplace insecurity

• Loss in productivity

• Lack of trust / respect for employer

• Loss of organizational loyalty

• Operating under fear

The Show Must Go On

It is the responsibility of the HR Department, leaders, management, etc., to promote a

culture of production and trust by addressing aspects of why the layoff or termination

occurred.

By effectively addressing the issue and promoting transparency, employees are

more likely to move onward in their roles.