retention & seperation
TRANSCRIPT
Turnover – Retention – Separation – Transfers & Promotions
Module - V
M. BahalX. FernandesA. BarretoS. ChatterjeeG. Mishra
Turnover&
Retention
"how long employees tend to stay" or "the rate of traffic through the revolving door".
Attrition may refer to the gradual reduction of the size of a workforce by not replacing personnel lost through retirement or resignation.
Employee Attrition Rate also known as Turnover is the rate at which an employer gains and loses employees.
Turnover is measured for individual companies and for their industry as a whole.
High turnover may be harmful to a company's productivity.
Turnover
Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time.
Retention
Hiring is not an easy process - Recruiting the right candidate is a time consuming process.
Importance of Retention
An organization invests time and money in grooming an individual and make him ready to work and understand the corporate culture - Finding a right employee for an organization is a tedious job and all efforts simply go waste when the employee leaves.
When an individual resigns from his present organization, it is more likely that he would join the competitors - In such cases, employees tend to take all the strategies, policies from the current organization to the new one.
important data information
ClientsNon – Compete Agreement
It has been observed that individuals sticking to an organization for a longer span are more loyal towards the management and the organization
It is essential for the organization to retain the valuable employees showing potential
Bonus – Higher Salary – Promotion ….
Don’t question my loyalty. I bleed Pearson Hardman
Separation
Retention … hmmm …
Retention is fine, but …
Why the heck are they leaving ???
What causes separations to really
occur
Separation occurs when an employee leaves the organization.
But the question is ….
Separations
Voluntary Involuntary
SEPARATION
Voluntary separations occur when the employee decides to terminate his or her relationship with the organization.
In involuntary separations, employers resort to terminate employment contracts with employees for atleast three reasons :
Voluntary
Involuntary
• Organization is passing through lean period and is unable to maintain the existing labour.
• Initial faulty hiring resulting in mismatch between job and employee fit
• Employee exhibits deviant behaviour vitiating the environment around.
In the former, initiation for separation is taken by the employee himself or herself.
Where the employer initiates to separate an employee, it becomes involuntary separation. In the latter, the employee entertains the feeling of injustice and seeks legal protection to undo it.
Separations
Voluntary Involuntary
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffsDismissalRetrenchment
VRSRightsizing
Separations
Voluntary Involuntary
Quits/ResignationRetirements
Causes for Separation
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Quits / Resignation An employee decides to quit when his or her level of dissatisfaction with the present job is
high.
JOBsupervision
company policy
compensation
advancement opportunities
Intrinsic factors
A resignation refers to the termination of employment at the instance of the employee. An employee resigns when he or she secures a better job elsewhere.
During economic boom, jobs are available in plenty. Competent people will get multiple offers at any given time.
Nope .. Not gonna quit.
Other reasons for resignation may be due to spouse relocation after marriage or the employee suffering from ill health or some other personal reasons
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Retirements
Causes for Separation
Quits / Resignation DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Retirements
Retirements occurs when employees reach the end of their careers.
Retire?!! .. I’m just 60
Yeah RightKeep dreamin’…
The age for an employee’s superannuation differs :
Some States : 58 Years
Central Government : 60 Years
New Rise of Limit : 60 - 62 Years
(As there are shortage of skilled people to fill up the vacant jobs)
Retirements
Retirements occurs when employees reach the end of their careers.
The age for an employee’s superannuation differs :
Some States : 58 Years
Central Government : 60 Years
New Rise of Limit : 60 - 62 Years
(As there are shortage of skilled people to fill up the vacant jobs)
When the employee superannuates and leaves the organization, he or she carries several benefits with himself or herself. Such a privilege is denied to the employee who quits.
Retirement occurs at the end of and employee’s career but the quit can take place at anytime.
Superannuation shall not leave any soured relationship behind the retiree but a quit is likely to result in hurt feelings with the employer.
Retirements v/s Quits
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Discharges
• A discharge takes place when the employer discovers that it is no longer desirable to keep an employee any longer.
• Discharge, also called termination, should be avoided as far as possible. Any termination is a reflection on the company’s HR system.
• In addition, termination is expensive as the firm must seek replacement, hire and train the hiree.
• Finally, a discharged individual is likely to badmouth about the company. Obviously, discharge needs to be viewed as a last resort.
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
Discharges
LayoffsRetrenchment
VRSRightsizing
Dismissal
Layoffs A layoff is a temporary separation of the employee at the instance of the employer.
Section 2(kkk) of the Industrial Disputes Act, 1947, defines lay-off as the failure, refusal or inability of an employer to give employment to a worker whose name is present on he rolls but who has not been retrenched.
A lay-off may be for a definite period on the expiry of which the employee will be recalled by the employer for duty.
As the Employees are laid off at the instance of the employer, they have to be paid compensation for the period they are laid off.
Section 25 of the Industrial Disputes Act, 1947 makes it mandatory on the part of the employer to pay compensation for all the days of the lay-off. The compensation must be equal to half the normal wages the employee would have earned if he or she had not been laid off.
When a part of a section or department is laid off, the management shall define the basis for laying off individuals. The basis for the lay-off may be basis for the lay-off
SENIORITYMERIT
If merit is the basis, employees with unsatisfactory performance are laid off first. Performance appraisal is essential for the purpose of establishing who is efficient and who is below expectations.
Competence as the basis for lay-off is not possible in unionised companies because of the outright resistance offered by union leaders. In such companies seniority determines who should be laid off first.
Thus the employees with the shortest period of service to their credit are the first laid off and the older employees are retained as long as conditions permit.
Similarly, the basis for recalling the employees as soon as the lay-off is lifted needs to be made clear. After the lay-off, the management seeks to return to the normal production as quickly as possible. Naturally key employees must be the first to be recalled.
basis for recalling
SENIORITY
The seniority system usually specifies that those who were laid off last will be
called back first.
The management may seek to recall junior employees whose skills are essential for the resumption of
production.
MERIT
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
DismissalWhere the termination of employment is initiated by the employer, it is known as dismissal.
The following reasons lead to the dismissal of an employee :
• Excessive absenteeism
• Serious misconduct
• False statement of qualification at the time of employment
• Theft of company’s property
It is a drastic step and should be taken after careful thought. A dismissal needs to be supported by just and sufficient reasons.
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
VRSRightsizing
Dismissal
Retrenchment
Retrenchment
Retrenchment refers to the termination of the services of employees because of the replacement of labour by machines or the closure of a department due to continuing lack of demand for the products manufactured in that particular department of the organization.
If the plant itself is closed, the management and employees have to leave for good.
Retrenchment, like lay-off, entitles the employees to compensation which, in terms of Section 25(f) of the Industrial Disputes Act, 1947, is equivalent to 15 days ‘average pay for every completed year of continuous service.
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
Rightsizing
Dismissal
VRS
Voluntary Retirement Scheme (VRS)
• Beginning in the early 1980s, companies both in public and private sectors, have been sending home surplus labour for good, not strictly by retrenchment, but by a novel scheme called the VRS, euphemistically called the Golden Hand Shake Plan.
Pay hefty sums
Reduce staff strength
• Further, VRS id perceived as a painless and time-saving method of trimming staff strength, easing out unproductive older workers and other deadwood.
• Unions too, cannot object as the schemes are voluntary.
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRSRightsizing
Dismissal
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffs
Retrenchment
VRS
Dismissal
Rightsizing
Rightsizing
Rightsizing theoretically means reducing the size of workforce or increasing it to maintain the employee strength at the most desired level.
In reality, rightsizing means downsizing the employee strength through planned elimination of jobs.
Downsizing is triggered by atleast three factors :
i) The company’s bottom line is threatened
ii) Technological advancement renders people redundant
iii) Organizational restructuring
EXIT INTERVIEWS It is advisable for the HR executive to elicit views of the people who are exiting,
particularly those who are resigning from their jobs.
Exit interviews are conducted to know why employees are quitting, and what circumstances compelled them to do so. They are generally conducted just prior to the employee leaving.
They give feedback about employees’ experiences on the jobs.
The feedback thus obtained shall help strengthen retention strategies.
In addition, interview with the leavers may help retain a competent individual who could otherwise have resigned from his or her job. If an employee can be retained, this is the best time to do so.
Besides, exit interview is an effective PR exercise. Those who leave, as well as those who stay, shall feel
Transfers
Horizontal Movement of Employees
Popularly called transfers, such movement of employees takes place for valid reasons.
Wait … am I being transferred to work with Louis?
A transfer involves a change in the jobs (accompanied by a change in the place of the job) of an employee without a change in responsibilities or remuneration.
Broadly, transfers may be classified into three types :
i) Those designed to enhance training & development.
ii) Those making possible adjustments to varying volumes of work within the firm.
iii) Those designed to remedy the problem of poor placement.
Reasons for Transfers Employees may be surplus because of slackened demand for the products
manufactured by that department / Workers are transferred from the surplus department to another department where there is a shortage of staff / Increased mechanization may render some employees redundant.
Conflict (Incompatibility) between supervisor or co-workers.
Correction of faulty initial placement of an employee.
Change in interests and capabilities of an individual.
Productivity of employee has declined due to monotony of his or her job.
The climate may be unsatisfactory for an employees health.
Family related issues cause transfers, specially among female employees. When they get married the females want to join their spouses, and this fact necessitates transfers or resignations.
Principles of Transfers The frequency and period of transfer should be decided and communicated to the
employees.
Authority which would handle transfers must be clear.
The criteria for transfer must be well documented.
The area of the organization over which transfers can be made needs to be defined.
The effect on pay and seniority must be clearly evaluated.
Transfers should be clearly defined as permanent or temporary.
The performance evaluation of the employee must be done before the transfer and job description should be given to enable the management to know whether the individual fits the new job or needs to be trained.
The interests of the organization are not to be forgotten in framing a policy of transfers.
Types of Transfers
A shortage or surplus of the labour force is common in different departments in an organization.
Production Transfers
Surplus employees in a department have to be laid off, unless they are transferred to another department.
Replacement Transfers Such transfer are intended to avoid imminent lay-offs, particularly of senior employees.
A junior employee may be replaced by a senior employee to avoid laying off the latter.
A replacement transfer programme is used when all the operations are declining, and is designed to retain long-service employees as long as possible.
Such transfers are effected to make employees versatile and competent in more than one scale.
Versatility Transfers
Clerical employees in banks, for example, are transferred from one section to another over a period of time so that they may acquire the necessary skills to attend to the various activities of the bank.
Shift Transfers Generally, industrial establishments operate, more than one shift. Transfers between
shifts are common, such transfers being made are mostly on a rotation basis.
Transfers may also be effected on special requests from employees. Some request a transfer to the second shift or the night shift in order to avail the free time during the day to take up part time jobs, although this is not permitted by law.
These transfers are effected at the request of employees and are therefore called personal transfers.
Remedial Transfers
Remedial Transfers take place because the initial placement of an employee may have been faulty or the worker may not get along with his or her supervisor or with other workers in the department.
The employee may be getting too old to continue in his or her regular job, or the type of job or working conditions may not be well-adapted to his or her health.
If the job is repetitive, the worker may stagnate and would benefit by transfer to a different kind of work.
Promotions
Upward Movement of Employees
Upward movement of employees also know as promotions is common in organizations.
Promotion means an improvement in pay, prestige, position and responsibilities of an employee within his/her organization.
A mere shifting of an employee to a different job which has better working hours, better location and more pleasant working conditions does not amount to promotion.
The new job is a promotion for the employee only when it carries increased responsibilities and enhanced pay.
Purposes of Promotion To motivate employees to ensure higher productivity.
To attract and retain the services of qualified and competent people.
To recognize and reward the efficiency of an employee.
To increase the effectiveness of the employee and of the organization.
To fill up higher vacancies from within the organization.
To build loyalty , morale and a sense of belongingness in the employee.
To provide a career development path to the employees if they perform well.
Principles of Promotion The HRM must make it clear whether to fill up higher positions by internal
promotions or recruit people from outside.
A further decision on determining the basis of promotions should be made by the HRM.
Another point to be made clear about the policy of promotion is whether to promote employees against vacancies or non-vacancies.
Frequent promotions are not a good practice. To the employer, frequent promotions mean a higher wage and salary bill, and a temporary instability in the organization.
The promotion should be preceded by a job analysis and performance appraisal.
Principles of Promotion (contd.)
The promotion policy should be discussed with labour unions, and their acceptance should be obtained in the form of an agreement.
When promotions are made on the basis of competence, openings for promotions should be displayed prominently at several places (e.g.-notice boards) to enable interested people to apply.
Quick Reviewof Module V
Turnover
Retention
Separations
Voluntary Involuntary
Causes for Separation
Quits / ResignationRetirements
DischargesLayoffsDismissalRetrenchment
VRSRightsizing
Promotio
ns
Transfers
Exit Interviews
Oh!! You thought I was gonna thank you?So cute ….