TOPIC 6

6.0 EMPLOYEE SEPARATION

 

Trainee should be able to;

• -Explain the concept of separation
• -Discuss various separation methods
• -Explain the separation process for each method
• -Discuss the factors that lead to employee separation

 

6.1 Concept of Separation

Meaning

An employee works for an employer and gets paid for his work and nothing else. The relation of an employer and employee has a beginning; they stay together for a while and then they separate. Beginning of the relation is called as recruitment process or talent acquisition that passes through selection phase and followed by induction. Staying together in the relation comprises the various phases such has performance management; career management; professional growth; development and etc. And the final stage of the relation is the separation.

 

Employee Separation is the process of ensuring that an employee who quits the company is exited in a structured and orderly manner. The process of employee separation is taken quite seriously by many firms and there is a dedicated department to handle employee exits from the company. “Separation of employment” is also broadly defined as the process of managing the termination of employment, whether involuntary (such as discharge, layoff, plant closure, disability or death) or voluntary (such as resignation, job abandonment or retirement.

6.2  Separation Methods

There are numerous reasons for an organization to handle employee separation in an ethical, rational and consistent fashion. Separation affects recruiting, retention, employee relations, morale and productivity. In addition, numerous legal risks arise whenever an employer fires an employee. There are differing practical and legal considerations depending on the type of separation. Given the particular circumstances, an employee who is involuntarily terminated may take legal action against the employer. There are a many causes of action against the employer in involuntary terminations, so employers should plan and implement these types of termination with the utmost care.

 

It is therefore important to include an employee separation process in a policies and procedures handbook as it can help an organization to avoid legal problems, improve upon the performance of its managers and make sure the organization takes the appropriate steps leading up to the departure of an employee. It is a good idea to use an employee checklist or worksheet to list the steps in the process.

 

Separation Methods

Employee separation methods include; Retirement; Death; Layoffs, redundancy, retrenchment; Discharge/dismissal and resignation. Some of these methods are voluntary and others involuntary. Voluntary separation is when the employee quits the company on his or her own accord. This is the most common form of employee separation though in these recessionary times, involuntary separation or the act of asking the employee to leave by management is quite common. This form of employee separation where an employee is asked to quit is called involuntary separation. The difference in these two forms of separation is that for voluntary exits, the employee stands to get most of the benefits and perks due to him or her whereas when an employee is asked to leave, he or she might get a separation package or in instances where disciplinary or performance related exits take place, the employee might not get anything at all.

 

Steps in Separation

1. a) Steps in Voluntary Terminations

Voluntary termination of employment occurs when an employee informs his or her supervisor of the employee’s resignation or when an employee is abscond his work. In most cases, the procedure for voluntary terminations involves the employee providing a written resignation letter to his or her manager. The Employees is requested to provide a minimum notice outlined in his employment contract of their intention to separate from the company to allow a reasonable amount of time to transfer ongoing workload. Upon receipt of an employee’s resignation, the manager will notify the human resource (HR) department by sending a copy of the resignation letter or notification to HR and any other pertinent information (e.g. employee’s reason for leaving, last day of work).The HR administrator will coordinate the employee’s out-processing. This process will include: The employee’s returning all company property (e.g. keys, ID cards, parking passes); a review of the employee’s post-termination benefits status; and the employee’s completion of an exit interview.

 

Once a company learns about a voluntary separation, it should give the employee a list of tasks to complete to tie up any loose ends, monitor or restrict the employee’s emails and seize the employee’s virtual and physical files before she can delete or take them. The employee should receive her final paycheck on her last day of work.

 

When an employee absconds, he quits without notice or reason. In some instances, an employee may simply not show up for work or hand in the organization’s property. In such an event, an organization should attempt to call the employee to learn more about the situation. If managers cannot contact the employee, they should mail three separate letters in an attempt to communicate, immediately confiscate the items in his work station, begin to analyze his emails and stop his pay. If the employee possesses items that belong to the company, it may need to seek the help of the police and lawyers to recover them.

1. b) Steps in Involuntary Terminations

An involuntary termination of employment is a management-initiated dismissal. The inability of an employee to perform the essential functions of his or her job with or without a reasonable accommodation may also result in an involuntary termination. An employee may also be discharged for any legal reason, e.g., misconduct, tardiness, absenteeism, unsatisfactory performance or inability to perform.

 

Before any action is taken to discharge an employee, the employee’s manager must request a review by the termination review board, which consists of HR department and the employee’s department head. The termination review board will be responsible for reviewing the situation and determining if discharge is warranted. If the board recommends discharge, the employee’s manager and an HR representative will notify the employee.

 

Before discharging an employee, a company must take care to document the incidents or events that led to the decision to terminate the worker. When the appropriate managers notify the employee of their decision, they should immediately confiscate the items the company owns that are in the employee’s possession, including ID cards, access cards, business cards, company files, uniforms and computers. Upon notification of this decision, the employee should receive a termination letter that clearly states the reasons for the termination, along with a final paycheck.

In the event of layoffs or downsizing, it is important to let an employee know if the separation is with or without prejudice to indicate if there is a possibility that she can have her job back if it becomes available. Employers should also not use manipulative tactics to make an employee quit in lieu of having to fire her. The employee may perceive such actions as harassment, discrimination or retaliation, and the actions may be illegal in your state.

 

Retirement

Retirement may be defined as the exit from an organisation or career path, taken by individuals after middle age and with an intention of reducing psychological commitment to work. There are two types of retirement:  Mandatory retirement also known as fixed/compulsory retirement. This form of retirement employees are compulsorily retired after attaining the retirement age set by organisation or the law; and voluntary/ flexible retirement which refers to the type of retirement where organisations allow employees to retire voluntarily before attaining the mandatory retirement age. Early retirement may be on medical grounds or inducement to retire under structural adjustment programmes e.g. Golden handshakes.

The Benefits of Mandatory Retirement include: It is simple to administer with no complications to prove that older people no longer meet the job requirements; Openings are created to which younger employees can advance; Human resource planning is facilitated when retirement schedules are known; and It stimulates employees to make plans for retirement in advance of a known date. The Disadvantages of Mandatory Retirement are: Fixed retirement age will often lead to a ‘short time’ attitude in the years just prior to retirement ‘short timers’ tend to be less committed to the organisations challenges or problems and may even ‘retire’ on the job; and Fixed retirement age may also lead an organisation to suffer losses or lower productivity when there highly experienced personnel leave.

Managing the Retirement Process

This involves designing programmes intended to prepare prospective retirees prior to and after retirement. Pre-retirement programmes are basically conducted with the intention of reducing anxiety associated with retirement. Lack of pre-retirement programmes for employees to prepare employees psychologically and emotionally may lead to damage of their physical and mental health. Pre- retirement programmes in terms of counseling are therefore given to educate employees on the benefit of retirement and also actively facilitate effective transition from the working to the retirement role.

 

The following instructional devices are used in administrating a pre-retirement programme:

• Organizing group meetings where expert speakers are invited to speak on certain areas e.g. a lawyer to speak on estate taxes, a doctor to speak on health problems of senior citizens, a state employment service represented to speak on availability of part time jobs etc.
• Meetings may be held with former retirees for an informal exchange on the problems of switching roles
• Work sessions are conducted where a potential retiree is asked to fill out a personal affairs check list so that retirement income can be estimated. In relation to that income a prospective budget can be worked out.
• Some organisations may provide access to a library with materials on retirement as well as subscribing to publications on retirement planning.
• In large organisations specialized counselors may be provided to counsel individuals on problems of adjustment.
• Training programmes may be conducted for running small business.

 

Pre-retirement programmes can be beneficial for the organisation and society. The organization benefits in that Successful retirees are walking ambassadors of goodwill for the organisation and Productivity of prospective retirees prior to retirement are enhanced because of the lessening of anxiety about the future. The society benefits because retirees possess a valuable societal resource, Programmes inform prospective retirees of places where they can continue to serve in their free time in voluntary organisation which enhance society’s wealth and the Programs that enable greater self-reliance and self-sufficiency in financial planning do much to reduce the burden of the society for taking care of old age citizens.

Layoffs, Redundancies, Retrenchment

Layoffs refer to the release of a qualified employee who is no longer needed by the organisation. Layoff may be temporary or permanent. Redundancy occurs when workers no longer needed by the organisation are laid off. Redundancy may also occur when the employer has ceased or intends to cease carrying out the business. Under redundancy employees are paid terminal dues in accordance with the statutory requirements individuals may be declared redundant when his position is no longer needed by the organisation as a result of major restructuring. Retrenchment: is the humanly way of carrying out redundancy. It does not always result after ceasing business but it can result out of the need to improve business. Under retrenchment programme employees are paid enhanced retirement packages and pension/provident fund provided they have the minimum years of qualifying service. Retrenchment is usually done when there is surplus staff. The possible selection criteria for the staff to be retrenched may be; age, skills/professional qualifications, last in first out (LIFO), Work performance or discipline

 

Death of an Employee

A termination due to the death of an employee will be made effective as of the date of death. Upon receiving notification of the death of an employee, the employee’s manager should immediately notify the benefits administrator. The benefits administrator will process all appropriate beneficiary payments from the various benefits plans.

 

Final Pay

An employee who resigns or is discharged will be paid all his dues, less outstanding loans, advances or other agreements the employee may have with the company. In cases of an employee’s death, the final pay due to that employee will be paid to the deceased employee’s estate. The employee’s manager should ensure that the payroll office receives the deceased employee’s timecard.

 

6.3 Separation Process

Components of the Employee Separation Process

The employee separation process starts from the time the employee gives notice to his or her employer about the intention to quit. This is usually called “putting in one’s papers” because in earlier times, an employee was required to submit a formal resignation letter, though in recent times, this is being done by email. Once the employee gives notice, all the financial transactions and records of the employee are “frozen” by the HR department and the employee’s manager is tasked with the process of ensuring proper handover and closure of work tasks allotted to the employee. Usually, the notice period ranges from a month to two to three months depending on the employment contract. Further, there has to be a well-defined handover plan drawn up by the employee’s manager that covers all aspects of closing out on the work that the employee is performing.

 

Participants in the Employee Separation Process

Typically the employee separation process proceeds along two parallel tracks. One involves the employee and the manager and is concerned with the handover of work and other tasks. The other track is by the separations team and deals with the employee benefits accruing as a result of separation as well as other benefits like Provident Fund, Gratuity (If applicable) etc. The HR manager is needed at all steps of this process and in the final exit interview that is conducted to assess the reasons for the employee leaving the company and taking the employee’s views on work and the company in general as well as any “de-motivating” factors that might have caused the employee to resign.

Exit interview

An exit interview is a survey conducted with an individual who is separating from an organization or relationship. Most commonly, this occurs between an employee and an organization. An organization can use the information gained from an exit interview to assess what should be improved, changed, or remain intact. More so, an organization can use the results from exit interviews to reduce employee turnover and increase productivity and engagement, thus reducing the high costs associated with turnover. Some examples of the value of conducting exit interviews include shortening the recruiting and hiring process, reducing absenteeism, improving innovation, sustaining performance, and reducing possible litigation if issues mentioned in the exit interview are addressed. It is important for each organization to customize its own exit interview in order to maintain the highest levels of survey validity and reliability.

 

The exit interview is the last stage of the employee life cycle (ELC) and spans from the moment an employee becomes disengaged until his or her departure from the organization. This is the key time that an exit interview should be administered because the employee’s feelings regarding his or her departure are fresh in mind. An off-boarding process allows both the employer and employee to properly close the existing relationship so that company materials are collected, administrative forms are completed, knowledge base and projects are transferred or documented, feedback and insights are gathered through exit interviews, and any loose ends are resolved.

6.4 Factors That Lead To Employee Separation

The factors that lead to employee separation depend on the cause/ method of separation and can be outlined as follows:

a)Retrenchment

Factors leading to retrenchment include:

• Poor business performance owing to decline in market share. This may be due to competitive pressure from competitors among other reasons.
• Poor management and inadequate planning
• Business mergers, takeovers and divestments.
• Introduction of high performance work systems which may entail
• Employment of multi skilled personnel capable of increasing productivity and responding to change.
• Introduction of new method of production
• Introduction of organisation structures designed to enable quick decisions fast responses and empowered employees.

1. b) Resignation

This is the most common way of separation. Employee leaves his job and employment with his employer to pursue better opportunities; a better position at a better compensation package in a branded company (or better known company) in a same city and country or in a different city or different country. So, an employee resigns for:  Better compensation and benefits; Higher position / level; Challenging role; To move from an unknown or lowly branded company to a highly branded and reputed company (Top 10 or 25 companies in the world etc.); and   For foreign or international assignments

1. c) Termination

Usually, this process is perceived negatively by employees. In termination, an employer uses his right to terminate the contract of an employment. There can be many reasons for an employer to terminate the contract of employment but some of the common reasons are: Non-Performance, Indiscipline, Misconduct, Insubordination, and theft etc.

d)Absconding

This is one of the most unethical, unexpected and unprofessional way to terminate the contract of an employment. Employees can abscond in either or all of the below mentioned circumstances / situations:

• After stealing the confidential information or documents or database from the company
• If the employee intendeds to commit a crime
• If there is a work-pressure and stress and the individual is not able to cope-up with it
• If the employee has committed any crime outside the office and after working hours (such as murder or getting involved in terrorist activities or theft or any other civil crime)
• When priorities are different e.g. Employee has asked for leave due to some urgency at his home (or might be he is trying to escape from his work responsibilities) and at the same time his team also needs him in the office and his leaves are not approved.
• If he has got some exceptionally good opportunity that requires him to join immediately and he feels that the process of separation in his company is a bit too complicated. He assumes few things and do not really try to face the challenge.
• Employees that abscond have different personalities. They are low in confidence. They are too weak to face the reality and challenges of life. They feel that running away from the problem is as good as solving the problem. They are cowards to take the problems head-on.

6.5 Review Questions

1. Explain four instructional devices that are used in administration of employee per-retirement programme
2. Outline the steps used in voluntary separation of an employee
3. Define the term employee separation
4. Discuss the factors that may lead to retrenchment of an employee
5. State five reasons that may make an employee to abscond from employment

 

References

1.Armstrong,M.,(2006), A Handbook of Human Resource Practice (10^th Ed),Koganpage.London

2. Dessler& Cole (2011), Human Resources Management in Canada (11^th Ed) Pearson Canada Inc.

3.Joshi, M.,(2013),Human Resource Management (1^st Ed), Manmohan. Bookboon.com