EMPLOYEE

SEPARATION
 Employee
Employee Separation
Separation

•• Reasons
Reasons for
for employee
employee separations
separations
–– Pressures
Pressureson onfirms
firmstotoremain
remaincompetitive
competitiveand
andefficient
efficient
–– Decline
Declineininemployee
employeecommitment
commitmenttotoemployers
employers
•• Importance
Importance of
of managing
managing separations
separations
–– Transitions
Transitionsofofemployees
employeesout
outofoffirm
firmgo
gosmoothly
smoothly
–– Continuing
Continuingoperations
operationsofoffirm
firmnot
notdisrupted
disrupted
–– Important
Importantprofessional
professionalrelationships
relationshipsnot notdamaged
damaged
•• Types
Types of
of separations
separations
–– Reductions-in-force,
Reductions-in-force,turnover,
turnover,and
andretirements
retirements

Copyright © 2005 South-Western. All rights reserved.

 Reductions-in-Force
Reductions-in-Force (RIFs)
(RIFs)

•• Causes
Causes of
of reductions
reductions
–– Restructuring
Restructuringas
asaaresult
resultofofmergers
mergersand
andacquisitions
acquisitions
–– Attempts
Attemptstotomake
makeorganization
organizationmore
morecost
costcompetitive
competitive
–– Adjustments
Adjustmentstotodeclining
decliningbusiness
businessenvironment
environmentconditions
conditions
•• Reasons
Reasons for
for reductions
reductions
–– Inefficiency
Inefficiencyininoperations
operations
–– Lack
Lackofofadaptability
adaptabilityininmarketplace
marketplace
–– Weakened
Weakenedcompetitive
competitiveposition
positionininindustry
industry
•• Methods
Methods for
for dealing
dealing with
with reductions
reductions
–– Continuance
Continuancepay
payand
andoutplacement
outplacementprograms
programs

Copyright © 2005 South-Western. All rights reserved.

 Workforce
Workforce Management
Management Strategies
Strategies

Copyright © 2005 South-Western. All rights reserved.

 Turnover
Turnover

•• Involuntary
Involuntary turnover
turnover
–– Employees
Employeesasked
askedtotoleave
leaveorganization
organizationfor
forcause,
cause,orordue
duetoto
circumstances
circumstancesthat
thatcause
causereduction-in-force
reduction-in-force
•• Voluntary
Voluntary turnover
turnover
–– Employees
Employeeswho
wholeave
leaveorganization
organizationon
onown
owninitiative
initiative
•• ““Beneficial”
Beneficial” turnover?
turnover?
–– Low
Lowperforming
performingemployees
employeesdepart,
depart,and/or
and/ornew
newhigher
higher
performing
performingemployees
employeespromoted
promotedororhired
hiredas
asreplacements
replacements

Copyright © 2005 South-Western. All rights reserved.

 Performance-Replaceability
Performance-Replaceability Strategy
Strategy Matrix
Matrix

Copyright © 2005 South-Western. All rights reserved.

 Strategic
Strategic Management
Management of
of Turnover
Turnover && Retention
Retention

Copyright © 2005 South-Western. All rights reserved.

 Retention
Retention of
of High
High Performers
Performers
•• Critical
Critical HR
HR issue
issue
–– Development
Development ofof policies
policies and
and programs
programs toto
retain
retain high
high performers,
performers, and/or
and/or those
those difficult
difficult
toto replace
replace
•• Employers
Employers face
face competition
competition from
from
–– Other
Other organizations
organizations
–– From
From employees
employees theythey are
are attempting
attempting toto retain
retain
(e.g.,
(e.g., toto start-ups)
start-ups)
Copyright © 2005 South-Western. All rights reserved.
 Retirement
Retirement

•• Retirement
Retirement
–– Creates
Createsadvancement
advancementopportunities
opportunitiesfor
foryounger
youngeremployees,
employees,
and
andoften
oftenreduces
reducespayroll
payrollcosts
costs
–– Can
Cancause
causeloss
lossofofvital
vitalhistorical
historicalknowledge
knowledgeofoforganization,
organization,
industry,
industry,and
andmarketplace
marketplace
–– Part-time
Part-timeand
andconsulting
consultingwork
workcan
canease
easetransition
transitionofofolder
older
workers
workersinto
intoretirement
retirement
 Holding
Holding on
on to
to High
High Performers:
Performers:
AA Strategic
Strategic Approach
Approach toto Retention
Retention
•• Major
Major turnover
turnover trends
trends
–– Increasing
Increasingturnover
turnoverrates
rateshaving
havingsignificant
significantimpact
impacton
on
organizational
organizationalsuccess
success
–– Costs
Costsassociated
associatedwith
withturnover,
turnover,especially
especiallyofofhigh
high
performers,
performers,continues
continuestotoescalate
escalate
•• Why
Why companies
companies fail
fail to
to address
address turnover
turnover issue
issue
–– Pervasive
Pervasivebelief
beliefthat
thathigh
highturnover
turnoverisisinevitable
inevitableininaastrong
strong
economy
economy
–– Failure
Failureofofcompanies
companiestotodevelop
developeffective
effectivestrategies
strategiesforfor
managing
managingemployee
employeeturnover
turnover
 Holding
Holding on
on to
to High
High Performers:
Performers:
AA Strategic
Strategic Approach
Approach toto Retention
Retention

•• Well-planned
Well-planned and
and coordinated
coordinated retention
retention strategy
strategy
–– Selection
Selectionand
andorientation
orientation
–– Training
Trainingand
andcareer
careermanagement
management
–– Motivation
Motivationand
andcompensation
compensation
•• Selection
Selection and
and orientation
orientation
–– Recruitment
Recruitmentpractices
practicesthat
thatfocus
focusononcultural
culturalfitfit
–– Define
Definecritical
critical“success
“successfactors”
factors”for
forjob
job
–– Behavioral-based
Behavioral-basedselection
selectioninterviewing
interviewing
–– Effective
Effectiveorientation
orientation
 Holding
Holding on
on to
to High
High Performers:
Performers:
AA Strategic
Strategic Approach
Approach toto Retention
Retention
•• Training
Training and
and career
career management
management
–– Create
Create learning
learning environment
environment
–– Adopt
Adopt interactive
interactive approach
approach toto training
training &&
development
development
–– Establish
Establish development
development asas line
line responsibility
responsibility
–– Offer
Offer variety
variety of
of development
development opportunities
opportunities
 Holding
Holding on
on to
to High
High Performers:
Performers:
AA Strategic
Strategic Approach
Approach toto Retention
Retention

•• Motivation
Motivation and
and compensation
compensation
–– Many
Manycompanies
companiesare arewilling
willingtotomatch
matchfinancial
financial
offerings
offerings
–– May
Maynotnotbe
bewise
wisetotofocus
focusprimarily
primarilyon
onmoney
money
–– Incorporate
Incorporatenonfinancial
nonfinancialrewards
rewardsinto
intocompensation
compensation
programs
programs
–– Enlist
Enlisthigh
highperformers
performersininsolving
solvingbusiness
businessproblems
problems
–– Recognize
Recognizeemployee
employeeefforts
effortsmore
moreinformally,
informally,more
more
personally,
personally,and
andmore
morefrequently
frequently
 Holding
Holding on
on to
to High
High Performers:
Performers:
AA Strategic
Strategic Approach
Approach toto Retention
Retention

•• Final
Final recommendations
recommendations
–– Design
Design strategies
strategies that
that reflect
reflect particular
particular
situation
situation
–– Evaluate
Evaluate effectiveness
effectiveness ofof efforts
efforts as
as
systematically
systematically as as possible
possible
–– Conduct
Conduct exit
exit interviews
interviews
Strategies
Strategies for
for Responsible
Responsible Restructuring
Restructuring

•• Economic
Economic consequences
consequences of
of employment
employment
downsizing
downsizing
–– Neither
Neitheremployment
employmentnor norasset
assetdownsizing
downsizingstrategies
strategies
yielded
yieldedlong-term
long-termpayoffs
payoffssignificantly
significantlylarger
largerthan
than
those
thosegenerated
generatedby bystable
stableemployers
employers
–– Not
Notpossible
possiblefor
forfirms
firmstoto“save”
“save”oror“shrink”
“shrink”their
theirway
way
totoprosperity
prosperity
–– Prosperity
Prosperitywas
wasonly
onlypossible
possibleby bygrowing
growingbusinesses
businesses
–– Firms
Firmscannot
cannotassume
assumethat thatlayoffs
layoffsare
arequick
quickfix
fix
 Strategies
Strategies for
for Responsible
Responsible Restructuring
Restructuring

•• What’s
What’s different
different about
about current
current layoffs?
layoffs?
–– Healthy
Healthycompanies
companieshoping
hopingtotoreduce
reducecosts
costsand
andboost
boost
earnings
earningsbybyreducing
reducinghead
headcount
count
–– At
Atsame
sametime
timefirms
firmsare
arefiring
firingsome
somepeople,
people,are
arehiring
hiringothers
others
–– More
Moremanagers
managersare arebriefing
briefingemployees
employeesregularly
regularlyabout
about
economic
economicstatus
statusofofcompanies,
companies,which
whichraises
raisesawareness
awarenessandand
prepares
preparesemployees
employees
–– Outplacement
Outplacementcenters
centershave
havebecome
becomenewnewhiring
hiringhalls
halls
 Strategies
Strategies for
for Responsible
Responsible Restructuring
Restructuring
•• Ten
Ten mistakes
mistakes to
to avoid
avoid when
when restructuring:
restructuring:
1.1. Failure
Failuretotobe
beclear
clearabout
aboutlong-
long-and
andshort-term
short-termgoals
goals
2.2. Use
Useofofdownsizing
downsizingas asfirst
firstresort,
resort,rather
ratherthan
thanas
aslast
last
3.3. Use
Useofofnon-selective
non-selectivedownsizing
downsizing
4.4. Failure
Failuretotochange
changeways
wayswork
workisisdone
done
5.5. Failure
Failuretotoinvolve
involveworkers
workersininrestructuring
restructuringprocess
process
6.6. Failure
Failuretotocommunicate
communicateopenly
openlyand andhonestly
honestly
7.7. Inept
Inepthandling
handlingofofthose
thosewhowholose
losejobs
jobs
8.8. Failure
Failuretotomanage
managesurvivors
survivorseffectively
effectively
9.9. Ignoring
Ignoringeffects
effectson
onother
otherstakeholders
stakeholders
10.
10. Failure
Failuretotoevaluate
evaluateresults
resultsandandlearn
learnfrom
frommistakes
mistakes
Strategies
Strategies for
for Responsible
Responsible Restructuring
Restructuring

•• What
What to
to do
do
–– Carefully
Carefullyconsider
considerrationale
rationalebehind
behindrestructuring
restructuring
–– Consider
Considervirtues
virtuesofofstability
stability
–– Managers
Managersmake
makeconcerns
concernsknownknowntotoemployees
employeesandand
seek
seekinput
input
–– Don’t
Don’tuse
usedownsizing
downsizingas as“quick
“quickfix”
fix”totoachieve
achieveshort-
short-
term
termgoals
goalsininface
faceofoflong-term
long-termproblems
problems
–– Be
Besure
sureemployees
employeesperceive
perceiveprocess
processas asfair
fair
Strategies
Strategies for
for Responsible
Responsible Restructuring
Restructuring

•• What
What to
to do
do
–– Make
Makedecisions
decisionsininconsistent
consistentmanner
manner
–– Communicate
Communicateregularly
regularlyand
andininaavariety
varietyofofways
ways
–– Give
Givesurvivors
survivorsreason
reasontotostay,
stay,and
andprospective
prospectivenew new
hires
hiresreason
reasontotojoin
join
–– Train
Trainemployees
employeesand andmanagers
managersininnewnewways
waysofof
operating
operating
–– Examine
Examineall allHR
HRsystems
systemscarefully
carefullyininlight
lightofofchange
change
ofofstrategy
strategyor
orenvironment
environmentfacing
facingfirm
firm
 Retirement
Retirement of
of Older
Older Workers
Workers

•• Mandatory
Mandatory retirement
retirement can
can cause
cause great
great economic
economic
and
and emotional
emotional hardship
hardship to
to many
many older
older workers
workers
•• Shock
Shock of
of compulsory
compulsory retirement
retirement and
and resulting
resulting loss
loss
of
of productive
productive work
work and
and earning
earning power
power may
may lead
lead to
to
impaired
impaired health
health and
and mental
mental well-being
well-being
 Retirement
Retirement of
of Older
Older Workers
Workers

•• Management
Management of of labor
labor shortages
shortages in
in some
some
highly
highly skilled
skilled trades
trades in
in next
next decade
decade will
will
require
require
–– Employment
Employmentstrategies
strategiesthat
thatslow
slowdown
downwithdrawal
withdrawalofof
older
olderworkers
workersfromfromareas
areasofofhighest
highestproductivity
productivityand
and
growth
growthinineconomy,
economy,or or
–– Prevent
Preventtotal
totalloss
lossofofsuch
suchvital
vitalskills
skillsand
andexpertise
expertiseinin
post-retirement
post-retirementperiod
period
 Retirement
Retirement of
of Older
Older Workers
Workers

•• Age-performance
Age-performance relationship
relationship
–– Individual
Individual differences
differences much
much more
more important
important
than
than age
age group
group differences
differences
–– Chronological
Chronological ageage accounts
accounts forfor only
only small
small
percentage
percentage ofof variance
variance inin performance
performance
–– Age
Age and
and performance
performance appears
appears toto bebe
generally
generally unrelated
unrelated