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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.
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