Employee retention and separation are important aspects of managing human resources. Retention involves keeping valuable employees through engagement, compensation and benefits. Separation can occur voluntarily through resignation or involuntarily through termination or layoffs due to poor performance or lack of work. Organizations aim to retain productive workers through training, career development, and ensuring compensation is competitive. Proper procedures and support such as exit interviews and outplacement assistance help make separations efficient and fair for both parties.

1. MODULE V
Managing Employee
Retention and Separation

2. STRATEGIC EMPLOYEE RETENTION
AND SEPARATION
 Employee
retention is the act of
keeping employees and retaining good
workers.
 Employee
separation is the process of
efficiently and fairly terminating workers.

3. Separations - Final way in which an employee
leaves a position
Voluntary – employee resigns
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Exit Interview – pinpoints reasons why an employee is leaving
Involuntary – employee is laid-off or terminated
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Layoffs – there is not enough work for all employees
Termination – employee is asked to leave because of poor

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Employees are a primary asset of almost every organization, but
identifying, hiring, and training good employees can be costly.
Replacing an employee who quits costs an organization between
one and two times the annual salary of the position.
The expense of replacing workers requires most organizations to
focus effort on employee retention, a set of actions designed to
keep good employees once they have been hired
Whereas retaining good employees is beneficial, organizations lose
money when they retain poor employees.
Assuring that nonproductive employees don’t continue with the
organization is often just as important as retaining productive
workers.
Changes in economic conditions and product demand sometimes
force organizations to reduce the size of their workforce.
Employee separation is the process of efficiently and fairly
terminating workers.

5. Procedure of Separation
 Discharge:It is the process of terminating the service of an
employee due to any serious misconduct
It is a permanent separation of an employee from the pay-roll for
violation of company rules or for inadequate performance.
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CAUSES OF DISCHARGE:
a) FREQUENT CAUSES:
 Inefficiency, dishonesty, drunkenness, carelessness.
b) INFREQUENT CAUSES:
 Accidents, insubordination, personal conduct,
 un-cleanliness, infraction of rules, negligence.
c) OTHERS:
 Laziness, lack of cooperation
 Steps
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to discharge an employee
Preliminary disciplinary action
Final written warning
Notice of discharge

6. Discharging an Employee
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Discharging employees is one of the most difficult
tasks that a manager faces.
Many organizations offer outplacement to the
employees laid off.
 Outplacement services provide employees who
have been dismissed from an organization with
assistance in finding new jobs. Examples: resume
writing, practice interviewing and support groups.

7. The Discharge Meeting
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A few guiding principles
1.
Tell the employee directly that she is being
discharged.
2.
Make the meeting brief.
3.
Listen to the employee who is being discharged.
This is an emotional moment, and some
individuals will simply need to talk.
4.
Summarize the meeting in writing, particularly
severance compensation, benefits and services
that will be provide to the employee.
5.
Have security personnel close at hand just in
case the person being terminated vents their
frustration in an violent manner.

8.  Retirement
It is the process of leaving the organization permanently on the
ground of attaining the age of superannuation or voluntarily.
Retirement has been characterized by some as a ‘role less role ‘
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Kinds of Retirement –
1. Compulsory retirement:
Employee must retire compulsory on attaining on specific age.
Central government Offices, the age is 58; In private firm, employees
may be given extension up till they are suitable to do work.
 2. Forced Retirement:
If employee found on guilty either in court of law or violated conditions
of organization.
He may force to retire from the service without any benefit.
 3. Premature Retirement:
If an employee become disabled in an accident , or due to some
disease , he may given option of retiring by management
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9. Voluntary Retirement / Separation Schemes,
Golden handshake:
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One of the techniques of trimming the workforce is Voluntary Retirement
Scheme (VRS). This is generous, tax-free severance payment to persuade
the employees to voluntarily retire from the company. The scheme has its
origin during early 1990s in USA . this scheme is also known as ‘Golden
hand Shake’ as it is the golden route to retrenchment. The VRS is most
Human technique for downsizing the workforce.
Eligibility for VRS:
It varies from company to company. Incase public sector company,
employees who have attained 40 years of age or completed 10 years of
service are eligible for VRS
Merits:
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It offers best and human route to retrenching excess of employee
Lucrative settlement prevents resentment
Demerits:
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It creates a sense of fear and uncertainty among the employees who stay with the
organization
Operation of the scheme creates bad reputation of the company

10. Layoff
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It is the temporary reduction in the workforce due to the inability of
the employer to provide work as a result of the shortage of coal,
power, raw material, machinery breakdown or a natural calamity.
Employer has to pay 50% of the basic wage to the employees during
the layoff period
Section 25-C of Industrial Disputes Act (IDA) 1947, does not confer
the right on employers to layoff workers for whatever reasons they
deem fit
According to section 25-M of IDA , unless the layoff is due to
shortage of power or natural calamity ,no work men can be laid off
without the prior permission of the labour commissioner
Maximum period of layoff is 45 days
If employer offers alternative employment , it will not be consider a
layoff even if the worker does not opt for it
The penalty stipulated for not complying with the provisions of the
IDA : imprisonment for period of up to one month or a fine up to Rs.
1000 or both

11. PROMOTIONS

12. PROMOTION:
‘A movement to a position in which responsibilities
and presumably , prestige are increased’
- Dale Yoder.

13. Purpose / Objective of Promotion:
Promotions have a positive impact on the employees. Beside higher
wages they also satisfy the higher order needs of employees.
Purpose / Objective of Promotion:
To recognise an individual’s performance and reward him for his
work.
 To put the employee in a position where he will be of greater value
to the company.
 To promote job satisfaction among the employees and give them
an opportunity for unbroken continuous service.
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To build up morale , loyalty and a sense of belonging on the part
of the employees.
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To demonstrate effective career development plans.
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To attract suitable and competent employees for the
organization.
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To create among employees a feeling of contentment with their
present conditions and encourage them to succeed in the
company.

15. Types of Promotion:
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Open promotions: An organization or a company considers all
individuals within it as a potential candidate and announces it to
various aspirants internally.
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Closed promotions: An organization or company in which the
candidate for higher position opening or vacancies is restricted and
not open for all the individuals ,within the organization and also does
not announce the vacancies internally.
Frequently companies follow a combination of both the systems .

16. Types of Promotion:
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Multiple Chain promotions: Which provides for a systematic linkage of
each position to several others. Such promotions identify multipromotional opportunities through clearly defined avenues of approach.
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Dry promotions :Dry promotions are those that are given in lieu of
increase in compensation.
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Horizontal promotion :Promotions have similar kind of work. Ex –
lower grade to higher grade without any change in work content.
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Vertical promotion : Those which change the nature of the work. Ex –
Supervisor to Manager.

17. Turnover
 There
are three types of turnover.
 voluntary
turnover, in which the employee
makes the decision to leave.
 involuntary turnover, in which the
organization terminates the employment
relationship.
 dysfunctional turnover occurs when an
employee whose performance is at least
adequate voluntarily quits.

18. Organizational practices(strategies) that
reduce turnover
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Frequently measure job satisfaction through surveys such as
the Job Descriptive Index.
Another method for retaining employees is through socialization,
this is the process of acquiring the knowledge and behaviors
needed to be a member of an organization. As employees
acquire information during the socialization process, their feelings
of fit with the organization increase, and employees who perceive
that they fit are more likely to stay with an organization.
Perceived organizational support is another factor that
influences employee turnover

19. Reducing Turnover
Source: Information from Thomas W. Lee and Steven D. Maurer, ‘‘The Retention of Knowledge Workers with the
Unfolding Model of Voluntary Turnover,’’ Human Resource Management Review 7 (1997): 247–275.

20. 
Employee retention is all about keeping good people.’
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Getting our compensation and benefits into line with
the marketplace.
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It’s about culture and how employees are treated.
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It’s about presenting a consistent, effective employer
proposition across the entire employee life cycle, thus
ensuring that the employer source, hire, manage, and
develop employees who partner with them in
achieving the organizational goals.’

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Integrate core values about people and a mission and vision
Performance development Plan
Training in Core Management Skills
Management development coaching and feedback.
Schedule and hold learning organization events.
Funding for conferences and educational development.
360 degree feedback recognize and value employees,
Coach employee performance,
Handle employee complaints and problems,
Provide a motivating work environment, and
Hold career development discussions with employees.