UNIT – I Lesson 1 HRM – AN OVERVIEW Lesson Outline Nature of ...

etirement package before redesigning the workforce. The lump-sum pay serves as an
incentive to leave one’s employment. Employees accept such retirements in exchange of a
liberal package, which is called the scheme of Golden Handshake. Managements generally
prefer to pay hefty amounts and reduce staff strength rather than retaining surplus labor
and continuing to pay them idle wages.
The organization should plan for capable successors to take the role of people who
retire even before their retirement. Most employees prefer to postpone retirement until
they reach superannuation. Hence It is also the responsibility of any employer to plan and
provide for the future life of the retiring employee. In the present context, when the
lifespan of average citizen has gone up well above the retirement age, retirement is to be
put to reconsideration in terms of revision of the age of retirement or alternative work
styles like job sharing, home working, freelancing and part-time employment during postretirement
period.
Lay off refers to the temporary separation arising out of the failure, refusal,
inability of an employer to continue to give employment to any group of employees in the
organization due to economic or business reasons like shortage of fuel, lack of raw
material, natural calamities and accumulation of excess stocks. Lay offs are caused mainly
due to factors for which employees cannot be termed as direct and prime causes. Still, the
organization must help them in dealing with any of the difficulties they might experience
such as guilt (upon why they have let themselves into it), shame (how to face others after
this), annoyance or anger (why they were chosen) and anxiety (what they would do next).
Retrenchment is said to be a permanent lay off for reasons other than punishment,
retirement or termination owing to ill health. In both the cases of lay off and recruitment, a
certain monetary compensation would become payable by the employer as per the statutes
of the land. Further, clear communication and counseling would be required to minimize
the negative effects of such measures of downsizing. The principle of last in; first out is
advocated while prioritizing the people to be removed. Retrenchments might also occur
due to global competitions, changing technologies that reduce the need for workforce,
mergers and acquisitions and reduction in product demand.
Termination of service by way of dismissal might also be carried out as a final
disciplinary procedure, after all efforts in salvaging the employee have failed. Dismissal
can be ordered only when it is duly proven through formal procedures that one or more
employees have engaged in any serious misconduct like theft, violence, sabotage, false
statement of qualifications at the time of employment, or other actions specified in the
company’s standing orders. Generous opportunities must be given to the employee to