Employee Separation Methods

Employee remuneration systems

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) 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.

2) 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 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 preretirement 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 selfreliance 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 disciplines

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.

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