Compensation and Technology Solutions: Employee Separations

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Table of Contents

Abstract
Introduction
A Devised Separation Policy
Specific Procedures for Involuntary Termination
Specific Procedures for Voluntary Termination
Conclusion
References

Abstract

With the changing employment trends and policies, companies are frequently restructuring, discharging, and replacing their employees to maintain a competent workforce that is capable of meeting corporate demands. Although recruitment and retrenchment of employees are common practices that human resource departments handle, employee separation is becoming a critical issue. It is possible and often happens that an emotionally discharged employee cause legal, ethical, and social confrontations in a workplace, which sometimes result in unfortunate repercussions that damage company’s reputation.

This report aimed at designing a separation policy to demonstrate efficient termination and separation of employments, which are becoming increasingly essential within the human resource paradigm. If mutual consent and benefit prevail throughout the hiring and termination processes, both voluntary and involuntary terminations may prove fair and ethical. Using the psychological contract principles, human resource managers can professionally manage the voluntary terminations that workers sometime request, and the involuntary terminations that are frequent in modern organizations.

Introduction

Organizations are institutions, where employees meet and form strong social systems, which are crucial for individual leisure and professional development. According to Mattel (2000), employee recruitment and dismissal are mandatory processes that determine the success and survival of an operating organization. The dismissal of an employee is a crucial process because an unprocedural discharge of employees attracts legal challenges from an emotionally retrenched employee (Boachie-Mensah & Dogbe, 2011). Such situations may also create severe motivation problems to the workforce left behind.

Moreover, managers need to consider a series of financial and ethical aspects of work progress that interplay with a departure of an employee. Proper management of employee dismissal and departure, therefore, becomes a crucial practice that requires strategic plans and approaches (Boachie-Mensah & Dogbe, 2011). To minimize the negative impact associated with the human resource department that results from the unprofessional dismissal of an employee, efficient separation policies and procedures are crucial. Therefore, this essay examines involuntary and voluntary termination of employees with a view of devising an effective separation policy and procedure to address common issues that occur in the process of termination.

A Devised Separation Policy

Separation of employment is the entire process involving the management of execution of service of employees. Modern technology is becoming increasingly important as business models have proven efficient in handling human resource issues, including those involving employee recruitment, retention and termination (Tomprou & Nikolaou, 2011). The model of psychological contract is a technologically influenced model that demonstrates relationships in the human resource management paradigm. The designed separation policy will consider an inclusion of the psychological contract theory or model that focuses on addressing the relevant aspects involving workplace relationships and human resource aspects.

According to Stein (2006), as businesses continue to operate in increasingly risky and competitive environments, the need to control workforce through mutual consent and mutual benefit is rising. Both voluntarily and involuntarily termination processes are acceptable, but employee departure may attract unnecessary compensation costs or damage the reputation of the human resource department of an organization (Homburg & Staritz, 2012). The psychological contract model can help to reduce ethical dilemmas on the termination and separation of employment.

Termination of employment would deem ethical if employees dwelled on the mutually beneficial terms that the psychological contract considers essential (Tomprou & Nikolaou, 2011). The deliberated separation policy involved the consideration of the psychological contract that hinges on the notion of mutual consent and benefit in employment relationships between employers and employees. According to Tomprou and Nikolaou (2011), the psychological contract stipulates the important aspects of employment that involve the employee performance, the general competence and workplace motivation that employment policies should consider.

Since the psychological contract stipulates the conditions of mutual agreements and mutual beneficence between employees and employers, the recruitment and dismissal process should remain judged based on the contractual accord (Tomprou & Nikolaou, 2011). In considering the aspects of the psychological contract, the designed separation policy shall take into account the important facets of contractual agreements and the human resource laws that influence the recruitment and retrenchment processes. Therefore, the devised separation policy and procedures would involve the conditions that will control both involuntary and voluntary termination in the organization.

Specific Procedures for Involuntary Termination

This employee separation policy defines an involuntary termination of employment as a procedural departure of an employee upon conditions within the end-of-contract agreements stipulated by the employer (Mattel, 2000). Elements of an involuntary termination that this separation policy considers employee departure based on the issues pertaining to the regular retrenchment program, retirement, dismissal due to work incompetence, physical disability, psychological incapacitation, unlawful practices, and misconduct (Mattel, 2000).

For the designed separation policy, a series of conditions on termination and separation of employment shall prevail to avoid unjust or unethical dismissal of employees in the organization. Firstly, under no condition shall the involved company dismiss an employee without any justifiable reason lawfully accepted and inherent in the organization policies. As Mattel (2000) suggests, all employees directly involved with an organization, must respect the contractual terms reached upon their hiring or recruitment. In case any employee leaves the organization owing to other different reasons apart from the ones mentioned, the employer shall assume that it is a voluntary termination of the employment.

Upon dismissal, a human resource panel involved in assessment of employee performance, record of work, and employee competence should sit to determine the compensation package (Mattel, 2000). They need to prepare a retrenchment report of an employee to articulate the major reasons of dismissal, the aspects considered in making the dismissal decision, and the rewards or compensation package payable to the dismissed employee. As the psychological contract requires, the size of compensations would depend on the performance and competence of workers within the employment duration (Tomprou & Nikolaou, 2011).

The human resource department should meet to discuss the contents of the report, and provide any meaningful suggestion or deductions on the report. The employees need to confirm the report and affirm it by appending their signature for approval and mutual consent regarding the termination of the employment contract. Upon leaving, the employee must carry out any clearance considered vital, which is within the requirements of the employment contract and receive the compensations and officially terminate the contract. Google and Toyota have successfully used this approach.

Specific Procedures for Voluntary Termination

This separation policy defines voluntary termination of employment as a willful departure through the willingness of an employee to cease working for an organization (Bogaert & Gross-Schaefer, 2005). Voluntary termination in this separation policy would also mean the end of work agreement based on the implicit or explicit request from the employee to terminate the employment contract. What would determine the voluntary termination in this separation policy are the aspects regarding unforced resignation, employee’s willful termination of an existing contract, job abandonment, and voluntary retirement (Bogaert & Gross-Schaefer, 2005).

The principles of psychological contract involve mutual benefit and consent, and this discourages employees leaving their jobs just to receive unfair compensation. Any reason other than the ones mentioned, would definitely require an independent approach. Therefore, for the regulations of departure, under no condition shall any employee deliberately quit working without presenting any valid reason for his or her departure (Bogaert & Gross-Schaefer, 2005). Most important is that employees would remain obligated to respect the terms of employment contract signed during recruitment.

Efficient procedures for voluntary termination must prevail to avoid malicious requests that are costly in terms of compensation of employees. The separation policy herein requires employees to justify at least ten main reasons for quitting their work prior to presenting their implicit or explicit requests (Boachie-Mensah & Dogbe, 2011). Additionally, any employee leaving the workplace permanently through a voluntary process must sign a departure consent form, which involves the ten basic reasons for leaving the job and contains the expectations of the compensation package, as indicated in the contract (Boachie-Mensah & Dogbe, 2011).

The employee must also justify the breached conditions of the contract by the employer through a report and the conditions he or she would have breached prior to his or her voluntary termination. The human resource panel should sit and discuss the report and the signed employment forms before concluding on the compensation package payable and the departure conditions with reference to the contents of the employment contract (Boachie-Mensah & Dogbe, 2011). This approach has worked for Honda, Wal-Mart, and Microsoft companies.

Conclusion

One of the critical processes in the human resource department is the permanent dismissal of employees that often attracts legal and ethical confrontations, which have the capacity to affect the reputation of an employer. Based on the principles of psychological contract, termination of employment in the designed separation policy hinges upon performance appraisal of individual employees. The devised separation policy relies on the principles of psychological contract that focuses on mutual consent and benefit of employers and employees. On a voluntary termination, it would deem professional for employees to provide substantial reasons for quitting the employment and breaching agreements that they have made.

References

Boachie-Mensah, F., & Dogbe, O. (2011). Performance-based pay as a motivational tool for achieving organizational performance: An exploratory case study. International Journal of Business & Management, 6(12), 270-285.

Bogaert, D., & Gross-Schaefer, A. (2005). Terminating the employee-employer relationship: ethical and legal challenges. Employee Relations Law Journal, 31(1), 49-66.

Homburg, M., & Staritz, S. (2012). Customer uncertainty following downsizing: The effects of extent of downsizing and open communication. Journal of Marketing, 76(3), 112-130.

Mattel, G. (2000). New technology to support incentive compensation management. Workspan, 43(7), 18-20.

Stein, J. (2006). How hotel managers might protect themselves from early termination. The Practical Real Estate Lawyer, 22(6), 7-17.

Tomprou, M., & Nikolaou, L. (2011). A model of psychological contract creation upon organizational entry. Career Development International, 16(4), 342-363.

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