Employee Separation Methods

Concept of Employee Separation 

An employee who works for an organization has to leave the organization one day or the other. Even in Japanese organizations, where there is life-time employment, separation is inevitable. Separation is the act of an employee leaving his organization because of any of the reasons viz., superannuation, turnover, transfer, dismissal, retrenchment, etc.

A manager, who looks after the staffing function, has to adhere to the formalities, rules, terms, conditions, legal provisions, standing orders etc. in separating any person who works for the organization. While an unconfirmed employee must be given notice pay, a confirmed employee must be given compensation, gratuity, pension benefits etc. according to rules. Similarly, when an employee is not able to make the contribution expected of him, the organization would not be able to go on tolerating it. Hence, the need for separation arises. But the manager must be able to determine when, how and why an employee should be separated and what compensation should be given to him.

An organization having human resource management philosophy must care for the human aspect while separating an employee. After working for an organization for a substantially long period, a person goes himself acclimatized to the given environment. His mind, feelings, thoughts, attitudes, approaches, fashion, taste and temperament, his very personality itself is influenced by his work environment. Obviously when he comes to a turning point to separate himself, his mind is bound to be filled with mixed reactions, feelings, agony and anxiety about future. He needs encouragement, affection, strengthening, sympathy, some amount of counselling, guidance, or promise. Irrespective of the cause of his separation, the human resources manager must take into account of the human aspects of the individual, and go ahead to help him to release his tension, worry or anxiety. The human resource manager’s patronisation, affection and promise will certainly be a great solace to the individual in his weak spot.

It is encouraging for a separating employee, if his dues are settled before he is separated. Similarly, a send-off meeting, expression of encouraging words, a sympathetic note, a suitable gift, wherever appropriate, may provide some solace to the parting employee. Some companies assure a continuing association to the parting executives and employees with the company as consultants, agents and so on. Parting is always painful. Hence, the human resources manager must do his best to console and encourage the separating employee.

Important Employee Separation Methods

Employees may move out of the organization or be separated for a variety of reasons like retirement, resignation, suspension, discharge, dismissal; redundancy, retrenchment and outplacement. These are discussed here briefly.

Golden handshake

Golden handshake is the name given to the method of retrenchment under which employees with a certain minimum service can opt for voluntary retirement and get a fat lumpsum amount in return

Death, Retirement and Resignation

Some employees may die while in service. Such deaths may be caused by accidents or other reasons. Where the death occurs due to occupational hazards, the provisions of Workmen’s Compensation Act apply. Organizations may additionally have insurance and family-benefit schemes. Several organizations also have a policy of offering employment to the spouse/child/or dependant of an employee who dies in service. Typically, all employment contracts stipulate the age of superannuation. Employees retire from service on attaining the age of superannuation. Some organizations may have a policy to reappoint professionals and others who possess rare skills for a limited duration at a time. All contractual appointments terminate after the expiry of the period of contract The normal retirement benefits such as provident fund, pension and gratuity as applicable accrue and become payable to the employee on retirement. Some organizations extend certain employee benefits like medical facilities to the employees and their families even after retirement. Usually the retiring employees are bid farewell appropriately with a party, gift and a mention in the house journal.

Organizations are also providing liberal incentives for people to leave before reaching the age of superannuation when they are faced with the situation of surplus staff. Employees -may opt to retire voluntarily to avail the benefits of such schemes and possibly pursue a second career or self-employment.

Resignation refers to a situation where an employee takes or is made to take the initiative to leave the job. Resignation may be voluntary or involuntary. A person may leave the Job if he is discontent with it or any other aspect of the organization or when he gets a better job elsewhere.

Resignation is considered involuntary when the employer advises the employee to resign or face disciplinary action: However, in disciplinary cases, it is better to follow the due process of in-house enquiry than to shorten the process and accept the forced resignation. Otherwise the affected employee can subsequently go to the union and/or court and assert that the resignation was obtained under duress, even if there was no duress.

Where the incidence of separation is high due to resignation, it is appropriate for the organizations to know the reasons through holding ‘exit interviews’. Exit interviews are held with the employees leaving the organization for obtaining information regarding reasons for their leaving. If more people are leaving due to dissatisfaction with organizational factors such as pay, supervision, company policies and working conditions or low morale and motivation, the organization would do well to take immediate measures to remedy the situation so that such departures do not reach the proportion of an exodus.

Suspension, Discharge and Dismissal

Suspension means prohibiting an employee from attending work, stopping him from performing the duties assigned to him and withholding the remuneration payable to him. Suspension is not termination of services of an employee, but may in some cases, eventually lead to it. An employee may be suspended as a matter of punishment for a specified period in accordance with the provisions in the standing orders. Suspension may be procedural when the employer feels that the delinquent employee be kept away from work pending enquiry into his alleged misconduct so that he will not tamper with evidence or the enquiry itself. Procedural suspension is usually resorted to only in major or repetitive acts of misconduct.

Dismissal is termination of the services of an employee for misconduct. Discharge also means termination from service of an employee, but not necessarily as a punitive measure.

Redundancy, Retrenchment and Outplacement

Employees may become surplus with the introduction of new technology, automation, modernization, rationalization, loss of market for the product, etc. The surplus employees may be laid off or retrenched. Layoff of employees refers to the failure, refusal or inability of an employer to provide employment due to factors beyond his control such as shortage of inputs and infrastructure, breakdown of machinery, etc. Layoff does not mean termination of service, but leads to a temporary denial of employment.

Retrenchment means the termination by the employer of the services of an employee for reasons other than punishment but does not include retirement or termination for reasons of ill-health. The legal provisions stipulate employers’ obligations to give advance notice (one month or equivalent wages), pay compensation (15 days average pay for each completed year of service) and follow the prescribed procedure (first-in-last-out principle to be followed, and a notice to be served to the appropriate government). Employers should give preference to retrenched employees if they advertise for reemployment against future vacancies.

When labour becomes surplus, some organizations seek to provide them training in marketable skills and actively assist them in finding a job elsewhere. Outplacement refers to such activities.


This is one of the most unethical, unexpected and unprofessional way to terminate the contract of an employment. In this, on one fine day an employee decides not to go to work. He does not care to hand-over his stuff. In case an employee decides to abscond (or run-away), it becomes very important to understand his motives and intentions. Employees can abscond in either or all of the below mentioned circumstances/situations:

  1. After stealing the confidential information or documents or database from the company.
  2. If the intentions of an individual is to commit a crime.
  3. If there is a work-pressure and stress and the individual is not able to cope-up with it (as it happens in call-centers, BPO and other high-stress industries).
  4. If the employee has committed any crime outside the office and after working hours (such as murder or getting involved in terrorist activities or theft or any other civil crime).
  5. Then, when priorities are different. Employee has asked for leave due to some urgency at his home (or might be he is trying to escape from his work responsibilities) and at the same time his team also needs him in the office and his leaves are not approved.
  6. If he has got some exceptionally good opportunity that requires him to join immediately and he feels that the process of separation in his company is a bit too complicated. He assumes few things and do not really try to face the challenge.
  7. Lastly, it is a personality issue. Employees that abscond have different personalities. They are low in confidence. They are too weak to face the reality and challenges of life. They feel that running away from the problem is as good as solving the problem. They are cowards to take the problems head-on.