Hello friends I am going to share a very common but important topic of HRM: Separation. Daily we read about layoffs, retrenchments, & VRS, so here I am sharing those definitions with you,

So read it…

Separation means termination of service of agreement with the organization for one or other reason. It can be the decision from the employee’s side or from the company’s side.

The employee may be separated from the pay roll of a company as a result of:

- Resignation

- Discharge & Dismissal

- Suspension & retrenchment

- Lay-off

Resignation: Resignation refers to the termination of the employment at the instance of the employees. It is the employee’s initiative.

Discharge / Dismissal: refers to the permanent separation of an employee from the pay roll for the violation of company rules or for inadequate performance. It is initiated by the employer.

Lay-off: Layoff refers to an indefinite separation of the employee from the payroll due to factors beyond the control of the employer; The employee is expected to call back in future. It involves temporary removal from the payroll of person with the surplus skills. The main purpose of lay-off is to reduce the financial burden on an organization when human resource cannot be utilized profitably.

Retrenchment: refers to the termination of the services of employees for economic reason in a going concern.

Retrenchment differs from lay-off in that, because the employee is sure to be recalled after the end of the period of lay-off, but it is not so in case of retrenchment, in retrenchment the termination is because of some uncontrollable reason and it is usually of several employees.

Voluntary Retirement Scheme (VRS): Also known as Golden Hand Shake - Also result in separation of employee from employer. VRS is resorted where organizations have surplus labour. Management prefers to pay hefty sums and reduce staff strength than retaining surplus labour and continuing to pay idle wages.

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