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MGTOHumanResourcesManagement
MGTO 231Human Resources Management Separations and downsizing Dr. Kin Fai Ellick WONG Prologue: 楚漢驕雄 史記 淮陰侯列傳 項 梁 敗 , 又 屬 項 羽 , 羽 以 為 郎 中 . 數 以 策 干 項 羽 , 羽 不 用 . This was not just a simple “separation”… 漢 王 (即劉邦)之 入 蜀 , 信 (即淮陰侯)亡 楚 歸 漢 … The separation not only led 項羽 to lose one strong subordinate, but also… led his competitor 劉邦 to have the strongest subordinate History revealed that: 十面埋伏 四面楚歌 項羽 was defeated by 劉邦,韓信 was the Highest Commander of the troop History might have changed if 項羽 did not let 韓信 go… Basic concepts Employee separation The termination of an employee’s membership in an organization 天下無不散之筵席 (There is no everlasting meeting) 話說天下大勢,合久必分,分久必合 (The natural trend is that merging is followed by separation and separation is followed by merging) Could be terminated by either side Separations need cost Recruitment, selection, training, and separation costs Recruitment costs Advertising, campus visits, recruiter’s time, search firm fees Selection costs Interview, testing, reference checks, relocation Training costs Orientation, assessment, direct training, evaluation, trainer’s time Separation costs Separation pay, benefits, vacant positions So, the higher the turnover rate, the more the cost of employee separations Turnover rate The rate of employee separations in an organization Some organizations may organize exit interview and outplacement assistance after employees’ separations Given that separations need costs, why are they so common? Some benefits of employee separation Reduces labor costs 瘦身 (“fat” reduction) The salary savings may outweigh the separation costs Replaces poor performers The increase in productivity and performance after replacement may outweigh the separation costs Increases innovation Opening a possibility of “fresh mind” joining Carrying new approaches to old systems or problems Increases diversity within a firm Employees within an organization may become more homogeneous as time goes by Remember Darwin’s theory of evo
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