Layoff, VRS, Golden Hand Shake and Exit Interview

1. Human Resource
Management
Presentation
Made By:
Karan Kamboj

2. Layoff
Definition:
Suspension or termination of employment (with
or without notice) by
the employer or management. Layoffs are not
caused by any fault of the employees but by
reasons such as lack of work, cash,
or material. Permanent layoff
is called redundancy.

3. Reasons of Layoffs
1. This is usually because the company is facing
financial difficulties.
2. This is a method whereby an investment banking
firm, who has committed to buying up all the
unsubscribed shares during a rights offering, will
reduce the time risk involved due to the
difference between entering into the contract
and selling the shares. In other words, they are
hedging against any losses due to time.

4. Voluntary Retirement Scheme (VRS)
Definition:
Voluntary retirement schemes are
programs offered by employers to
provide retirement benefits to long-
term employees before the
employees’ projected retirement
dates. Businesses and organizations
often offer voluntary retirement
schemes as a method of workforce
reduction and to reduce long-term
costs.

5. VRS Cont…..
Voluntary retirement scheme (VRS) refers to
voluntary retirement scheme,
when company faces the problem of surplus
labor, they have to remove the extra workers.
This needs to be done to avoid increase in cost.
One of the methods used by the companies is the
methods used by companies is the VRS scheme.
Under this scheme people have put in 20 or more
number of years of service are given an option to
opt for early retirement benefits and some other
amount which is due to them are paid when they
leave the company.

6. VRS Cont……
• Voluntary retirement programs offer employees
an incentive to commit to employment with their
employer for a significant number of years.
Voluntary retirement programs can also provide
employees with an option to retire before the
minimum age of a government pension scheme.
• It is an offered to certain employees as an
incentive to retire. It usually contains generous
benefits and is typically targeted at employees in
middle age and/ or those who have been with a
company for a considerable amount of time.

7. Golden Handshake
Definition:
Generous bonus offered to
a director, employee,
or partner as
a severance payment, or
an inducement to leave the
firm without making a fuss
or creating a controversy.
See also golden boot.

8. Golden Handshake Cont….
A stipulation in an employment agreement
which states that the employer will provide a
significant severance package if the employee
loses their job. A golden handshake is usually
provided to top executives for loss of
employment through layoffs, firing or even
retirement. Payment can be made several
ways, such as cash, or stock options.

9. Golden Handshake Cont….
This can be in the form of cash, equity, and
other benefits, and is often accompanied by
an accelerated vesting of stock options.
According to Investopedia, golden handshake
is similar to, but more generous than a golden
parachute because it not only provides
monetary compensation and/or stock options
at the termination of employment, it includes
the same severance packages executives
would get at retirement.

10. Exit Interviews
In human resource terms, an exit
interview is a survey that is conducted
with an employee when he or she
leaves the company. The information
from each survey is used to provide
feedback on why employees are
leaving, what they liked about their
employment and what areas of the
company need improvement. Exit
interviews are most effective when the
data is compiled and tracked over
time.

11. How are Exit Interviews
conducted?
The exit interview may be conducted through a
variety of methods. Some of the methods
include: in-person, over the telephone, on
paper, and through the Internet such as with
Nobscot’s WebExit.

12. Exit Interview Cont….
An exit interview is a survey conducted with an
individual who is separating from an organization or
relationship. Most commonly, this occurs between
an employee and an organization, a student and an
educational institution, or a member and an
association. An organization can use the information
gained from an exit interview to assess what should
be improved, changed, or remain intact. More so, an
organization can use the results from exit interviews
to reduce employee, student, or
member turnover and increase productivity and
engagement, thus reducing the high costs associated
with turnover.

13. Exit Interview Cont….
Some examples of the value of conducting exit
interviews include shortening
the recruiting and hiring process,
reducing absenteeism, improving innovation,
sustaining performance, and reducing
possible litigation if issues mentioned in the
exit interview are addressed. It is important
for each organization to customize its own exit
interview in order to maintain the highest
levels of survey validity and reliability.

14. THANK YOU