Offer Reasonable Severance Terms

It is essential for the public relations well-being of the organization to offer fair and generous settlements to employees who are asked or encouraged to leave. Such settlements may include provisions such as a cash amount based on the years of service, earlier pension starting dates, and career guidance and support.

The cash settlement is intended primarily to support the person until he or she is able to locate another position (though some have urged stock options instead of cash so that the ex-employee may share in increased profits from the downsizing). The earlier pension can be given by adding, say, 5 years to the employee's actual age to enable him or her to achieve a retirement pension earlier than would be available otherwise. The outplacement assistance is usually provided by a consultant who guides the ex-employee in the techniques for seeking a new position and may also provide some of the resume preparation and phone and office services helpful to the job seeker.

All these separation assistance tools help the organization's management to feel and say properly that it is doing what it reasonably can to help those who are put in a difficult position by the downsizing program, often due to no fault of their own.

Try to Give Choices Between Favorable Options. To whatever extent possible, it is wise to build into the severance arrangement choices for the employees so that the employees feel that there is a voluntary element in the plan and that they are not being forced unilaterally into their new status. For example, at a downsizing program at Sea-Land Service, many employees were offered a generous severance package, but given the choice of remaining with the company, which would try to, but not guarantee to, find them a lower-level position with the company if the package was rejected. With this choice, no employees left Sea-Land without the severance package.

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