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July 2013, Singapore: One of the tasks that HR professions dislike most is executing a
retrenchment exercise. Other similar terminology: Layoff; Job redundancy; Involuntary
separation program (ISP); Voluntary separation program (VSP); Voluntary
separation scheme (VSS); Involuntary separation scheme (ISS); RIF (reduction in
full-time-headcount).
Sometimes
working with a large MNC or Global organization, at site level / business unit
level, you have not control on the decision made by corporate leadership. It is
all about numbers. This article is not about criticizing the decision making
process but to share with you what to do when it happen.
In
some countries, the employment law requires the following practices e.g., last
in first out, evidence of company poor performance, negotiate with unions (if it
is a unionism environment), evidence alternative has been implement before conducting retrenchment, etc.)
If
you are being asked to perform an ISP / ISS – it is always wise to do your
homework and consult an approved legal consul by your corporate. In Singapore,
the Ministry of Manpower (MOM) has a dedicated section in their website on
retrenchment. You can click the link:
In
addition to the employment law, internally the company needs to develop an ‘assessment’
tool to determine who get shortlisted for the retrenchment package. One organization
I know, adopted the following assessment tool with 5 factors: -
Achieves Results
Criticality of Skills
- Qualifications
- Business Orientation
Interpersonal Skills
The
assessment can be a 5 scale ranking, see below: -
The
main advantages of having an ‘assessment’ process in place during a
retrenchment is that: -
It makes the selection decision more objective, fair & consistent process to assess strongest & weakest contributors.
It helps management in making the
decision in selecting candidates for retrenchment.
One
of the disadvantages of this assessment process is people selected will be
viewed and discriminated as non-performance.
