Saturday, July 20, 2013

Assessment Process for Retrenchment Exercise?

20 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: -
  • 5 = Role Model
  • 4 = Exceeded Expectation
  • 3 = Meet requirement
  • 2 = Need to improve
  • 1 = Unsatisfactory / Poor
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.

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