This paper examines the termination of employment as a multifaceted organizational and social phenomenon. It identifies and explains seven key issues associated with ending an employment relationship: layoffs, resignation, dismissal, exit interviews, return of company property, transfer or relocation, and severance pay. Drawing on scholarly sources, the paper explores how each form of termination differs in terms of who initiates it, the conditions under which it occurs, and its implications for both the organization and the broader society. The paper also considers how economic pressures such as organizational restructuring and downsizing shape modern employment termination practices.
As economic crises continue to take their toll on populations, more and more economic agents are turning to restructuring processes in order to enhance their financial stability. One specific application of organizational restructuring is the downsizing of staff as a means of reducing workforce expenditures. Aside from downsizing, however, the termination of employment can occur in other ways as well, and it is linked to decisions, choices, and consequences. Employment termination specifically refers to the end of an employment relationship between an individual and an organization; it can be initiated by the employee, by the employer, or it may be a mutual decision.
The most notable issues related to the termination of an employment relationship are the following: layoff, resignation, dismissal, exit interview, return of company property, transfer/relocation, and severance pay.
A layoff occurs when the decision to terminate employment is made by the organization, typically generated by a lack of sufficient work to require the efforts of the entire staff. Layoffs are generally troublesome due to the scale at which they occur — they tend to happen in large numbers as a result of organizational problems. Mass layoffs take the form of downsizing, and this phenomenon generates a series of problems both within the organization and within society at large. Within society, the number of unemployed individuals increases, deepening the socioeconomic problem of unemployment and placing additional strain on the state budget. Within the organization, problems manifest as lowered employee morale and a persistent sense of job insecurity (Mollica and Gray, 2001).
Resignation occurs when the employment contract is terminated at the desire of the individual employee. Mass resignations are uncommon, and when an individual resignation does occur, it can be attributed to a range of personal and professional factors — such as the prospect of a better position at another company, or ongoing frustration with the current work environment. The typical mechanism involves the employee submitting a written resignation to the employer. Generally, the employer accepts the resignation and the departure is amicable. Nevertheless, there are situations in which the employer does not accept the resignation and the employment relationship continues, or is eventually terminated under more tense circumstances. In cases involving public positions, resignations can take on a political dimension; they may be submitted as a gesture or statement, and may be refused in order to protect the public institution and its image (Glant, 2002).
Dismissal is another means of terminating an employment contract, distinguished by the fact that the choice belongs to the employer and is usually the result of an employee's misconduct or underperformance. The cause may be technical — related to job tasks and performance — or disciplinary in nature. The rate of dismissal varies across organizations depending on their characteristics and internal policies. While some organizations register high rates of dismissal, others maintain minimal rates, with the variance attributed to organizational differences. As Dell'Omo (1997) notes:
"Numerous arguments have been advanced suggesting that this variation in dismissal usage is due to differences across firms in human resource policies and procedures as well as other organizational characteristics. For example, Steiber and Rogers (1994) argue that where organizations place few restrictions on managerial authority, dismissal is used to excess. Others argue that low dismissal rates are observed where the disciplinary system provides substantial protection from unfair dismissal. According to this argument, managers in such settings are often unwilling to use dismissal even where justified, because of the difficulties and risks associated with terminating an employee."
"Covers offboarding procedures and feedback collection"
"Explores relocation complexity and severance benefit variability"
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