Main Causes of Separation of Employee From Organization


By: Site Engineer, Staff

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Many people do not want to spend all their lives working for another person. Sooner or later, they will leave the organization to establish their own business or to rest.

Where the employee does not retire voluntarily, he may retire when he reaches the retirement age. Most organizations in both the public and private sectors have a mandatory retirement age.

Since the employee will sooner or later leave the organization, the entrepreneur must prepare for the separation of the employee from the organization to return him to society.

Apart from the people that retire voluntarily or those that have reached retirement age, the entrepreneur may realize that he may be forced to lay off some workers involuntarily. These could be people whose services are no longer needed by the organization (also known as layoffs) or those who no longer meet the standards or expectations of the organization (discharge).

There are three processes of separation, which are:

1. Retirement

An employee can retire voluntarily or involuntarily. Every organization has or should have a retirement age. Some countries in West-Africa, it is about 65 years. This is mandatory. That is, every employee who reaches the said age must retire from work.

Another form of retiring employees compulsorily is to give the maximum number of years a person must serve in the organization.

If a person serves for 35 years in the public service, he is expected to retire even if you are not up to the retirement age. So, whichever comes first between the retirement age and the maximum number of years an employee can serve in an organization, the employee is retired.

Compulsory retirement of employees at a certain age or after putting in a certain number of years is beneficial to both the employee and the organization.

For the employee, it makes him plan his exit. This is because he knows when he is leaving the service and so his plans are targeted towards this known date. For the organization, it is a way of getting out old workers whose performance may be depreciating.

Instead of waiting for the mandatory retirement age, the employee may retire voluntarily. This is probably because he wants to go and establish his business venture or because he is dissatisfied with his pay or job. Remember the reason could be due to the positive or negative motivators.

The negative motivators may be:

  • Job dissatisfaction
  • Pay dissatisfaction
  • Lack of job challenge
  • Need for independence
  • Job security

The decision to retire could also be as a result of positive motivators, which are:

  • Employee seeing a venture opportunity which he wants to tap
  • It could be a mere encouragement from an individual who knows about the skills and attributes of the entrepreneur and believes that he may be better off if he utilizes his skills for himself. Such encouragement could be from his peers, spouse or family members.

Since the entrepreneur knows that the employee will one day leave his organization either voluntarily or mandatorily, he must prepare his employees for society. One of the ways by which this can be done is through the retirement income scheme. This involves the payment of gratuity and pension to the employee after retirement.

In some developing countries, any employee that has served up to 10 years in the public service is due for gratuity and pension. However, the person will not be paid his pension even after retirement until he reaches the age of 45 years.

2. Layoff

Layoff, therefore, is a situation where the entrepreneur relieves an employee from an organization because the company no longer requires his services. The employee may be very qualified and productive but he is still severed from employment because of the downturn in business.

In some situations, the economic environment may be so harsh that the market demand for the product of an organization is at its lowest ebb.

A building and civil engineering contractor, for instance, may spend up to 6 months without a job. This market situation could be so serious as to force the business to wind-up due to lack of patronage. In such a situation, the company may be forced to lay off the employees or some of them.

The layoff could be on a temporary or permanent basis. If it is temporarily, the employee could be re-absorbed when the fortunes of the business improve. But if the business folds-up totally, the layoff becomes permanent.

Employees that are laid-off permanently are usually paid their financial entitlement – gratuity and pension. But those relieve temporarily may not be paid since they are coming back into the organization as the economic environment improves.

3. Discharge

An employee is discharged from an organization when he no longer meets the expectation of the organization. This could be in terms of productivity or discipline. It is the most painful method of separation. It is painful if an employee is discharged he may find it difficult to have another job. No employer or labor would be prepared to hire an indiscipline worker nor would he employ somebody who may not be able to put in his best in terms of performance in the organization.

Companies and organizations normally do their investigation during the selection process so that they can identify people who might have been discharged from their former places of work for other reasons.

Also, discharged workers may not be paid compensation. Because of the painful nature of discharge, the local trade (labor) unions normally try to protect their members against unjust separation (discharge). Where the employer and the trade union could not agree, an arbitrator may intervene on the dispute. This arbitrator could either confirm or reverse the decision of the employer.


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