report on succession plannig and vrs slip

8/9/2019 report on succession plannig and vrs slip

http://slidepdf.com/reader/full/report-on-succession-plannig-and-vrs-slip 1/22

REPORT ON THE TOPIC:- “SUCCESSION PLANNING,VRS &PINK SLIP”.

Submitted under the partial fulfilment of PGDM

2 nd SEMESTER SESSION (2009-11)

SUBMITTED TO – SUBMITTED BY-

Mr. Alok Kumar Group -4

ACKNOWLEDGEMENT



We take great pleasure in expressing our deep sense of gratitude toour esteemed institution SCHOOL OF MANAGEMENTSCIENCES for providing opportunity to fulfill our report.

We greatfully acknowledge with heartiest gratitude and profound indebtedness towards our esteemed guide Mr.Alok Kumar, Coordinator of PGDM course, for his being benevolencecandid co-operation and constructive criticism,keen interest andinspiration given to us through the entire period of our associationwith him.

We are also grateful to Dr.P.N.Jha director of SMS,Varanasi for providing excellent atmosphere in the institution,which made the endeavor possible.

DECLARATION



It is here by declared that this report file submitted by Group 4 is prepared by the sincere endeavor of the members mentioned below.

Ankit Mishra (PG/15/019) _____________

Ankit Yadav (PG/15/020) _____________

Anupam Agarwal(PG/15/021) _____________

Aparna Trivedi (PG/15/022) _____________

Aprajita(PG/15/023) _____________

Apurva(PG/15/024) _____________

CONTENTS



Succession PlanningWhat is Succession PlanningWhy Succession PlanningModels of Succession Planning

Advantages of Succession PlanningSuccession Planning Tools

VRSAbout VRSTechnicalitiesHurdles in executionMeasures

ConclusionPink Slip

MeaningSigns that a pink slip is coming

How to avoid pink slip?Examples



What is Succession Planning? Succession planning is a process of determining critical roles within the company, identifyingand assessing possible successors, and providing them with the appropriate skills andexperience for present and future

opportunities.

In other words succession planning comprisesof these important steps -

• Recruitment and staffing - you recruitsuperior and right employees

• Training and development - you trainthe employees to develop their knowledge, skills and abilities

• Performance and Compensationmanagement - prepare them for advancement or promotion into ever more challenging roles

• Other (in which talent management plays a role) - you are prepared to retainor replace superior employees

Typical activities covered by succession planning include -

• Determine what roles and skills are critical for the growth of the company• analyze and address the gaps revealed by the planning process• identify and understand the developmental needs of employees to fill those positions• ensure that all key employees understand their career paths and the roles they are being

developed to fill• train people for skills and positions that are not presently existing in the company• understand the time needed to backfill key roles• enrich succession plans through regular executive discussion of people and posts• identify top performers in all departments and make sure that they are engaged and

satisfied to stay with you for a long period• continually review and check the process of succession and whether planned individual

development has taken place

Succession planning is a process by which successors are identified for key positionsthroughout an organization including vital roles in each department of the organization. Itshould take into account the strategic vision and objectives of the organization. With goodsuccession planning in place, employees are ready for new leadership roles so when someoneleaves the company, another is skilled and ready to step-up to that position. Succession

planning can also help develop a diverse workforce, by enabling senior management to look at



the future goals of the organization as a whole. So the key issues the HR professionals shouldconsider while developing a succession plan are –

• Strategic plans and future goals• Workforce requirement• Knowledge retention and critical roles• Talent management strategies

Why Succession Planning?Are you ready to continue business without interruption after losing a strong and effectiveleader in your organization? Leadership is and has always been a relatively scarce commoditywithin companies. First, you need to analyze what has made the business successful. Does thatsuccess rely on skills or knowledge of the leader that could leave? Next, you need to look at thefuture of the company. Where are you going and what skills do you need to get there and onceyou are there? Is that talent currently in your leadership team?

Other important questions to consider are - existing and future market competition, requiredtechnology know-how, talent pool of existing employees, and management hierarchy andreporting structure.

Answers to these questions can provide the basis for decisions on whether the business cancontinue without the leader, how it would continue without the leader, who would lead and howready they are.

The recruitment of top talent is too expensive due to the rising executive search costs andincreased hiring contract requirements, not to mention the lack of knowledge about companyculture and inner workings. Recent research has shown that company find more effectiveleaders by developing from their internal talent.

A careful and considered plan of succession ensures the least possible disruption to thesuccessor’s responsibilities and therefore the organization’s business and efficiency.

Succession planning plays a vital role and is necessary when a key executive or employee is:

• unwilling to continue the role within the organization• accepting an offer from another organization which will terminate or lessen their value to

the current organization• indicating the completion of a short-term project or task assigned or • moving to different position and different set of responsibilities within the organization

A succession plan clearly sets out the factors to be taken into account and the process to befollowed in relation to retaining or replacing the person. Succession management systems

provide an enabling solution for the planning and process – going through all possible scenariosand providing the best solutions and shortest paths to succession.



Having a decision making body and succession planning process is critical. However, softwarecan help make this process consistent, automated and fair. Succession planning teams can play“what if” scenarios to ensure that they are thinking of all possibilities. They can search for talent throughout the organization – in different organizations and countries. They can alsoensure a continual and full pipeline of talent.

Models of Succession Planning There are three main models that companies use to implement succession planning:

• Short-term planning or emergency replacements• Long-term planning or managing talent• Combination of above plans

Organizations should take a close look at their goals and levels of commitment before choosinga model that best suits their needs.

Short-term or emergency replacements

This is the most common model of succession planning and serves as a crucial point for alltypes of businesses. Short-term replacement planning is focused on an urgent need caused by asudden development within the organization –skilled employee leaving the company, expansionor contraction of business. Sometimes, emergency replacement planning must work to retainknowledge that is about to be lost. Emergency knowledge retention is an option to consider if the organization is about to lose specialized knowledge and does not have a successor to takethe knowledge.

Emergency succession planning can come into play any time the organization expands in a newdirection or discovers the talent gaps to fill the required managerial position. Generally, humanresources will try to fill the role from within the organization, but often go outside, if no onehas been trained for the job in the organization.

Long-term planning or managing talent

Talent management focuses on the future needs of the organization. Working within the

strategic framework for the company’s future goals, senior management identifies the positionsnecessary for growth and the best candidates to fill those roles. Some organizations invite allemployees to take part in an assessment process, while others have managers identifyleadership candidates.

If companies wish to grow leaders from within their existing talent pool and have the time andresources to develop a useful program, effective talent management will become a keycomponent of its long-term human capital strategy.

The advantages of this model include:



• Identifies a specialized talent pool• Defines and builds future skills required for the success of the organization• Motivates and retains employees by involvement in their career growth

Some of the disadvantages of this type of model include:

• Expensive and time consuming• Existing employee-base may not have required skills and experience for key posts and

outside hiring can lead to resentment• Managers may be frustrated by not being allowed to choose a successor

Combination of both the plans

This model allows senior management to plan for the long-term growth of both the organizationand employees within the organization and prepare for emergency replacements to ensure that

business is not affected by knowledge loss or lack of skilled employees.

HR professionals will find that the advantages of succession planning greatly outweigh thedisadvantages, which can be overcome by proper planning and communication within theemployees and senior management.

Advantages of Succession Planning

We are currently witnessing the impact of an emerging and dire necessity of the new trend of succession planning and talent management systems. HR professionals no longer think justabout the replacement of talent, but also focus on development of skills sets and knowledge of employees within the organization and how they can cope-up to the wider roles andresponsibilities which are in-line with the company’s goals.

Succession planning helps you take a more strategic approach to leadership development,employee skill assessment and perhaps even more important as baby boomers retire –

preserving critical organizational knowledge. With incumbents ready to go any time an

expected or unexpected change occurs in your organization, you can ensure business continuityat all levels of the organization.

Organizations use succession planning to achieve a number of objectives like:

• Improve recruitment process for key positions• Active development of longer-term prospective successors by ensuring their career

growth and analyzing work, responsibilities, skills and knowledge required for the future• Audit the ‘talent pool’ of the organization and that helps in allocation of responsibilities

and development strategies and fill the identified talent gaps



• Build a ‘key talent resource’ of employees who share key skills, knowledge, experiencesand values seen as important to the future of the organization

To summarize, the main advantage of succession planning in an organization is the activedevelopment of a strong ‘talent resource’ for the future which is vital to attract and retain the

best and key people which will help in present and more for the future growth of theorganization. Have the right people with right skills in the right jobs doing the right things. If they people are doing wrong things then you are right back where you started.

The key is to match the needs of the organization to the goals of the individual. Keepingtalented people in place by providing them with opportunities they may not receive elsewherewill create a stronger and more loyal group of future managers and executives thus saving thecompany’s recruiting and hiring costs over the long-term.

Succession Planning ToolsSuccession planning starts when you can accurately measure the performance of the employeesassess skills and career growth information. Succession planning tools need to have extensiveintegration and customization options to support all of your talent management efforts.

To identify a correct succession planning and talent management system you need to have asoftware that -

• Has a performance management system that delivers accurate data.• Self-service online resumes for employees.• Has a recruiting system that enables to transfer information on new hires directly to your

succession planning analysis and data.• Integrates with your HRIS position/job management data with links to competencies and

other qualifications.• Is a powerful bench strength assessment tool that can share, review and analyze data to

provide latest and updated information.• Uses easy interactive tools or matrices for assessing employee potential, flight risk and

impact of loss.• Provides the needed framework for effective gap analysis.• Has a search capability based on multiple filters and employee characteristics.•

Provides a view of your succession plan in any format, including organizational chartswith concern areas highlighted.• Provides with a complete career inventory data for each employee readily at hand,

managers can specify targeted future jobs for colleagues and indicate a readinesstimeframe.

• Customizable email reminders.• Informative visual reports and dashboard.

Voluntary Retirement Scheme



In the present globalised scenario, right sizing of the manpower employed in an organisationhas become an important management strategy in order to meet the increased competition. Thevoluntary retirement scheme(VRS) is the most humane technique to provide overall reductionin the existing strength of the employees. It is a technique used by companies for trimming theworkforce employed in the industrial unit. It is now a commonly method used to dispense off the excess manpower and thus improve the performance of the organisation. It is agenerous,tax-free severance payment to persuade the employees to voluntarily retire from thecompany. It is also known as 'Golden Handshake' as it is the golden route to retrenchment.

In India, the Industrial Disputes Act,1947 puts restrictions on employers in the matter of reducing excess staff by retrenchment, by closures of establishment and the retrenchment

process involved lot of legalities and complex procedures. Also, any plans of retrenchment andreduction of staff and workforce are subjected to strong opposition by trade unions. Hence,VRS was introduced as an alternative legal solution to solve this problem. It allowed employersincluding those in the government undertakings, to offer voluntary retirement schemes to off-load the surplus manpower and no pressure is put on any employee to exit. The voluntaryretirement schemes were also not subjected to not vehement opposition by the Unions, becausethe very nature of its being voluntary and not using any compulsion. It was introduced in boththe public and private sectors. Public sector undertakings, however, have to obtain prior approval of the government before offering and implementing the VRS.

A business firm may opt for a voluntary retirement scheme under the followingcircumstances:-

Due to recession in the business.Due to intense competition, the establishment becomes unviable unless downsizing isresorted to.Due to joint-ventures with foreign collaborations.Due to takeovers and mergers.Due to obsolescences of Product/Technology.

Though the eligibility criteria for VRS varies from company to company, but usually,employees who have attained 40 years of age or completed 10 years of service are eligible for voluntary retirement.The scheme applies to all employees including workers and executives,except the directors of a company. The employee who opts for voluntary retirement is entitledto get forty five days emoluments for each completed year of service or monthly emoluments atthe time of retirement multiplied by the remaining months of service before the normal date of service,whichever is less. Along with these benefits, the employees also get their providentfund and gratuity dues. Compensation received at the time of voluntary retirement is exemptfrom tax under section 10 (10C) of the Income Tax Act, 1961 upto the prescribed amountupon fulfilling certain stipulated conditions. However,the retiring employee should not beemployed in another company or concern belonging to the same management.

http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=194714

http://business.gov.in/outerwin.php?id=http://www.taxmann.com/TaxmannDit/DispCitation/htmpage.aspx?fn=http://www.taxmann.com/DitTaxmann/IncomeTaxActs/2006ITAct/section10.htm

http://business.gov.in/outerwin.php?id=http://www.taxmann.com/TaxmannDit/DisplayPage/dpage1.aspx?md=2&typ=cn&yr=2006

http://business.gov.in/outerwin.php?id=http://indiacode.nic.in/rspaging.asp?tfnm=194714





The companies can frame different schemes of voluntary retirement for different classes of their employees. However, these schemes have to conform to the guidelines prescribed in rule 2BAof the Income-tax Rules . The guidelines for the purposes of section 10( 10C ) of the Incometax Act have been laid down in the rule 2BA of the Income-tax Rules . The guidelines providethat the scheme of voluntary retirement framed by a company should be in accordance with thefollowing requirements, namely :

It applies to an employee of the company who has completed ten years of service or completed 40 years of ageIt applies to all employees (by whatever name called), including workers and executivesof the company excepting Directors of the companyThe scheme of voluntary retirement has been drawn to result in overall reduction in theexisting strength of the employees of the companyThe vacancy caused by voluntary retirement is not to be filled up, nor the retiringemployee is to be employed in another company or concern belonging to the samemanagement

The amount receivable on account of voluntary retirement of the employees, does notexceed the amount equivalent to one and one-half months salary for each completed year of service or monthly emoluments at the time of retirement multiplied by the balancemonths of service left before the date of his retirement on superannuation. In any case,the amount should not exceed rupees five lakhs in case of each employee, andThe employee has not availed in the past the benefit of any other voluntary retirementscheme.

Some companies offers very attractive package of benefits to the employees who opt for VRS.For example, the VRS scheme may also include providing counselling to employees about their

future;managing of funds received under the scheme; offering rehabilitation facilities tothem,etc.

A company may make the following announcements while implementing a voluntaryretirement scheme:-

The reasons behind downsizing the organisation.The eligibility criteria for voluntary retirement scheme.The age limit and the minimum service period of employees who can apply for thescheme.The benefits that are offered to the employees who offer to retire voluntarily.The rights of the employer to accept or reject any application for voluntary retirement.The date up to which the scheme is open.The income tax benefits and income tax incidence related to the scheme.It should also indicate that the employees who opt for voluntary retirement and accept the

benefits under such scheme shall not be eligible in future for employment in theorganisation.

Voluntary Retirement Schemes have been legally found to be giving no problem to employers,

employees and their unions. But, the retrenchment plans of an organization must be compatible

http://business.gov.in/outerwin.php?id=http://www.taxmann.com/TaxmannDit/DispCitation/htmpage.aspx?fn=http://www.taxmann.com/DitTaxmann/IncomeTaxRules/Rules2003/Rules002BA.htm












to its strategic plans. Its procedure and reasons for introduction must be discussed with allmanagement staff including top management. One need to identify departments or employeesto whom VRS is applicable and thereby formulate its terms and conditions and also state the

benefits that would be available to those who took VRS. Such information should be madeavailable to every employee of the organization, mentioning the period during which thescheme will be open. Also,existing employees might face insecurity because of fear of losingtheir job too. One of the possible drawback of the VRS is that the efficient employees wouldleave the company while the inefficient may stay back. Thus it is the /responsibility of theemployer to motivate them and remove their apprehensions and fears.

Mainstream economists perceive voluntary retirement as a measure to shed the workforcewhose marginal productivity is zero. Further, it is argued that this could be introduced in anindustrial organization for maintaining its cost effectiveness in an increasingly competitiveworld. Moreover, voluntary retirement is accompanied by technological modernization thatwarrants the replacement of labour with capital. Technological modernization improves the

productivity of existing workforce so much so that a section of the existing workforce becomes

again redundant even as modernization enhances the installed capacity of the technology. Theworkforce that becomes redundant in this process has to retire or be retrenched. The rationale behind the introduction of voluntary retirement scheme (VRS) in India is that any organizedindustrial organization has to operate within the existing legislative framework, which does notallow the organization to shed the redundant workforce without adequate compensationEmployers refer to VRS as 'golden handshake', trade unions call it 'voluntary retrenchmentscheme', and for the government, it is 'unstated exit policy' which means that an exit policywhich may not exist on paper. VRS is one of the strategies introduced in the early 1980s incentral public sector undertakings (PSUs) to reduce the so called surplus or redundantworkforce. It gained publicity after the introduction of new economic policy in 1991. In India,the government employs more than 70 per cent of the organized workforce; it uses all itschannels to reduce the organized sector of the workforce without antagonizing the trade unions.It is envisaged in the new economic policy that VRS can provide minimum sustenance securityto the retired individual and his family. Trade unions play a crucial role in introducing the VRSin any organized sector firm. The scheme cannot be implemented without, at least, the tacitapproval of the representative union. Sometimes without the consent of the trade unions,workers legalize the VRS by accepting it en masse. Very recently, the entire workforce of SriRam Mills (1,400 workers) has accepted VRS while the major union opposed the scheme toothand nail. Other companies such as Ind Auto, SKF Bearings, Novartis, Biddle Sawyer, and

Siemens have also been able to successfully reduce their workforce through the introduction of VRS. When the workers are convinced that the scheme is sufficiently attractive monetarilyand/or the company is in deep crisis, they opt for the scheme. When workers find the company's

performance good, they refuse to accept the scheme. In such situations, trade unions throughvarious strategies (for instance, by exposing the status of those workers who have acceptedVRS) persuade workers not to accept the scheme. A study by Shri Ram Center for IndustrialRelations and Human Resources in 14 industrial centres of various states revealed that workersopted for VRS due to apprehension of closure of firms or personal reasons such as poor health,clearance of debt, marriage, education of children, etc. Another study observed that complaintswere recorded by some of the VRS workers who came for retraining under NRF that invisiblediscrimination affected their prospects for promotion in the organization where they were



working. Thus, the atmosphere of discrimination and apathy towards the socially disadvantagedgroups is also forcing most of the workers belonging to these groups to opt for VRS. The mainobjective behind the scheme is to send out those who cannot be retrained in new skills. The

premise of the argument appears to be weak. The liberalization policy, in its anxiety tomodernize, restructures and globalizes the products of Indian industry, is wasting preciouslabour force that could have been modernized through retraining and on-the job training.Precious skills and abilities of the retrenched workforce are equated with worn out physicalcapital that may not be susceptible to repair or modernization. Are human beings not capable of learning and modifying their knowledge, skills and applying the same to produce higher output? The current emphasis on restructuring does not allow such questions. The free economyand trade liberalization have ushered in the need for the enterprises to have a competitive edge.Economic forces have led to organizational cost cutting, changes in production processes,exploration of new markets, plant relocations, modernizations, downsizing and structuralchanges. Organizational adjustment at all levels has become extremely imperative. Over manning has crept into almost all industrial units on account of the inability of the enterprises toreduce or adjust workforce as per the business needs. The sort of cuts that only happened in

heavy industries has now become widespread. The days of nibbling away deadwood have longgone. It's time for the organizations to realign and focus on the core competencies.

The Golden Handshake

The Voluntary Retirement Scheme (VRS) is the latest mantra of many a corporate and Publicsector units. The company may decide to declare a VRS based on their HR plan and suitability.For a common salaried individual this becomes a major decision. The company as per their human resource policy declares VRS or the Voluntary Retirement Scheme. VRS is a schemewhereby the employee is offered to voluntarily retire from his services before his retirementdate. Subject to certain conditions the company offers VRS to its employees It is the goldenroute to cut the excess flab. The most humane technique to retrench the employees in thecompany today is the voluntary retirement scheme. It is the golden handshake for theemployees and the only option today for the companies to downsize their headcount. Thescheme which is formally permitted by the Department of Public Enterprises and which

provides the lucrative way for the employees to terminate their services and accept VRS.As the name suggests the VRS is strictly voluntary i.e. one can neither compel the workers toaccept it nor apply it selectively to certain individuals. One can however choose the levels, unitsand age groups among whom one wants to offer VRS. But the company can always accept or

reject the application for the VRS. But usually this is not done in practical circumstances as itsends wrong signals to the employees. It might imply that the VRS is not actually voluntary buta selective procedure of downsizing.

Technicalities

The Voluntary Retirement Scheme is a legal way to down size and thus it involves certaintechnicalities. The VRS candidates must have worked for the organization for minimum of 10years and also the age of the worker must be minimum of 40. Employees not complying withthese conditions still can apply for the early separation but it would not be counted as the VRSlegally. Thus these employees won't be able to avail the benefit of tax exemption. The



employees receiving VRS can get the tax exemption for the amount of Rs. 5 lacs lumpsum.Anyone receiving more than Rs. 5 lacs would be charged under Income Tax Act. Thus anemployee opting for early separation and not fulfilling the age or experience criteria would betaxed on the whole amount he receives. However the lumpsum amount could be lower of thefollowing:

· Three months' salary for each completed year of service.· The monthly salary at the time of applying for the VRS multiplied by the number of monthsleft before retirement.

The normal benefits that an employee gets:· Provident fund· Encashed accumulated leave· Gratuity· Salary for the notice period· Cost of transfer to the hometown

Also to make the scheme very attractive for the employees theseverance package as it is calledcan include other benefits like

· Medical insurance· Housing loans· Subsidies on children's education loans, etc.

Hurdles in execution

The Voluntary Retirement Scheme is not as easy as eating the cake. It deals with actual human beings. It deals with the lives of people who are offered to end the careers abruptly and probably do nothing for the rest of their lives. Thus a lot many problems can arise during theactual execution of the scheme. Some of the problems which could be anticipated and for whichappropriate action plan could be drawn are:

· Non- acceptance of the VRS· Over-acceptance of the VRS· Operational problems

· Post-VRS blues

Over and above these anticipated problems, there could be many more problems, which couldarise during the execution of the scheme. These problems may be industry sector specific,industry specific, company specific or any other unexpected problems.The major hurdle in the acceptance of any scheme is trade union. The trade union does noteasily accept such changes even if these changes are made for the genuine reasons. At the sametime over-acceptance can cause a lot of problems, as it is visible in the PSU banks. Also dueto ongoing retrenchment in the company, the company is vulnerable to all sorts of operational

problems. And if the company does not provide for the downsizing the company must be prepared to face the post-VRS blues.



Measures

The company can avoid or reduce the magnitude of any problem occurring due to the VRSscheme. There are certain aspects, which have to be kept in mind before offering the scheme.

· The company must have a genuine reason for the downsizing. It should not be a 'slogan of theweek ' nor should it be to oblige blindly the conditions of the global partner. The company must

be having some genuine reasons to offer the VRS and this is the first step in getting the thingsright.· The company must conduct its manpower planning to analyze the manpower inventory it hasin terms of number and skills and also the manpower inventory it requires to operate at theOptimal level. This planning should be done considering all the aspects like automation,technology upgradation, new working methods like optimization of resources, total qualitymanagement etc.· Depending upon the manpower planning the company should boil down to a number to be

downsized and the period over which downsizing should be done. Keeping these figures inmind the company must move towards offering VRS scheme.· Communication is the most important phase of execution of any VRS scheme. The companyshould make an explicit announcement of the scheme all over the organization at the same timeso as to prevent the spreading of any rumours. The trade union also should be taken intoconfidence and the all the facts of the scheme should be explained to them. They should beExplained the need of the scheme and also told that if this particular number of people are notdownsized the company might face lots of problems in the future which might result intoanything even closure of the company. All the workers in the organization should be explainedthe why's and how's of the scheme. This would make them understand the need of the scheme.They should be communicated the advantages of the scheme like lucrative severance package,

preclusion of any need for enforcement. Also the assurance should be given to all theemployees that whoever accepts the scheme would be helped by the company during the phaseof leaving the company to resettlement. At the same time assurance should also be givento all those employees that those retained could breath easy, as they need not worry aboutfurther retrenchment.· In the actual implementation of the scheme the different age limits are suggested for differentlevels and this concept has been extremely successful. The logic given behind this concept isthat the people with higher skills retain their productivity for the longer time. Also since the

qualified personnel are less in number than that of unqualified ones the model is designed inthat manner. But this theory has received criticism of being biased for the upper class or beingBrahminist. This issue is debatable but it has worked wonders for many companies.· Once the scheme is designed, the company should implement two-pronged strategy of identifying the VRS candidates and also identify the key performers. This can be done byempowering line managers and also through the system of performance appraisal. Once thesecandidates are identified, these employees should be counseled accordingly either to accept theVRS or to stay in the company.· Keep the promises you made, so as to implement the scheme smoothly. Include in theseverance package different benefits,which would help employees to accept the scheme. Alsooffer the option of receiving the package in lumpsum or in the pension form or in combination.



· Making the employees accept the scheme is no the onlyobjective. Also the employees whostay in the company have to be motivated enough so as to keep going. For this key performershave to be individually counseled and also the retraining and redeployment program has to bedrawn so as to keep the managers motivated and so as to adjust to the change in theorganization.

Besides in order to alleviate the effect of the whole exercise, company should take up fewmeasures that will help to maintain the morale of the existing employees.Some of the measures, which could be provided, are:· Outplacement· Help of placement agency· Counseling

Outplacement:

It is the in-house help provided by the organization itself in order to help the employees during

the transition phase from retrenchment to the resettlement. The company can play an importantrole by providing counseling, training, and all the other help required by the employees.Although this involves cost, however compared to the advantages obtained in return, it isnegligible. It not only helps organization to convince employees to accept VRS but also helpsin maintaining the morale of the retained employees. Moreover this exercise also helps increating good corporate image of the organization that can help organization in the long termlike future recruitment.

Placement agency :

Besides having outplacement facility a company can also take the help of placement agency.This agency can appraise, counsel and place the retrenched employees on deserving jobs. Alsothere have been practices where company purposefully asks the agency to tell nice things aboutthe retrenched employees so that they will have the " feel good " factor to keep their motivationeven after the retrenchment.

Counseling :

This is an effective tool to reduce the effect of the VRS. The retained as well as retrenched

employees could be counseled to good effect to keep up their motivation level.

Conclusion

These techniques that are suggested above give the humane touch to the downsizing. This isvery necessary because it is not only the posts that are downsized but there are human beingsinvolved in this process. This process should convince them that the posts in the organizationhave become redundant and not the person and the organization still values the person. Sincethis process involves emotions and feelings, every care must be taken by the managementthat the process must be carried out in such a manner that it keeps the dignity of the employees

but at the same time achieves the objective in a tactful manner.



Pink slipPink slip refers to the American practice, by a personnel department, of including a dischargenotice in an employee's pay envelope to notify the worker of his or her termination of employment or layoff. Receiving a "pink slip" has become a metaphor for the termination of

employment in general. According to an article in The New York Times, the editors of theRandom House Dictionary have dated the term to at least as early as 1910. The origin of the

phrase is undetermined, and there is no evidence that termination notices were ever traditionally printed on pink-colored paper.

You’re Fired! 20 Signs That a Pink Slip is Coming~ There are two types of employee. One has a good idea of what they do, who they are and what

position they play in the company. They are savvy. They know the score. They are under no

delusions, and will no doubt leave for another job long before they are ever considered ascannon-fodder.

And then there’s the other kind. The guy who could get Gandhi to hate him. The woman whospends most of her day chatting on the phone to friends or doing online shopping. Or the nicechap in sales who is completely oblivious that the recent merger means his job is now obsolete.They all have Ostrich Syndrome. They couldn’t see a pink slip coming if it was 8ft tall andglowing in the dark, screaming “you’re fired!”

You want to avoid being in that 2nd category at all costs.If you can answer yes to THREE or more of these questions, you may want to think about sprucing up your resume and dry-cleaning your best interview attire.

1 – Are you no longer in the loop about, well, anything?This is a huge telltale sign. Suddenly you’re finding out about company news from the cleaninglady or the new girl in accounting. If you were formally in the know about all things businessrelated, but now suffer from “the company’s doing what??!” disease, the writing is probably onthe wall.

2 - Did you recently screw up big-time?We’re not talking a minor faux pas here. Did you lose money on an account that was previously

bulletproof? Oh dear. Were you caught having sex on the boss’s desk with the boss’s spouse?That’s probably not a career-enhancing move. Unless you’re a real dope, you know if you havescrewed up. And if you know, HR knows. It may not be the final nail in your coffin, but it’s anail in the coffin nonetheless.

3 – Are people avoiding you at all costs?Eye-contact is difficult to make with someone if you know his or her head’s on the chopping

block. Small talk is just as tough. It’s best just to avoid that person altogether. So if people are



no longer doing that fun “stop ‘n’ chat” in the hall, or the coffee room empties when you arrive,then guess what…you may be a marked man or woman.

4 – Did your last performance review read like a train wreck?Most of the time, a performance review is a whole bunch of niceties. The boss really doesn’twant to say anything TOO good, because everyone has room for improvement. But generally,they praise within reason and avoid anything too negative. So if your review paints you as astupid version of Homer Simpson with less talent than a Backstreet Boy, well, that tap on theshoulder is coming.

5 – Has your company recently been sold or merged?This is rarely good news for about 90% of the staff. Sure, management is fine. After all, theynegotiated the deal. But whether you were sold or merged, the outcome is the same…changeswill be made across the board. A merger means duplication of many jobs. Duplication =redundancy. Being sold means new management, and they always have new plans for thecompany. New plans that includes cutbacks and layoff. Basically, watch your back if there’s a

new name on the front door.

6 – Are you being given impossible jobs with no chance of success?This one is underhanded, which is why it’s so popular. The company may need a big reason togive you the boot, especially if you’ve done everything right and are the life and soul of your department. Enter the impossible task. “Ahh Wilkins, we need you to expand our new line of warm, alcohol-free beers to construction workers.” “Johnson, how’s that line of umbrellasdoing in the new L.A. store?” You get the picture. If you’ve been given a thankless task, at least

be thankful for the blatant tip-off that you’re about to be let go.

7 – Do you now have less responsibility than the intern?Ouch. Being stripped of your responsibilities is a sure-fire sign that there’s somethingunpleasant on the horizon. After all, you don’t fire someone who’s got a ton of important work to do, with loads of people underneath him/her. So, over time the poor sucker in management’ssights will be given a new job title, less work, less people (or no people) and will eventuallyhave a hard time finding anything of any real value to do all day. Not long after this, that sameemployee will be out on the street. In fact, if you’re at work and have enough time to read thisarticle, you may very well be in the firing line.

8 – Has your office, cubicle or working space recently been down-sized?Remember poor old Milton in Office Space being moved from one small space to another, untilhe was eventually sat in the dark, in the basement, dealing with pest problems. Well, this is notso far from the truth. When employees are in the firing line, it’s a lot easier to move themaround and downsize their environment without worrying about their morale. If you are readingthis in your new 6ft by 6ft cubicle with no lights on a 1999 PC with a 200MB hard drive, you’renot exactly a valued employee any more.

9 – Do people whisper more, or does the conversation change as you approach?If you’re marked for termination, you’ll be the last one to know about it. And being the grown-up responsible people that they are, your co-workers will be quite happy to whisper about your



impending doom in a dark corner of the coffee room. Until you show up, when suddenly theconversation will change abruptly to something really original…like the weather.

10 – Did your recently receive a pay freeze or, worse still, a pay cut?There are a few reasons this could happen, none of them are good. Either the company is introuble and they need to cut costs, or you’re in trouble and they don’t want to pay you. If it’sthe first one, you may not necessarily be in immediate danger but no-one wants to work for acompany that’s going down the tubes. If it’s the latter, well, your boss is basically telling youthat you’re about as welcome as a fart in an astronaut suit. Begin the job hunt immediately.

11 – Have you seen a job posting for your company that matches your job description?Human Resources can be crafty. They don’t want to fire you without having someone waitingin the wings to immediately fill your shoes. That’s why it’s not uncommon to see your own jobout on the Internet months before you eventually get canned. (Worse still) they hire your replacement before you’re fired and get YOU to teach the newbie how to do your job. Nice.Then they fire you.

12 – Does everyone hate you? I mean really dislike you with a passion?If you’re one of those people who are oblivious to this kind of question, please skip to #13. If you have a thread of common sense, read on. It’s not an easy thing to face up to, but you can atleast spot the telltale signs. Do you eat alone at lunchtime? Do people never laugh at your

jokes? Can you clear a room faster than a pack of rabid pit-bulls? If you’re ok at your job butare just not popular, that will be seen as affecting morale. And morale is not something to messwith. Either shape up your attitude, or find a new job that maybe doesn’t require you to work with people on a day-to-day basis.

13 – Have you recently been asked to take some time off?Let’s face it. Companies in America are not prone to encouraging vacation time (compared toEurope, where we get oodles of time off). If it’s not to use up vacation you’re about to lose, or for a genuine reward for a huge project you’ve just finished, then you are in trouble. When the

boss tells you to take a break, they’re more than likely telling you that they’d rather not haveyou in the office. Maybe they’d like to talk about you behind your back (which is a lot easier when your back is in Tahiti). Maybe they need time to figure out how to can you. Either way,it’s all a lot easier with you out of the picture. Time off = firing scenario.

14 – Are you noticing paper-trails between yourself and your superiors?A quick word in your ear used to be just fine. A phone call was great. A stop ‘n’ chat in the hallwas a regular occurrence. But now everything is happening via memos and emails. There’s areason for that. HR requires written/printed evidence of everything if there’s to be a firing. A

paper trail is necessary to determine that your boss did everything by the book, and to recordevery single one of your screw-ups. So, if you’ve gone from getting a few memos and emails aweek, to a daily deluge of paper and a full inbox, these are warning signs that you’re beingwatched very closely.

15 – Are you finding it almost impossible to get approval or ‘buy in’ on projects?



Think back. A long time ago, people would green light your projects faster than the RoadRunner on amphetamines. But that’s no longer the case. The boss is suddenly silent when itcomes to approval. You’re being passed around fro middle-manager to middle-manager. Youget voicemail 99% of the time you call someone for their opinion, and the other 1% it’s their secretary…who then puts you through to voicemail. No-one is going to green-light a projectfrom someone whose time is up at that company. They don’t want to associate themselves withthe kiss of death that is your idea. If it happens to be a great idea, no worries, they’ll take creditfor it once you’re gone. The silent treatment is a sure sign of pink-slip disease.

16 – Have you recently been asked to work on a “special project?”This could have many other names. “New company initiative” or “Confidential researchassignment” are other known terms for this. But it basically comes down to one role…the

project takes you away from REAL work and puts you on something that’s either mildlyimportant, not important at all, is going nowhere, or is just plain useless.

“Hey Smith, how is that special project on frozen concentrated orange juice coming along?”

“Fine Sir. Can I ask what this has to do with the IT department?”“Oh, you’ll find out Smith. You’ll find out.”

Rule of thumb. The second you are asked to leave a project you know is important for one thatsounds like a bunch of bologna, your career is heading south quickly.

17 – Are your successes and accomplishments being glossed over?This one’s tricky to work out, because most bosses and coworkers are weasels who will happily

play down your role in order to make themselves look good. But, judge this one by looking tothe past. Did you boss used to praise you up to management? Were you a golden boy or girl?That’s great. But if it’s now impossible to get praise for doing something spectacular, likedoubling company profits, then you’re being disrespected and probably have a large ‘fire me’target printed on your forehead. If you’re not getting kudos, you may be getting fired.

18 – Are you currently being ‘retrained’ or are taking coaching sessions?Again, a tricky one. Retraining or coaching is often a way to try and save an employee who haslost his or her way. It shows that the company or your boss still gives a crap. BUT, it also has adarker side. It’s another one of those ‘cover the company’s butt’ scenarios, in which HR demonstrates they did everything they possibly could to make things work. And alas it didn’t,

so they had to let you go. Not a major warning sign on its own, but combined with a few others,this has danger written all over it.

19 – Has your immediate boss or mentor gone bye-bye?If someone you trusted and respected, like a boss or mentor, is no longer around for whatever reason (promotion, fired, quit) this could spell trouble. This person may have been the only onekeeping the wolf from your door. And there’s an easy way to find out. Is it now impossible toget projects approved? Are you being left out of meetings? Does nothing run smoothly now thatthis person is no longer on the scene? If this is the case, that’s cause for concern.

20 – Have you recently been promoted to a position of less responsibility?



As of June 30, 2008 Satyam had manpower of 51,643. Although the number of staff beingretrenched is quite small now, it probably is just the tip of the iceberg, sources say. Sourcesreveal that the phenomena of showing the pink slip to employees in the Indian IT servicescompanies is expected to become rampant. The reason, say insiders, is that large pipeline

projects, mostly in the BFSI - banking, financial services and insurance - segment, that ITcompanies were expecting to come through, have been put on hold due to the recession in theUS economy.

report on succession plannig and vrs slip

Documents