Journal of Education and Practice www.iiste.

org
ISSN 2222-1735 (Paper) ISSN 2222-288X (Online)
Vol.5, No.18, 2014

A Critical Analysis of the Employees Separation Management

Procedures with Regard to Organizational Stability in Kenya
Severina Njagi; Ignatius Munyiri
Mount Kenya University P.O Box 342-01000 Thika Kenya
* E-mail of the corresponding author: [email protected]
Abstract
Proper management of employee separation is crucial in organizational success and stability. It involves inducing
employees to take business risks and training them to deal with different times of austerity. This is so as to avoid
lawsuits by the affected employees.
Employees may be laid off in order to cut costs. This can be done through layoffs, retrenchments, early
retirements and other forms of separation. The effects of these separations can trigger reduced stock prices and
other negative consequences. To avoid these, separations must be well managed and if possible avoided
altogether. This can be done by reducing dissatisfaction and making sure there is good match between employees
and the organization for example. If there must be separation, the benefits must be carefully examined to make
sure that both the organization and the employees create a win - win situation.
Keywords: employee separation, organizational stability, quits, retirements, discharges, employee turnovers.

1. Introduction
Managing human beings is a crucial function in successful business management. Human factor is the most
critical of the resources and requires high management skills in order to avoid spillage and wastage and also to
mobilize all other resources. Human resources are tasks which control the operations of other resources in order
for the organization to realize its set goals.

World economies have of recent times been continually afflicted by economic upheavals in the face of emerging
technology (Barkin, 2010) Human Resource issues such as preparing labor production plans, identifying key
employees that the organization must retain despite declining profits, managing increasing employee stress,
anxiety and depression are common. Rewarding individuals for achieving important milestones, inducing
employees to take prudent risks within their purview of responsibilities are other tasks the hr managers have to
deal with. Cross training employees so that they can relate to different audiences both domestically and
internationally and treating employees in an ethical manner and finally employee separation requires high
managerial integrity.
However , on the backdrop of the present times of competitions and austerity, business organization globally are
engaging in the selection of mitigating measures such as mergers, by offs, layoffs, retrenchments, early
retirements and other forms of separation in order to minimize costs and maximize on profits or for survival.
Whatever method is employed to help reduce the firm’s operating expenses with regard to employee welfare,
proper human resource management procedures, need be observed so as to avoid cases of law suits by the so
affected employees

2. Managing employees separation, downsizing and out placements

The current global economic show down has resulted in greater focus on the financial well being of
organizations and even nations. One way to maintain the organizations fiscal health in the face of difficult
economic conditions is to cut costs .Of course in most cases an appreciable cost of doing business is related to
the costs of the wage bill. For instance the Kenyan government is currently grappling with the cost of financing
the wage bill currently standing at Kenya shillings 820 billion which accounts for 88% of the total revenue
(William Ruto deputy president D.N 15 /03/ 2014), Uhuru Kenyatta recommends a 20% cut on monthly salaries
for high and middle level servants in mitigations which has met with mixed reactions.
However labor costs can be reduced in a number of ways including reduced work hours and wage freezes. In the
extreme, the cost of labor can be eliminated through layoffs, retrenchments, early retirements and other forms of
separation. These are some measures that can be used to improve an organization’s financial performance
although they may not be popular with employees. Down sizing is another measure that aims at reducing
employment levels and which targets the reduction of labor costs while at the same time improving productivity
and financial performance.
The Teachers Service Commission, which is the body with the sole mandate of registering and licensing all

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Journal of Education and Practice www.iiste.org
ISSN 2222-1735 (Paper) ISSN 2222-288X (Online)
Vol.5, No.18, 2014

teachers in Kenya has been battling with a legal suit filed by some 52000 retired teachers over the non payment
of their retirement benefits since 1997. The teachers’ employer did not honour the recommendations in the
agreement arrived at between the teachers’ representatives (Kenya National Union of Teachers), the National
treasury and the teachers’ employer (TSC) back in 1997. (The Standard Newspaper Kenya May 9, 2014).
The affected teachers sued the employer back in 2006 after waiting for over 10 years for the payment of their
dues and after holding many consultative meetings (The Daily Nations News paper – Kenya, April 24, 2012).
The ruling by a three judge bench was in favour of the retirees.
The government of Kenya through the agency of the Teachers Service Commission appealed the ruling in an
effort to avert the payment but again lost the case before the appeal High Court which not only ordered the
government to pay the retired teachers their over Ksh. 3.34 Billion debt owing but also instructed the Inspector
General of Police to arrest and jail the Teachers Service Commission secretary at Kamiti Maximum Prison if he
will not have paid the debt to the teachers within 90 days. (Daily Nation News Paper, May 19 2014).
Nevertheless, there can be some pertinent difficulties such as law suits filed by the affected employees if the
right procedures are not followed.
Lay offs might reduce costs on paper, but in reality they can have unintended negative consequences. The
remaining employees will largely determine whether the lay off will or will not improve the organization’s
productivity and financial health. This will depend more on whether the remaining employees understand the
economic reason for the layoff of their colleagues. An important concern is whether the retained workers are
energized and equal to the tasks of succeeding with fewer members and a smaller membership. Unfortunately,
rather than motivating the retained workers a layoff might deflate the worker force and fan concerns over job
security.
The effects of layoffs have formed the basis for many continuing researches the world over, in the recent past but
it appears that they do not necessarily lead to positive economic outcomes. Conversely, lay off announcements
can trigger reduced stock/ prices for publically traded organizations. Decreased profits, particularly for
organizations that compete on the basis of research and innovations have strongly been linked to layoffs. Overall,
layoffs as with any kind of employee separation can have negative or positive consequences. An important factor
is how well the separation process is managed. A careful risk analysis before instituting a layoff should be
mandatory.

3. Concept of employee separation

Employee separation is the termination of employee’s membership from an organization which amounts to
employees separation. It occurs when an employee ceases to be a member of an organization. Employment
ceasation leads to employee turnover. As a management practice, the manager should carefully monitor the
turnover rate of the subordinate staff to identify and manage causes for turnover with a view to minimizing it and
the costs of replacements. (Recruitment procedures could be expensive too). Replacement costs, particularly for
highly skilled and experienced positions can be amazingly high. Clearly, an excessively high turnover rate
compared to the industry standard can often be an indicator of problems within the organization

4. Types of employee separation

In a broad spectrum, employee separations can be grouped into two categories: voluntary and involuntary
separations. Voluntary separations are initiated by the employees when an employee decides for personal or
professional reasons to end relationship with the employees. The decision so made may be based on several
factors such as:
1. Obtaining a better job opportunities
2. Need for career change
3. Need for more time for family or leisure activities
4. Present job not being attractive because of poor working conditions.
5. Low pay benefits.
6. Bad relationships with supervisor or other colleagues.
In most cases, the decisions to leave are a combination of having alternatives and being unhappy with aspects of
the current job.
Voluntary, separation can be either avoidable or unavoidable. Unavoidable voluntary separation results from the
employees’ life decisions that extend beyond an employees control. A good example is a spouse’s decision to
move to a new area that requires relocation for the employee. Nevertheless, recent studies show that
approximately 80% of voluntary separations are avoidable and many of those are a result of staffing mistakes.
With careful investment in quality Human Resource Management- recruiting, selection, placements, training and

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Journal of Education and Practice www.iiste.org
ISSN 2222-1735 (Paper) ISSN 2222-288X (Online)
Vol.5, No.18, 2014

development programs, companies can avoid a mismatch between the employee and the job thus reducing
chances of voluntary separation. Voluntary separations take the dimension of quits and retirements.

4.1 Quits
Employee separations can be as a decision to quit the job. The decision to quit depends on
i. The employees level of dissatisfaction with the job
ii. The number of attractive alternatives the employee has outside the organization.
The employee can get dissatisfied with the job itself, the environment or both or even more. In recent years
some employers have been enticing employees to quit voluntarily by offering them pay incentive packages.
The government of Kenya is for example considering this option. (President Uhuru Kenyatta. DN
12/03/2014) Employers use these voluntary severance plans or buy outs to reduce the size of their workforce
while at the same time avoiding the negative factors associated with a lay off. The pay incentive may
amount to a lump sum cash payment of six months or two years of salary, depending on the employee’s
tenure with the company and the plan’s design.

4.2 Retirements
As a method of separation, retirement differs from a quit in a number of respects. First, a retirement normally
occurs at the end of an employees career where as a quit can occur at any time. Cordially a quit occurs in early
stages of ones career when they are more likely to change jobs. Second, usually, retirements result in the
individual receiving retirement benefits from the organization. These may include a retirement income
supplement with personal savings and social security benefits. The organization normally plans retirements in
advance while those who quit do not receive these benefits. With proper retirement schemes, HR staff can help
employees plan their retirement, while at the same time giving managers an opportunity to plan in advance to
replace retirees by glooming current employees or recruiting new ones. Quits are much more difficult to plan for
as they may be unanticipated. For example, most employees in the public sector of the Kenya Government are
expected to retire normally on attainment of age 60 years when they are entitled for full pension. Early
retirement incentives make it financially attractive for senior employees to retire early. Together with buyouts,
these early retirements are used as alternatives to layoffs because they are a gentler way of discerning the
workforce.

4.3 Involuntary separations

An involuntary separation is one that occurs when an employer or organization decides to terminates its
relationship with an employee due to a number of reasons such as:-
1. Economic necessity or
2. Mismatch or poor fit between employee and the organization
Involuntary separations are sometimes based on painful and serious decisions that can have profound effect on
the entire organization and especially on the employee who loses the job. The effects may spill over to
dependants and sometimes to the community. The decision to dismiss an employee is made at the management
board meeting and implemented by the managers. Nevertheless, it’s the duty of the HR Staff to ensure that the
dismissed employee receives “Due Process” and that the dismissal is performed within the letter and the spirit of
the organization’s employment policy.
Cooperation and teamwork between managers and the HR staff are essential to effective management of the
dismissal process. HR department can act as a valuable advisor to organizational managers and the entire boards
of management in this arena by helping them avoid mistakes that can lead to claims of wrongful discharge in a
legal redress. They are also required to help protect employees whose rights are violated by managers.
Involuntary separation takes two forms
1. discharges and
2. layoffs

4.4 Discharges
A discharge is a form of involuntary separation that takes place when management decides that there is mismatch
between the employee and the organization. The discharge may be necessitated by either employee failure to
change some unacceptable behavior that the management has tried repeatedly to correct or persistent poor
performance. Sometimes employees engage in serious misconduct such as theft, dishonesty, gross
insubordination, chronic lateness and absenteeism which may result in immediate termination.

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ISSN 2222-1735 (Paper) ISSN 2222-288X (Online)
Vol.5, No.18, 2014

In the event that a manager may decide to discharge an employee, He//she must make sure that the
organizations established discipline procedures are followed. Many times employees are protected by
progressive discipline procedures that allow employees opportunities to correct their behavior before receiving a
more serious punishment. These procedures require that employees be issued with warming notices. Warnings
are to be both verbal and written within specified period of times.
Managers are required to document the occurrences of violation and provide evidence that the employees know
about the rules and that they are warned that their violation could lead to discharge. This acts as a safety valve
for the management and the entire organization as it provides proof that the employee was discharged for just
cause, in case the discharged employee hit back through lawsuit.

5. Management perspectives of separations,

Many business organizations globally are increasingly becoming productive with similar workforces as a result
of competition and technological advances. In addition, voluntary turnover does not appear to be declining and it
is difficult to find replacement (HR FOCUS 2009)
Consequently , managers must not only develop skills to help an employee who leaves the organization
voluntarily but they must also aid employees who have been fired for various causes or are being let go for
economic reasons . If not handled with care, and ending to the employment relationship can change an
organization reputation in its industry or community and limit its ability to attract the scars, talented employees
that it might need in the future.
It’s important to note that sometimes it may be an unpleasant task to manage an organizations outflow of human
resources but the manager must learn the procedure leading to exist from the firm and manage it effectively.
Employee separation can be and should be managed satisfactory so as to achieve effective and efficient
organizational operation while minimizing the costs.

6. Causes of employee turnover

Globally an increased number of job opportunities contributes largely to job hopping thus increasing the rate of
employee turnover as it opens the member of alternatives for workers. The impact of firms having to compete for
qualified workers is exacerbated by employee poaching. A recent survey in China companies, stealing talented
workers is a top cause of employee turnover. Others include:
1. Lack of development opportunities
2. Better career opportunities
3. Insufficient compensation
4. Boring work environment ( Gomez Mejia R.L 2010)
Notably, pay increases aren’t the only or even the most important tool which can be used to manage employee
turnover. Providing training, development opportunities and career advancement options can be equally helpful.
Motivational consideration such as providing challenging tasks, broader responsibilities and greater decision
making authority can make work more meaningful and engaging. A similar opinion was championed by Fredrick
Herzberg in his two factor theory (1968).

7. Employee separation costs

The costs of turnover may differ from organization to another and some pertinent costs may be difficult to
estimate. Some geographical location can necessitate alarming high costs of recruitment for new employees
leading to extra ordinarily high costs of turnover. Furthermore the effect of lost talent on sales, productivity or on
research and development all may be tremendous but difficult to estimate.

8. Benefits of employee separation

Although Employee separations are seen negatively by very many people, they tend to have several benefits.
Separations open up ground for promotions and staff mobility. When turnover rates are too low, few employees
will be hired thus curtailing opportunities for promotions. Second, continued low turnover may give rise to
negative effect on performance as the work force might become complacent and fail to generate innovative ideas.
New promotions and appointments bring along challenging job opportunities and require creativity and
innovation. An employee may receive some potential benefits from separation too. At the same time an
employee may escape from an unpleasant work situation and eventually find one that is more fulfilling and less
stressful.
Third, a reduced workforce size can help an organization in reducing labor costs. However separation costs in a
lay off can be considerably high, but the resultant salary savings from the elimination of some jobs can easily

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Journal of Education and Practice www.iiste.org
ISSN 2222-1735 (Paper) ISSN 2222-288X (Online)
Vol.5, No.18, 2014

outweigh the separation pay and other expenditure associated there with. The government of Kenya is
considering taking this route so as to tame the escalating wage bill which is currently standing at 820BN which
represents 88% of the total revenue. (DN 15/03/2014)
Fourth, replacement of poor performances can improve production. Human resource managers are required to
identify poor performance capacity. If they cannot improve, it may best to terminate their services and replace
them with presumably more skilled employees.
Fifth, opportunities for increased innovation are opened up. Separation creates room for new employees who
may be promoted from within or hired from outside. They come with new innovations that help in improving
business performance by offering fresh perspectives.
Lastly, organizations open up for greater diversity through separation. They get opportunities to hire employees
from diverse back grounds and redistribute the cultural and gender composition of the wok force in compliance
with the government equal employment opportunities policy.
The Kenyan constitution for instance requires that every employee observe a one third gender policy on
recruitment.

9. Conclusion
It is important to avoid staffing mistakes since 80% of separations are caused by such mistakes. Secondly,
mismatches between employees and the job should be avoided and thus prevent voluntary separation. It is further
clear that creating job satisfaction will improve retention in the organization.
If separation must take place, one good method is to introduce early retirements as a gentler way of discerning
the work force. Where involuntary separations must take place, there must be teamwork between managers and
the HR staff so as to effectively manage the dismissal process. Then if discharges have to be effected, prior
warnings both verbal and written must have taken place. The separations will help the employer reduce labour
costs and replace poor performers so as to improve retention and production.. Clear policies regarding
employees’ separations should be put in place and implemented effectively to avoid unwarranted legal battles
and wastage.

REFERENCES
1. Cole a Gerald (2004) Managing Theory And Practice International, Pastow Cornwall Uk
2. Gomez Mr Luis (2009) Managing Human Resources Asoke k ghosh phi ltd – New Delhi
3. The Daily Nation News Paper 24th April 2012
4. The Daily Nation News Paper 19th February 2014
5. The Daily Nation Wednesday 12th March 2014
6. The Daily Nation Saturday 15th March 2014
7. The Standard News Paper 9th May 2014
8. The Daily Nation News Paper 19th May 2014

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