For the next week we are focusing on exit management, when employee is leaving the company. The compulsory sources are chapter 6 from the course book and a few articles I will go through later on this post.
Employee separations occur whenever an employee is leaving the company they are working for. The exit of an employee should be well managed with thought policies. Employee separations have costs and benefits.
There is different types of employee separations, meaning different ways and reasons for workers to leave the company. They may leave voluntarily or involuntarily. Voluntary separations include quits and retirements where as involuntary separations include discharges and layoffs. When employee is leaving involuntarily, there is a lot more paperwork and documentations needed to show that the manager's decision to lay off the employee was fair.
When organization is growing negatively, or downsizing, managers might need to lay off people and negotiate with employees if there would be any possible voluntary early retirees. The programs on early retirement must be managed so well, that the employee does not feel like being forced doing it. They must feel doing it voluntary.
The final stage of cutting expenses and after everything else has been made, should be layoffs. When there is no other options. There are important considerations in policies whenever laying off employees:
If possible, some companies help their laid-off employees with getting a new place to work for or help them on educating themselves for the new career. Using outplacing services helps employees cope with their emotions and minimize the time they are unemployed.
These mandatory links were all about Nokia and its difficulties and layoffs. The first one I read was from Communicating Labor Rights handled the Nokia case where they moved their factory from Bochum, Germany to Romania. It caused massive layoffs for Nokia's German employees and at the same time it was a big movement for Romania getting a large factory. From Nokia's point of view they saved lots of money from salaries when Bochum factory was not beneficial (Communicating Labor Rights, 2008).
Nokia's layoffs and troubles continued throughout the years and in April 2012 Accenture's Symbian developers were let go. Nokia had transferred 1200 developers to Accenture earlier, trying to lower costs from their employees. Employees kept working the same way, just getting their salaries from a different company. Now at 2012 they offered a deal where the workers could get up to 15 months salary in order to re-educate themselves or time for finding a new work place. 40% of the developers took the deal and moved on in their careers (YLE, 2012). This was a great use of outplacing.
Two months later from that, June 2012 Nokia announced they will cut 3500 employees, again, to lower labor costs. Now this time they closed the new factory in Romania opened a few years back. Also 300 people in Finland were let go. It's also mentioned that 1400 workers from Finland are supposed to let go by the end of 2012.
Even though Nokia laid off thousands and thousands of people one after another, according to HRM partners 80% of the previous workers were generally happy on 2016. Nokia offered support for those who left the company aiming to establish their own, financially and through training. Those who started as an entrepreneurs 64% reported themselves doing well, or good (HRM Partners). This supports the image I had from the news I have read over time, that even though Nokia's falling was a big tragedy for many people, they still managed to make it reasonable for the most. They didn't just let people fall into nothing, but wanted to help them to keep working and offered packages, training, and financial aid for those in need.
Communicating Labor Rights. 2008. Nokia Closes Plant in Germany and Recolates in Romania. https://communicatinglabourrights.wordpress.com/2008/01/17/nokia-closes-plant-in-germany-and-relocates-in-romania/ accessed on 1.4.2019
Gomez-Mejia, L.R., Balkin, D.B. and Cardy, R.L. 2016. Managing Human Resources. Global Edition 8/E. Pearson. London. ISBN-10: 1292097248 accessed on 1.4.2019
Palmroth-Leino, E. 2016. HRM Partners. Employees who have left Nokia are generally satisfied with their situation. https://www.hrmpartners.fi/en/2016/04/employees-who-have-left-nokia-are-generally-satisfied-with-their-situation/ accessed on 1.4.2019
Yle, 2012. Hundereds of Nokia's outsourced Symbian developers leaving Accenture. https://yle.fi/uutiset/osasto/news/hundreds_of_nokias_outsourced_symbian_developers_leaving_accenture/5252177 accessed on 1.4.2019
Yle, 2012. Nokia cuts 3500 jobs to ensure ''profitability''. https://yle.fi/uutiset/osasto/news/nokia_cuts_3500_jobs_to_ensure_profitability/5431070 accessed on 1.4.2019