To ensure a smooth separation of the Employee from the organization, every employer should frame a proper Exit or Separation Policy for their organization. An exit policy governs the activities when an employee voluntarily chooses to resign or is terminated by the employer. The Exit policy is beneficial to avoid any misunderstandings during separation, it helps in eliminating any dispute between the two parties(employee and employer). The Exit policy should be drafted considering various central and state laws.
To eliminate various complications in drafting exit or separation policy, PayHR helps in understanding how to create a suitable exit policy for an organization.
Why Exit and Separation policy is important for any organization?
When employees leave an organization it is important to have a strategy that should manage their exit. This is essential because just like the HR team focuses on perfectly onboarding new employees by providing correct training and skill development, it should also be HR's responsibility to have a proper strategy for employees leaving the company.
Also in today's competitive environment employee eagerly awaits for a new opportunity with a decent salary hike, which is a currently ongoing trend. Due to this the tenure of an employee with an organization is for shorter periods, comparatively the trend what prevails 10 to 15 years back.
Because of the above mentality, organizations now-a-day strengthen or complex their exit process. Having a clear process to follow during Employee Exits will ensure employer to protect their business and its assets, and help the Employee leave with dignity. It is also a great time to get feedback from employees about their workplace.
The purpose of an employee exit policy is to have a process in place. When an employee resigns from their position, they should submit a written letter of resignation to their immediate supervisor based on their notice period which is stated in the employee's appointment letter or HR policy or Exit policy. During the employee’s notice period, they must continue to assume their normal responsibilities and should assist with a handover to the existing team or their replacement if in place.
The process to follow when an employee exits from the organization?
- The employee should initiate the Exit request
- The manager or immediate supervisor should review the exit request
- Initiate Employee retention strategies
- If retain, then roll back exit process
- If not, then begin termination process
- Get exit formalities started
- Get the position filled and start handover process
- Get clearance form signed from exited employee
- Clear settlement as per agreed terms
What do you need to include in the Exit Policy?
To start, you need to make sure that define what the policy is all about. This may seem like a no-brainer but it's very important that your employee voluntarily chooses to resign or is terminated by the employer.
A voluntary resign is when an employee leaves on their own. If an employee gets a new job, puts in their notice, and then makes an exit, that is completely voluntary.
Firings are often labeled as a voluntary termination, too, because the employee has done something within their power to get terminated from the organization.
An terminated by employer is when an employee has no control over their termination at all. Layoffs, closings business, and others.
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