Voluntary redundancy
Encyclopedia
Voluntary redundancy is a financial incentive offered by an organisation to its employees with the purpose of attracting volunteers to leave the organisation, due to downsizing or restructuring situations. The purpose is to circumvent union employee regulation laws.
The difference between voluntary redundancy and other programmes is that VR often is offered to a selected age group, for example, everyone between 40-50 years with at least 5 years experience.
, in Spring 2006. It offered the programme to 17,000 employees in Sweden
between the age of 35-50, who received 12-16 months full payment, 50,000 Swedish kronor
and a course in entrepreneurship and/or job hunting support. The goal was that a maximum of 1,000 employees would accept the programme.
Delta Air Lines
, in the aftermath of its bankruptcy filing, offered a program that included limited flight benefits for a set period after the separation. In light of rising fuel prices, it turned back to a VR program. The particulars of that severance package are unknown.
Generally, voluntary redundancy lump sum payments are higher than that of involuntary redundancies.
Reasons
A Voluntary Redundancy Programme is often not driven by short term revenue goals. On the contrary, it is rather a question of strategic choices to change the age structure within the company. It is quite often said that Voluntary Redundancy is a consequence of a company’s lack of structural capital which is a part of the intellectual capital (IC). According to research, people who accept voluntary redundancy tend to return to the company after a while and influence the company with new ideas.The difference between voluntary redundancy and other programmes is that VR often is offered to a selected age group, for example, everyone between 40-50 years with at least 5 years experience.
Real world instances
A world wide company that recently used a VR programme is LM Ericsson, also known for the partnership with SonySony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
, in Spring 2006. It offered the programme to 17,000 employees in Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
between the age of 35-50, who received 12-16 months full payment, 50,000 Swedish kronor
Swedish krona
The krona has been the currency of Sweden since 1873. Both the ISO code "SEK" and currency sign "kr" are in common use; the former precedes or follows the value, the latter usually follows it, but especially in the past, it sometimes preceded the value...
and a course in entrepreneurship and/or job hunting support. The goal was that a maximum of 1,000 employees would accept the programme.
Delta Air Lines
Delta Air Lines
Delta Air Lines, Inc. is a major airline based in the United States and headquartered in Atlanta, Georgia. The airline operates an extensive domestic and international network serving all continents except Antarctica. Delta and its subsidiaries operate over 4,000 flights every day...
, in the aftermath of its bankruptcy filing, offered a program that included limited flight benefits for a set period after the separation. In light of rising fuel prices, it turned back to a VR program. The particulars of that severance package are unknown.
Generally, voluntary redundancy lump sum payments are higher than that of involuntary redundancies.