Question

You are a human resources manager. Due to an economic down turn, you are required to terminate two employees. You are asked to consider two employees in order to determine what their pay in lieu of notice (severance package will be). On review of the files, you find the following information:

Employee #1 – Paul

•           Employed for 3 years

•           Current position is vice-president with 20 employees reporting to him

•           40 years of age

•           Has unique skills

Employee #2 – Mary

•           Employed for 30 years

•           Works as an administrative assistant

•           50 years of age

List two factors to consider in determining the severance package for each of Paul and Mary. Plus with respect to each employee indicate whether that factor will increase or decrease severance payable. ( Alberta, Canada)

Answer 1

Answer) As a company it is important to be respectful towards employees you are letting go of as that shows company in a good or bad light and a great employee may never join your organization,if you are being disrespectful or unfair to employees you are saying goodbye to,following are the two main factors(along with other factors) which I would consider as a human resource manager in determining their severance package.

1. Employment tenure with the company-As this factor shows loyalty to the company as well as for employee working for decade or so at one company will find it difficult to adjust somewhere else once let go off.
2. Age-Aged employees will find it difficult to find a new job,consider someone in their late 50's ,with few years for normal retirement age,a lot of companies may not find them suitable enough.

Apart from above two factors ,we will consider following factor as well

• Position-This factor is important as someone who was getting a higher salary will find it difficult in case of lack of opportunities to maintain their standard of living.

Now,with respect to each Paul and Mary,let us consider whether above mentioned factors will increase or decrease their severance package

Paul

1. Employment tenure-Paul had a reasonable tenure of 3 years but it is not very long and will not qualify him for increase in package,in fact at all it will negatively impact package.
2. Age-Paul is 40 years old which is not old for him to find a new job,that is age will not be a hurdle in his search for employment,so this again will be a negative factor in severance package.
3. Position-Paul was at a higher position of Vice President and as such he will be positively impacted in terms of severeance package by virtue of his position in organization.

Mary

1. Employment tenure-With 30 years of service,Mary will get increase in severeance package as she was part of company for such a long period and will be eligible for certain bonuses too.
2. Age-Mary is 50 years old and comparitively will find it difficult to find a new job and hence this factor will also positively impact her severance package.
3. Position-She worked as an administrative assistant and as such she will comparitively not get position benefits in her package,thus this factor will negatively imapct her severance package.

Answer is complete.Thank you!