A Survey of the Criteria Used by Commercial Banks in Kenya to Determine Employees to Retrench

Abstract

The purpose of this paper was to establish the criteria used by commercial banks in Kenya to determine employees to retrench. The findings of the study suggest that commercial banks use seniority (Last-In-First-Out), employees’ individual productivity, misconduct, incapability, early retirement programs, First-In-First-Out (FIFO) and employee obsolescence as criteria for determining employees to retrench. The criterion that is most popularly used is assessment of employees’ individual productivity. Misconduct as a criterion for retrenchment is also popular and some of the behaviors that banks consider as misconduct include fraud, insubordination, regular unauthorized absenteeism, financial mismanagement, leaking out confidential information among others. Early retirement programs are also used to a moderate extent. Last in-First out (LIFO) is used to a moderate extent while incapability as a criterion is used to a less extent. It was also found that all banks use the same criteria despite their age, ownership and size.