The role of multiple expectations in determining satisfaction with severance pay benefits

Abstract

A model is proposed that identifies the antecedents, cognitive processes, and impact of severance pay level satisfaction. The model proposes that a number of antecedents affect the expectations of severance pay levels that are (1) desired, (2) most likely to occur, (3) deserved, and (4) minimally tolerable. A general model for understanding layoffs proposed by Leana and Feldman (1992) is utilized to provide the context in which these expectations are compared to perceptions of the amount of severance pay that is actually received by the individual, resulting in either satisfaction or dissatisfaction. The satisfaction or dissatisfaction felt by the recipient of severance pay then influences the relationship between the contextual factors associated with the layoff—such as characteristics of the job loss situation, unemployment rates, and job involvement—and the individual's reactions to the layoff. This personal reaction, in turn, affects the coping strategy selected by the former employee and the final outcomes of the layoff process, reemployment and psychological adjustment. The model and how it relates to the whole job loss process are described, and suggestions for further research are presented.