Voluntary Retirement Scheme Research Articles

The Future of Fixed-term Employment in India

The industrial relations (IR) environment in India and its labour market, have been undergoing significant transformations in multiple domains for around two decades after the economic liberalization. Gillan and Lambert (2013) observe several restructurings at the workplace level in the country. These include, among others, farming out job functions or services to any third party through outsourcing, engaging contract labour in the organized sector, the tendency among managers to avoid acknowledging the right of trade unions to collectively bargain and the prevalence of voluntary retirement schemes for having numerical flexibility of the workforce.

To Study the Impact of Voluntary Retirement Schemes over the Health of VRS opted Employees in India

To Study the Impact of Voluntary Retirement Schemes over the Health of VRS opted Employees in India

Post VRS Employees of PSU in Bangarpet and KGF-Non Farm Sector

Our life and sustenance the employees of the nation, our unsung heroes the public sector undertakings almost lapsed from our memories. From 1930’s to 1990 they were the life and soul of the nation. But ever since the 1991 introduction of the New Industrial Policy and thereafter consecutively the privatization and disinvestment of central and state public sector undertakings the introduction of the golden handshake ,Voluntary retirement scheme(VRS) took place for the last three decades. Post VRS the employees of beml Public sector undertaking were taken for study. The study found that post VRS most of the employees had their own houses. A portion of their house was used to conduct business. Business such as selling Knick knacks which is selling different goods such as papads curry powder, bread, soft drinks, milk, curds and spices, ice cream parlours, vegetable and fruit stalls, Puncher shops, Tailoring shops and Flower shops. The sample size taken was one hundred and fifty and stratified random sampling was carried out with the help of a questionnaire. Interview method was followed and research methodology used both primary and secondary data. For data analysis percentage method followed. The findings showed that though it was a capital light business the returns per month was around Rs.10,000 to Rs,15,000.To conclude post VRS these employees were able to sustain themselves fairly well.

Social conditions of voluntary retirement scheme opted employees among selected large steel manufacturing organizations

Purpose: With the advent of NEP, 1991, the Indian economy has transformed due to liberalization, privatization, and globalization. It has shown clear indication to corporate for technology upgradation, cost competitiveness, and workforce rightsizing, with greater emphasis on quality. However, due to the prevailing protectionist labor laws, the corporate has preferred voluntary retirement scheme (VRS) for right sizing their workforce. Nevertheless, the negligence of the managements, during implementation of VRS, has not only led to the financial losses for corporate but also transformed the lives of VRS opted employees in an unconstructive direction. To analyze the impact of VRS over the social conditions of employees, the present study has been conducted. Research Methodology: For the purpose of research, 311 VRS opted employees of large steel manufacturing organizations have been selected. The effect of various independent factors such as family members, friends, relatives, neighbor, social attendance, lifestyle, and financial conditions over the social conditions of VRS opted employees has been studied in detail. Further, for testing hypothesis, the appropriate statistical techniques such as paired t-test and independent sample t-test have been applied. Findings: It has been found that VRS had negatively impact the social conditions of a section of VRS opted employees and their family members. As, paired t-test has established a significant difference in the social organizational membership of sampled VRS opted employees before and after opting VRS. Implications: Therefore, it has been suggested that management may consider VRS as the last available option, while ensuring the voluntary nature of the scheme. Originality: Until now, no researcher has done, such an in-depth research study in the concern area. The literature on the subject is rarely available. Moreover, the previous researchers have not provided the adequate solutions to the existing research problem.

Optimal Time for Withdrawal of Voluntary Retirement Scheme with a Probability of Acceptance of Retirement Request

Voluntary retirement schemes are observed in certain sectors of the Indian Industry such as Banking and Insurance. There is a need to determine the optimal time to withdraw a voluntary retirement scheme (VRS), balancing the reduction of high compensation of a segment of employees, prevent mass voluntary turnover from the grade, achieve optimal productivity and ensure normal business operations. In this paper an approach to derive an optimal policy to withdraw a voluntary retirement scheme considering a probability of acceptance of a retirement request, cost due to announcing a voluntary retirement scheme and cost to the organisation due to one-time special payments to those who retire during the time period is discussed.

Determinants of voluntary early retirement for older workers with and without chronic diseases: A Danish prospective study.

Aims: This study explored differences in determinants (i.e. health-related, work-related and social factors) of voluntary early retirement between older workers with and without chronic diseases in Denmark. Methods: Workers aged 56–64 years who were members of a voluntary early retirement scheme were selected from the Danish National Working Environment Survey (2008–2009) and were followed in a public register for four years. Cox regression analyses were performed separately for older workers with and without chronic disease to identify the associations between determinants and voluntary early retirement. To explore the differences between groups, an interaction term between the determinant and having a chronic disease was included in the analyses for the total population. Results: Among 1861 eligible older workers, determinants associated with a higher risk of voluntary early retirement included poorer self-rated health, more depressive symptoms, a higher physical workload, lower job satisfaction and lower influence at work. For older workers with a chronic disease (n=1185), the presence of work–family conflict was also associated with a higher risk of voluntary early retirement, whereas for those with no chronic disease (n=676), a poorer relationship with colleagues was an additional determinant. Higher emotional demands, a higher work pace and higher quantitative demands were not significantly associated with voluntary early retirement for either group. None of the interaction terms was found to be statistically significant (p>0.05). Conclusions: Determinants associated with voluntary early retirement did not significantly differ between older workers with or without a chronic disease in Denmark. We conclude that several health-related, work-related and social factors are important for prolonged labour force participation of older workers (with and without a chronic disease).

Employee Unrest at NOKIA India

Nokia India Pvt Ltd (NIPL) was part of Nokia Corporation, Finland. In March 2013, the Indian Income Tax department accused NIPL of evading taxes amounting to USD 3.5 billion. Simultaneously, the market share of Nokia Corporation declined following increased competition from android devices. In September 2013, Nokia announced the sale of its global Devices and Services division to Microsoft Corporation. The Indian IT department freezed the assets of NIPL, disallowing transfer of assets and Microsoft excluded the Chennai plant of NIPL from the deal. In mid-April 2014, NIPL offered Voluntary Retirement Scheme (VRS) to its workers. Despite efforts by trade unions, the plant finally shut operations on November 1, 2014 leaving 30,000 direct and indirect employees jobless. The case discusses the labour relations impact in global manufacturing chains.

Using the Voluntary Retirement Scheme as an HR tool

PurposeThe purpose of this paper is to highlight the significance of the voluntary retirement scheme (VRS) as a management tool for organisational restructuring.Design/methodology/approachThe paper presents the personal view of the author, based on research findings and practical experience.FindingsThe paper advances the viewpoint that to attain the competitive edge and to survive in the current turbulent times, it is essential for the management to right size their organisations. It is imperative for them to look for the right kind of strategies to overcome the redundancy. They have to choose the most viable options considering its financial and legal implications. This would not only help management in maintaining the healthy industrial relations but also enhance the overall organisational profitability and well-being.Practical implicationsThe paper highlights the pros and cons of the VRS. It reflects the financial and legal implications of the same on the employer and employees in the organisations.Originality/valueThis paper depicts how VRS (acts as a management tool and helps in improving organisational efficiency. It basically talks about exercising the VRS and its related legislation in an Indian context.

Impact of Retirement on Mental Health

Impact of Retirement on Mental Health

Impact of Uncorrected Vision on Productivity-A study in an Industrial setting a Pair of Spectacles

Background: According to the World Health Organization (WHO) around one billion people worldwide in developing countries need vision correction. Uuncorrected vision is believed to be responsible for a widespread loss of labour productivity and quality, reading and literacy problems, and other problems such as road and domestic accidents. There is however, a lack of data on both the prevalence and the effects of uncorrected vision. As a result, governments and funding agencies have been hesitant to prioritise vision correction in their health and social development agenda. This acute lack of access to vision correction across the developing world is primarily due to inadequate number of eye care professionals, facilities and the high cost of providing spectacles. Objective of the study: As there are not any studies in the area of uncorrected vision and impact on productivity, this study was undertaken as a pilot study with an intention of understanding the impact of productivity among employees needing vision correction in comparison with those not needing correction but doing identical work, and to measure subsequent changes in productivity following vision correction among the former group through the supply of prescription spectacles. Method: Tthe research was undertaken among a group of 238 workers engaged in spinning and winding function at a cotton spinning and textile factory in Madurai. productivity data was collected for 30 working shifts for each employee. Tthen the eye test was done by a team comprising of Ophthalmologist and Optometrist from Aravind Eeye Hospital (WHO Collaborating Centre) and given the corrective glass to those who were prescribed the correction. after a month of gap given to get used to the glasses, again the productivity data was collected for 30 working shifts for all the samples in the first phase and analysed. Results: Out of the 238 (111 Sspinners + 127 Winders) workers undergone eyesight testing, 187 (90 + 97 Winders) workers needed vision correction which is around 80% of the total test done. Of these 187 needing vision correction, 169 (75%) were presbyopic and needed glasses for near vision correction. All those who were identified as needing vision correction were given spectacles. In terms of productivity measurement, though there were problems in tracking the data each employee wise due to various reasons as the industry was undergoing a transition at that point of time. With the best available data, the spinners showed an average improvement of 9.5% (with a standard error in the mean of 1.6); 44% improved their productivity by more 10% on previous output levels whilst 23% exceeded them by 20%. Tthe winders showed less change after the provision of spectacles with 23% increasing their productivity by 10% of the factory standard, demonstrating that this task made less demand on workers visual acuity. Pradhan, KB120 Conclusion: A significantly higher proportion of industry workers having poor vision due to Refractive error. Tthey never try to correct this error unless the vision problem is a major hurdle in their work and social life. Tthe ignorance may be due to, not a painful problem, access to immediate services in eye care, cost of services, inconvenience in using a foreign object, cosmetic value, no realization of quality and performance attached to work. Constraints: study could have been better if these following constraints were not there Industry was undergoing a transition from Manual to Automation processes. Tthere was drive of Voluntary Retirement scheme (VRSs). If the study team could have got more time to think over the strategy and methodology. Policy Issues: Tthe sight test result showed a high percentage of uncorrected refractive error in a high profile industrial setting. Tthis could mean some percentage of loss of productivity and also a stake in quality of the product due to sight problem. gives an impression to study on subjects who are involved in products linked to productivity and quality like export products, jewellary, thread work, handicrafts, textiles, manual industrial works and also life threatening workers like driving and food products industries, where good sight means a lot. As a policy the industrial settings should include eye testing in to their regular health screening programmes as this has direct implications to the work and outcome of the industry.

A Critical Review of Voluntary Retirement Scheme

A Critical Review of Voluntary Retirement Scheme

The Success Story of Voluntary Retirement Scheme in National Carbon Company: A Unit of Eveready Industries India Ltd

Problem statement: The success story of VRS in National Carbon Company-a unit of Eveready Industries India Ltd., Kolkata, which was the first dry cell manufacturing plant in India, is an eye opener for research scholars, practicing managers, trade union leaders and for the management students. Over the years, technology was not upgraded and so the labor cost of this unit was quite high compared to the other modernized units. The management, in order to make the plant viable took drastic measures of downsizing its workforce through VRS. Approach: The study on the success of VRS in National Carbon Company was to find out the modalities adopted by management to make the VR scheme successful. Results: Downsizing alone cannot reduce labor cost for an industry. Technology upgradation along with downsizing can reduce labor cost. Revision of VR scheme time and again helped the organization to reduce the workforce from 3500-414. Conclusion: VRS cannot be made successful if introduced unilaterally. Positive response in downsizing through VRS can be obtained provided the Trade Union extends wholehearted support for the same.

Impact of Voluntary Retirement Scheme on Retirees and Indian Public Sector Banks: An Empirical Exploration

The paper based on a primary survey conducted in a few selected Indian ·cities attempts to find out the impact of Vol,mtary . Retirement Scheme (VRS) on the post- VRS liF of the employees who opted for VRS (retirees) and on the performance of Indian Public Sector Banks (PSBs). The results point out that the most important reasons for retirement were the financial attractiveness of the scheme, fear of transfer and poor health. It is also revealed that the retirees generally continued to enjoy almost the pre-retirement level of financial and social status. The financial perfonnance of the banks shows improvement after the VRS.

Risk Classification and Public Policy

The economic effects of prohibiting the use of sex and other potentially discriminatory risk classifiers such as age, race or nationality are subject of a lasting debate among insurance economists. It can be traced back to the 1950s and received broad economic attention in the 1980s when spiralling car insurance premiums in the U.S. were blamed on tariff regulations prohibiting the use of sex, age and location as risk classifiers. The majority view today is that the problem of adverse selection arises if insurance firms are unable to distinguish between different types of risks. Risk classification, in this view, is not only a necessary but also a good thing. The leading justifications for risk classification are that without risk classification, low risks are unfairly forced to subsidize high risks, and that risk classification promotes socially beneficial efforts to prevent loss. Dissenting authors have demonstrated that the efficiency cost of prohibiting risk classification are much less than commonly stated. It depends critically on the propensity of people to self-insure (price elasticity of demand). It will therefore differ among branches of insurance, for example be higher for voluntary retirement schemes where savings alternatives exist than for life insurance with few substitutes. It will also differ according to regulatory embeddings, e.g., be non-existent in mandatory insurance schemes (if properly enforced). Critics have also demonstrated that risk classification can be socially wasteful. This is the case if it becomes purely selective. In a world of competitive voluntary insurance, eliminating the most risky from an insurance pool is a powerful tool of competition. It reduces the average cost of insuring the members of the pool, allowing the insurer to offer a lower price and, possibly, obtain a greater profit. This adverse selection ‘‘on the side of the insurers’’, while individually rational, produces a result that is contrary to the interest of society. It inhibits the ability of insurance to spread risk. The latest blow against risk classification comes from the EU’s directive implementing the principle of equal treatment between women and men in the supply of goods and services. This so-called ‘‘Gender Equality Directive’’ aims to prohibit the

Rejuvenation of Amal Products Limited

Amal Products Ltd (APL) was a company situated in the southern part of Gujarat manufacturing intermediate dyes and specialty chemicals, mainly for the textile market. The company incurred losses in 1998 due to the recession in the textile industry and fierce competition from Chinese manufacturers as well as local manufacturers who sold their products at much lower rates than APL. In response to the competition APL went for cost reduction and offered voluntary retirement scheme (VRS) to its employees as one of the measures to reduce cost. 51 out of 264 employees opted for VRS. The case explains the process of VRS adopted by the company and how it helped to save costs. It highlights the role of the human resource department in the successful implementation of VRS and the role of line managers. It explains how a VRS should be handled so that the survivors remain productive. It also mentions the role of various stakeholders in the implementation of VRS. The company has reported profits in 2002.

Downsizing at Pennar Industries Limited

Pennar Industries Limited (Pennar), one of the top ten producers of cold rolled steel strips in India, had 650 workers and 630 staff (non-unionized workers, supervisors, and managers) in 1997. Although over-manned and inefficient, the company had been profitable in the domestic market protected by government licensing and high import tariffs. As real competition, unleashed by globalization, began to bite in 1998, the company bought out 142 workers and 224 staff through a Voluntary Retirement Scheme (VRS). The severance compensation offered was very generous. In spite of reducing the workforce and improving productivity, Pennar ran into heavy losses by 2000. The management decided to downsize further, but it had no money to match the 1998 severance package. The surplus workers would have to go with the statutory compensation and staff without any compensation at all. The unions rejected the VRS for workers outright when they learned that it offered just one-third of the compensation given in 1998. They wanted at least two months' pay. The negotiations went on without any change of heart on either side. Each Head of Department drew up a list of their workers and staff to be retrenched and called the redundant staff one by one and told them to resign and leave without expecting any compensation. Many resigned and left but some resisted and abused the managers verbally, but there were no cases of violence or litigation. The new VRS for workers was formally announced on April 20, 2001. None came forward. They stuck to their demand for eight weeks' pay as compensation. Gradually, however, the workers' resistance weakened and they accepted the VRS and left peacefully. This case is useful for examining the human resource management issues and process for downsizing.

The Kinder Cut: A Macro Communication Strategy for Delivering News of Job Termination

A Voluntary Retirement Scheme (VRS) ought to be good news for employees; it gives them the freedom to retire early with a substantial sum of money, tax free, as compensation. But, in many Indian companies, VRS is retrenchment through the backdoor. Employees identified as redundant or undesirable are pressured to leave. That they have been ‘selected’ for VRS can be devastating news for them especially when finding alternative jobs with similar remuneration and social status is difficult. This paper explores the communication strategies that employers can adopt to deliver well the bad news of job loss. Researchers have been studying the role of communication in softening the blow of job termination. Their discussions tend to be around micro communication strategies that depend largely on the verbal component of the complex communication process. This paper illustrates and recommends a macro communication strategy that would: actively deploy several mutually reinforcing non-verbal as well as verbal moves, especially a range of management actions that work down employee expectations help employees perceive as fair both the company's decision to downsize and the manner of downsizing. A review of several studies of perceived fairness prompts one to conclude that perception of distributive, procedural, and interactional justice helps people accept a variety of unpleasant experiences without anger. If they perceive procedural and interactional justice, they may even overlook low distributive justice. This paper identifies employee expectations that have to be met or worked down by organizations to facilitate the perception of fairness in their job termination. These include: absence of viable alternatives to downsizing adequacy of notice of termination objectivity and transparency in selecting employees to be terminated humaneness in the way the downsizees are treated. As culture and tradition largely determine the scope of some of these and similar expectations, this paper touches upon what Indian employees expect in the event of downsizing. This analysis is followed by a brief discussion of the way three Indian companies of different sizes – Pennar Industries Limited, Pennar Investor Services Private Limited, and Everest Limited – downsized. In the first two cases there was no litigation, violence or strike although the compensation paid was well below the employees' original demand. In the third case there was litigation although an attractive compensation was offered to employees opting for VRS. The first two used a macro communication strategy that conveyed convincingly to the survivors and downsizees alike that the decision to downsize was unavoidable the low compensation offered was fair under the given circumstances the company was treating the downsizees humanely. The third company relied largely on a micro communication strategy driven by logic and data; it did achieve its target of personnel reduction but failed to convince the employees of its fairness.

Implementation of VRS in India

In today's Indian business environment, inter-organization rivalry has become intense. Most of the organizations in the erstwhile protected business environment had focused on production volumes, not necessarily on productivity. Consequently, they often got overstaffed as they tried to neutralize the adverse impact of absenteeism and unionization on production volumes by hiring new staff. Organizations are now exposed to the inevitability of improving productivity in order to survive in the competitive environment. Many of them have taken recourse to Voluntary Retirement Schemes (VRS) to reduce the employee strength. This paper examines different types of VRS offered by organizations in the year 1999–2000 in India. It also examines the effect of VRS on the profitability of these organizations. The authors adopted two approaches to the study. In the first phase, they collected the details of VRS that were announced by organizations in India in the year 1999–2000 and examined the performance implications of these schemes after a time lag of two years. They gathered 30 such responses in total and did a content analysis of these schemes. In the second phase of the study, the authors met managers in four organizations which were selected based on their willingness to discuss about the schemes. Having discussed with the managers, the employees, and the union leaders in these organizations, they developed detailed cases. These cases provided an insight about various qualitative issues relating to VRS. The discussion with managers in the companies showed that managers spent substantial time to decide the following characteristics of VRS: duration of VRS eligibility for VRS discretions with managers compensation The authors considered PAT⁄Total assets as a measure of success of implementation of VRS as, conceptually, VRS should result in improvement in PAT owing to reduction in labour expenses. Further, in the gap of two years after VRS, there would be no expenditure on scheme-related payments as in the first year. It should inflate the change in PAT. Hence, lack of gain in PAT⁄Total assets would be a clear signal of decline of financial performance of the organization in the post-VRS phase. The study reveals that: There is no fixed pattern of VRS among organizations and even the implementation of VRS differs significantly between organizations. The design of schemes that target older employees and remain conservative to work out compensation to employees should be encouraged. The schemes that are kept open for appropriate period of time seem to be more effective. The success of VRS significantly depends on how the scheme is implemented and the perception of the persons opting for VRS and the survivors. Factors contributing to the success of VRS are effective communication, building trust among employees about procedural justice, and involvement of multiple stakeholders.

Living Pattern of VRS Opted Employees – A Study

In the last one decade, the Voluntary Retirement Scheme (VRS) has emerged as the situational compulsion for the basic survival of industrial organisations in India. As a result, thousands of workers are losing their jobs and overnight becoming rootless socially, psychologically and economically. There are instances in which after opting VRS, some people have been murdered by their children due to refusal to give the VRS fund, some have been driven out from homes, and some have died being ill treated, and uncared by their children and family members. The paper based on a survey of VRS opted employees discusses the issues like: (i) Why people opt VRS?; (ii) How they utilised their VRS fund?; (iii) How they find their decision to opt VRS? and (iv) How they are spending their post VRS living and accordingly suggestions have been made both to overcome the problems.

Early Retirement Decisions and How They Affect Later Quality of Life

AbstractOlder workers are often placed in an unenviable position in the face of stereotypes which define them as increasingly marginal in the work force, and view retirement in terms of status loss and disengagement. Yet voluntary early retirement schemes have been a recent feature of work organisations of all types in Britain, Western Europe and North America. The nature of the decision-making processes of those involved in such schemes has not been widely researched and such studies as have been conducted have not drawn on the existing framework of decision analysis. This paper reports the findings of two linked studies into the early retirement decisions of men working in Britain for a large multinational company in the manufacturing sector. The first investigated the factors deemed to be important for a group of men at the point of decision whilst the second investigated both the factors deemed to be important and the quality of life of a group of men who had taken the decision to retire early between 18 months and 3 years previously. Both studies indicated that the decision-making process is complex and cannot be reduced to single-factors like health or financial status. The most important factor in the quality of life of early retirees was the matching of expectations of further work at the point of decision. The studies illustrated the utility of a decision analysis approach to the study of early retirement.