Retirement
Like a quit, normally a retirement is initiated by the employee. Though, a retirement differs from a quit in a number of ways. Primary, usually a retirement occurs at the end of an employee's career. A quit may happen at any time. Secondly, usually retirements result in the retiree's attaining benefits in the form of provident fund, gratuity, pension, encashment of earned leave etc., from the organisation. People who give up do not receive these benefits, (without a smallest qualify service period in case of voluntary separations). At last, normally the organisation plans retirements in advance. HR staff may groom present employees or recruit new ones during the intervening period in a methodical way. Quits are not simple to estimate and plan for. Workers retire from service on account of two reasons:
A. Compulsory retirement: Government workers retire compulsorily after attaining the age of superannuation (either 58 or 60). In any private sector, the retirement age might well go beyond 60, based on a person's ability to perform well in a competitive scenario.
B. Voluntary retirement: In case of voluntary retirement, the regular retirement benefits are calculated and paid to all of such employees who put in a minimum qualifying service. Occasionally, the employer might encourage the worker to retire voluntarily- with a view to decrease surplus staff and cut down labour costs. Attractive compensation reimbursement is generally in-built in all such strategy (referred to as golden handshake scheme). To decrease post-retirement anxieties, companies now days organise counselling sessions, and offer investment related services (for example. Citibank, Bank of America). Some of the companies extend insurance and medical benefits to the retirees also,
Box: Why Employees Love NTPC?
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A wide-eyed recruit talks about worker who was in coma for four months previous to passing away. The medical bills come to Rs. 1.5 crore. NTPC took care of it. Other talks about how it takes care of all hospitalisation costs for employees and their families. A third talks regarding how the company sets townships before starting to work on a new plant. Last year NTPC spent Rs 102 crore (17 hospitals run by the company with over 3000 doctors) on medical infrastructure & recovered only Rs. 2 crore of that. The attrition rate, not astonishingly is very small at NTPC.
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c. Death: Some workers may die in service. While the death is caused by occupational hazards, the worker obtains compensation as per the provisions of Workmen's Compensation Act, 1923. On compassionate grounds, some organisations offer employment to the spouse/child/dependent of the employee who dies in harness.
The usual separation of people from an organisation owing to retirement, resignation or death is known as 'attrition'. It is initiated by the individual worker, not by the company.