Whirlpool of Voluntary Retirement Schemes ( VRS)

Case Study in Human Resource Management

Industry : Manufacturing

Industry: Well established, smooth running, multi-crore manufacturing giant, aspiring to be the "No.1" on not only business fronts but political and management horizons too.

You are about to complete tenth year of service in this business house. You are happy and expecting a second promotion.

Situation: One fine day you board the bus in the morning to notice a very special silence. All the chirping, joking, gossiping has come to a stand still .You get to know that your company has accepted the VRS recommendations by the central government. Your bus partner enquires about your age and the number of years of service.

Grapevine: The company may shut down this plant possibly in the next fiscal year due to taxation and infrastructure problems. To begin with they want to cut down the manpower, beginning with managerial cadre, then the vendors followed by the workers…

Facts: Earlier the govt did not allow job termination so easily. The recently elected govt. has a commitment of "job creation" in their electoral "Magna charta" of promises… One brainy idea has come in the form of termination of "old, experienced but sometimes difficult" employees under the disguise of offering "golden shake hand" or "voluntary retirement" Contrast: On one side the country is facing grave shortage of skilled, experienced manpower on the other they are promoting schemes like VRS!!

Challenge:

• You have family of five to support.
• You have to shoulder a housing loan and a car loan.
• Having spent ten years in a particular industry it may not be easy to find a new job.
• VRS is for the employees above forty years of age and / or have completed ten years of service.
• Maximum package of Rs Five lacs is for those having completed 15 years and above.
• You can get a max. Of 2.90 Lacs. Only.
• Once you accept VRS, getting a new job may not be easy.
• If you do not opt for a VRS, possibility of transfer to a remote place or you may be asked to resign , and go without any compensation being in management cadre.




Case Study Questions

Task : You have to make your choice and justify it in not more than five sentences