A Brief Note On VRS
Sometimes, excess staff is noticed in the case of a loss making company. Such excess staff is unproductive. This leads high wage bill without corresponding benefit to the organisation/ enterprise. During the execution of turnaround package, such excess staff needs to be removed so that the excess wage payment will be avoided. For removing such excess staff, companies can introduce Voluntary Retirement Scheme (VRS) also called Golden Handshake. In recent years, many banks and private/ public sector enterprises have introduced such schemes, which got mixed response from the employees.
VRS is a type of separation possible in both public and private sector enterprises. Under VRS, a company introduces attractive retirement scheme for its employees. Employees are given wide an attractive compensation package. Employees who opt for VRS are given huge sums as compensation. The workforce is also trimmed. Generally, under VRS schemes offered by many organizations, employees have to complete a fixed number of years as service and then they can put resignation to opt for VRS scheme. Where as in other companies, sometimes employees are forced to apply for VRS scheme.
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