Compensation and benefits provided to employees upon termination due to layoffs, downsizing, or organizational restructuring.
HR departments design severance packages to include financial payouts, extended health benefits, and outplacement services. Well-structured severance policies help maintain employer reputation and employee goodwill.
A severance package means the company is offering you financial compensation and other benefits after your employment ends due to redundancy, layoffs, or a mutual agreement. It’s a way to ease your financial transition while you look for another opportunity.
Severance pay is typically calculated based on your length of service and salary. A common formula might be:
Usually, you do not get severance pay if you are fired for misconduct or poor performance. Severance is typically reserved for cases of redundancy, layoffs, or when employment is terminated through no fault of the employee. However, in some cases, companies may negotiate a severance package as part of a separation agreement — even if it's a termination — depending on the circumstances.
Strategic HR Management (SHRM)
An advanced HR approach that aligns human resources policies with long-term business objectives.
SHRM involves workforce planning, leadership development, and data-driven decision-making. HR professionals use SHRM to enhance company performance and gain a competitive advantage.
HR’s role in strategic management involves:
The aims of Strategic Human Resource Management (SHRM) are to:
Ensure equitable treatment and fairness in employment practices