MGT340 Topic 7 Disciplinary Systems & Termination Services PDF

MGT340 TOPIC 7 DISCIPLINARY SYSTEMS AND TERMINATION OF SERVICE  LEARNING OUTCOMES By the end of this topic, students should be able to: Understand the types of discipline (positive, progressive, and negative discipline) Identify and evaluate penalties in disciplinary systems...

MGT340 TOPIC 7 DISCIPLINARY SYSTEMS AND TERMINATION OF SERVICE  LEARNING OUTCOMES By the end of this topic, students should be able to: Understand the types of discipline (positive, progressive, and negative discipline) Identify and evaluate penalties in disciplinary systems Identify common employee problems and develop strategies to deal with employee problems Describe different types of employee termination (resignation, expiry of fixed-term contracts, retirement, redundancy, and retrenchment).  7.1 Types of Discipline Positive, Progressive, Negative discipline 7.2 Penalties in a Disciplinary System 7.3 Dealing with employee's CHAPTE problems Transfer of employees (costs of transfers) R Promotion of employees (formal/informal promotion; criteria for promotion) Methods for handling employee grievances (grievance OUTLINE procedure; effects of grievances; causes of grievances) Absenteeism of employees (lateness, penalties for absence) 7.4 Types of termination Resignation Expiry of fixed-term contract Retirement Redundancy and Retrenchment  DEFINITION Discipline a person’s state of self control and orderly conduct. Industrial Discipline the rules in an industrial establishment for the maintenance of control and order in an organization. Misconduct any improper behaviour that violates the rules of an organization. Minor misconduct an offence which is not serious enough to take serious disciplinary action. Eg: Employee who came late for a day. Major misconduct a big and serious mistake like forgery signature. If minor misconduct repeatedly often, then it become MAJOR misconduct.  Positive discipline a method in which the positive aspects about the employee’s actions (rather than the negative behaviours) are highlighted. It seeks to explain to the employee what positive actions the employer is looking for, opting to focus on the wanted behaviours and outcomes instead of the problems. The idea is to provide motivation for employees to improve. It involves creation of an atmosphere in the organisation through rewards, appreciation, incentive payment, promotion, 7.1 TYPES constructive support etc. to motivate employees to work willingly to accomplish the set goals. Progressive discipline OF Involve the process of using increasingly severe steps or DISCIPLINE measures when an employee fails to correct a problem after being given a reasonable opportunity to do so. The underlying principle of sound progressive discipline is to use the least severe action that is necessary to correct the undesirable situation. Typical progressive discipline steps involve counselling, written warning, suspension without pay and termination. Negative discipline It is also called ‘enforced discipline’. In case of negative discipline, employees are forced to obey orders and abide by rules and regulations that have been laid down, failing which penalties and punishment would be imposed on them. The objective of using punitive or coercive discipline is to ensure that employees do not violate rules and regulations formed by the organisation and at the same time to scare other employees to ensure that they do not indulge in  7.2 PENALTIES IN A DISCIPLINARY SYSTEM A disciplinary system must be fair and just. In a fair disciplinary system, employees know the rules and know what they can do and what they cannot do. When employees behave in an unacceptable manner, they are punished. The purpose of punishment is to change the employee’s behaviour and to send a warning to other employees that unacceptable behaviour will not be tolerated.  7.2 When employees commit misconduct, they may be penalized. Penalties that PENALTIE may be imposed include: S IN A DISCIPLIN ARY SYSTEM Demotion Suspensio Oral Written or n without Dismissal warning warning(s) downgradin pay g  7.3 DEALING WITH EMPLOYEES PROBLEMS  7.3.1. Transfer Transfer is a lateral move of an employee from one job to another, or from one department to another, or from one site to another. To fill vacancies for experienced workers Employers transfer To solve people problems employees: To provide training to employees For personal, non-work-related Employees may reasons To have an opportunity to learn request transfers: To overcome boredom  7.3.1. Transfer Transfer is a managerial privilege by the management. Employers have the right to transfer an employee, but the right is subject to: Any express clause in the contract of employment. The reason for the transfer must be a legitimate business reason. The reason for the transfer must not be for the purpose of harassing or victimizing the employee. The transfer must not be to the detriment of the employee’s terms and conditions of employment. Cost of Transfers Financial Costs When employee been transferred by the employer, usually the company need to pay for the cost of transfer to the employee and his family including; transportation cost, lodging or hotel allowance and some time off to allow the employee and his/her family to settle themselves into the new place. Psychological costs Employees who are having attachment with the organisation and their morale maybe disturbed due to transfer to some other location. Family members of employee who got transferred maybe psychologically disturbed because they have to shift their entire family to new location for which it may take time to get accustomed to new place. Besides, employee transfer may lead to resignation for the reason he may not willing to leave current location. To reduce workers problems associated with being transferred, company may opt to provide relocation service through consultant/agency that help to sell the employee’s house and at the  7.3.2. Promotion of Employees Promotion is reassignment of an employee to a job at a higher level in the organization. Formal promotion opportunities motivate employees, providing the promotion system is perceived as being fair and transparent. Formal promotion: similar to internal recruitment Informal promotion: The decision-making process relating to promotion is kept secret. An effective performance appraisal system is required to identify which employees are suitable for promotion. Criteria for promotion includes seniority & merit.  One of the popular methods followed for giving promotion to the Promoti employee. Seniority is based on the total length of service and is on by counted from the date of employee appointment in the seniorit organisation. However, merits such Criteria as qualifications, knowledge, y skills, performance, etc., are not given weightage as promotion is for based on seniority. promotion Promotions are based on merits of the employees, i.e., qualifications, Promoti knowledge, skills, honesty, initiative, interpersonal on by relationship, effective communication and performance merit in the job. Seniority is not given weightage.  7.3.3. GRIEVANCE HANDLING What is What are the What are the grievance in effects of causes of context with unresolved grievances? human grievances resource? Grievance Broken promises procedure is a Unfair pay and formal process for benefits hearing and Personal and resolving sexual employees’ harassment complaints. Dangerous or uncomfortable working conditions Unjust disciplinary action by the GRIEVANCE PROCEDURES Managers must be trained how to handle grievances. A grievance A deadlines procedure is a will be Listening Grievances skills formal established should be process for for each Understandin settled at hearing and stage at g of rights of the lowest resolving which a employees level possible. employees’ grievance is and complaints. heard. employers Counselling skills Problem- solving skills STEPS OF GRIEVANCE HANDLING PROCEDURE Workers raises grievance with immediate supervisor (within 5 working days of the problem arising) If supervisor does not settle the grievance to the satisfaction of the worker within 5 days, refer to Head of Department If Head of Department does not resolve the grievance within 5 days, the matter may refer to CEO If the CEO fails to settle the matter within 5 days, it may be referred to the Department of Industrial Relation for conciliation. (This last step will only occur in a unionized environment) 7.3.4. DEALING WITH ABSENTEEISM Absenteeism includes not being at work when expected, arriving late, taking extended breaks, or being away from the workstation without permission. Workers who are regularly absent from work without permission granted in advance cause problems. Employers must have systems in place to reduce unauthorized absences. Keep records Have clear procedures Take disciplinary action, when necessary Employers may encourage full attendance by offering incentives. PENALTIES FOR ABSENCE Employees may be punished for absence. Employees within the scope of the Employment Act & Sabah/Sarawak Labour Ordinances: Absence without leave for more than 2 consecutive days is a breach of contract for which the employee may be dismissed. Prior to any dismissal, proper procedures must be followed. However, all employees in the private sector have the right to challenge the termination of their contract of employment THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT  All employees in the private sector have the right to challenge the termination of their contract of employment by taking the File request following Attend a steps: for conciliatio As a result of conciliation: reinstateme n meeting nt at the with the ex- The employer may agree to reinstate the nearest employer, employee, or called by The employee may agree to withdraw their Department of Industrial the claim, or Departmen The employer and employee may agree on a Relations t of IR. compensation package to settle the claim, (IR). or The employer and employee may not reach any Where no agreement is reached, the agreement. The Industrial Court will decide Director General of If the dispute whether the employee was dismissed Industrial Relations is referred to with or without just cause or will inform the Industrial excuse. If the dismissal was without Minister of Human Court, an just cause or excuse, the Court will Resources who will arbitration either: decide whether or not hearing will Order the employer to reinstate to refer the dispute to be held. the employee OR the Industrial Court. Order the employer to pay Compensation formula for dismissal without just cause or excuse “just cause and excuse” means that the employer must have proper justification and reasons to terminate the employee. The Industrial Court has the power to decide on how much compensation should be paid to the employee by the employer for dismissal without just cause or excuse. Typically, the formula followed is: Grant back wages from the date of dismissal up to the date of the Court decision, and One month’s wages for every year of the employee’s service. 7.4 Types of Termination  RESIGNATION EXPIRY OF FIXED-TERM TYPES OF CONTRACTS TERMINATI ON RETIREMENT REDUNDANCY AND RETRENCHMENT  1) RESIGNATION i. Employees have the right to voluntarily terminate his service for no reason. Some of the reason can be: Emigrating Starting own business Join another organization Returning to studies Staying home to look after dependents ii. Prior to resigning, an employee must give notice to the employer as required by his contract of employment. 2) EXPIRY OF FIXED-TERM CONTRACTS i. Fixed-term contracts expire at the end of the agreed time period. ii. Fixed-term contracts are acceptable to the Industrial Court if they are for genuine business reasons. iii. An employee on fixed-term contract may file a claim under the Industrial Relations Act if his contract is not renewed. iv. The Industrial Court will not interfere with an employer’s decision not to renew a fixed-term contract if the employer has an acceptable reason for the decision.  The minimum retirement age act 2012 prohibits an employer from establishing a retirement age less 3) than 60 years. If the employer wish to retain the RETIREMEN employee, he may offer him T further employment. Employers can assist employees to survive the retirement period by providing EPF.  4) REDUNDANCY AND RETRENCHMENT i. Redundancy occurs when an employer has excess employees. ii. Redundancy may be caused by: Mergers and acquisitions Restructuring Financial problems Changes in technology iii. Redundant employees may be retrenched. iv. Because of the negative consequences to employees and society of retrenchment, employers are expected to avoid retrenching employees if possible. To avoid retrenchment, employers could: Freeze external recruitment and redeploy employees into any vacancies which arise. Conduct a voluntary separation scheme (VSS). Reduce costs. Reduce wages if employees agree.