The Hindu Business Line : Alternatives to severance

The time has come for bringing in three-day week to overcome the crisis and to ease the unemployment problem. In the proposed system, half the working population will work from Monday to Wednesday and the other half from Thursday to Saturday, leaving Sunday as the common holiday.

So, instead of dismissing, say, a hundred people, one can offer three-day week work to 200 people.

Today people work for six days and even seven days and earn a lot but do not know what to do with the money. On the other hand, there are a large number of people unemployed or getting retrenched. A three-day week, which may seem absurd, will bring happiness to a lot of people. - V.S. Venkatavaradan, email*

Before embarking on severance, it may be worthwhile for companies to resort to separation for an interim period. Companies can reduce the working days, minimum bonus payable by the management can be voluntarily deferred, permanent staff can be sent on annual leave in batches, senior and middle level executives can forego 20 per cent of salary on their basic, or perks can be scaled down.

All companies cannot adopt such practices but brainstorming between executives and workers is a more civilised form of arriving at various options. A negligible percentage of staff is bound to be hurt by the decisions. But one cannot have the cake and eat it too. - Ashok Jayaram, email

Recession is not a permanent feature and so alternative measures should be considered.

One of them is making employees agreeable to a wage freeze or a cut for some months with a reimbursement clause during profitable times, non-monetary benefits can be extended during such periods. A sabbatical package to employees with attractive terms will also be welcome. - V. Narayanan, email

The best possible solution will be reduction of salaries across the hierarchy. Some pay is always better than no pay. This will keep the morale of employees up. Also, other cost-cutting possibilities should be explored to help the company survive. - Jim Kim, email

The bank's advertising tag line is `The Citi Never Sleeps', but it appears that this time it has been caught napping. However, severance alone is not going to help. The other alternatives include rationalising manpower and removing the dead wood, shedding underperforming portfolios and compulsory pay cuts till the situation improves, implementing cost reduction programmes, among others. - J. S. Broca, email

The US Government is extending a liberal financial bailout to Citigroup and this step could save the group. So it is prudent to wait for some time. Moreover, accepting severance without an alternative in view would be unwise. - T.R. Anandan, email

Severance is not the only solution to tackle the economic crisis. The present crisis can be overcome by cutting salaries, reducing the percentage of perks and other benefits, curbing unnecessary transactions and expenses and by reducing the costs of products and services so that sales will increases. - V.S.C. Kapil, email

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