WORKFORCE REDUCTIONS AND TERMINATION BENEFITS IN GOVERNMENTS - THE CASE OF ADVANCE NOTICE

The prospect of layoffs and ongoing downsizing in governments due to b udget cuts has generated growing concern about termination benefits fo r public employees, such as severance pay, transition assistance, and advance notice. This study analyzes the organizational reasons why gov ernments should provide such benefits. The study also uses advance not ice as an example, and the CPS-Displaced Worker Survey to assess wheth er such a benefit lessens the economic loss of layoffs for affected em ployees. The findings show that termination benefits are integral part s of organizational commitment to preserve a long-term relationship be tween the organization and its employees, and serve the purpose of mai ntaining and reinforcing the organizational commitment and productivit y of employees, especially those who survived. The findings from the c ase study show that advance notice provides terminated employees an ea rly start in their job search and therefore helps lessen their economi c loss resulting from layoffs. The study also discusses the implicatio ns of mandating governments to provide termination benefits as a strat egy for managing workforce reductions.