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Severance Pay Definition and Explanation PDF Download

Learn Severance Pay definition in hrm with explanation to study “What is Severance Pay”. Study severance pay explanation with HRM terms to review HRM course for online MBA programs.

Severance Pay Definition:

  • Security benefit voluntarily offered by employers to individuals whose jobs are eliminated or who leave by mutual agreement with their employers.

    Human Resource Management by Robert L. Mathis, John H. Jackson



Severance Pay Explanation:

Severance pay is the pay and additionally benefits a business gives to a representative after work is finished. Severance bundles may incorporate expanded advantages, for example, medical coverage and outplacement help to enable a worker to verify another position. Managers offer bundles to workers who are laid off, whose occupations are disposed of in view of scaling back, or who resign. A few workers who leave or are terminated may likewise get a severance bundle. Organizations are not required to pay severance, albeit most offer bundles on a case-by-case premise and as managed by business contracts. Severance pay is offered to workers in specific conditions after their business closes. The sum a representative gets relies upon to what extent the person in question was with the business. Most businesses have arrangements in their worker handbook that blueprint how they handle severance pay.

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