What are the differences between Voluntary Separation Scheme and Voluntary Retirement Scheme?
Voluntary Retirement Scheme (VRS) and Voluntary Separation Scheme (VSS) are aimed at reducing the manpower in an organisation by alluring an employee with compensation based on the number of years of service put in and the number of years of service left.
All regular employees having rendered minimum 10 years of continuous service and below 55 years of age are only eligible for availing of the facilities of VRS. For implementing VRS, the organisation has to get the approval from the Labour Department and if there is a Labour Union in the organization, they must approve of the scheme too.
Issue with VRS is that it is not applicable to work-charged and Nominal Muster Roll employees although they may have been engaged continuously for long periods. With these restrictions, however, the problem of separation of employees of the sick and unviable organisation cannot be effectively addressed. Many of the employees of such organisation cannot be offered VRS because of their age factor, period of service rendered in work-charged/ NMR establishment or because of non-regular nature of their appointment. So to resolve this problem Voluntary Separation Scheme (VSS) came into existence.
Both schemes are essentially an offer of "golden handshake" to reduce the headcount in organisation. However, on the negative side of it, good, employable employees leave thus leaving the organisation with deadwoods.