Observations

Staff severance or separation may be at the initiative of the employee (e.g. voluntary

129

retirement or resignation). It may be due to some uncontrollable circumstances such as ill health, mandatory age provision and the economy of the business. Staff exit may take the form of resignation, retirement, dismissal, retrenchment discharge, termination, rationalization and purges.

3.3.1 Resignation

Resignation is a voluntary withdrawal of service from the organization by the employee due to or either the desire for a better job or dissatisfaction with the present employment conditions.

3.3.2 Meaning and Nature of Retirement

Retirement refers to a time when employee leaves their jobs and stops working at the end of their career or service life. Retirement may be requested for by the employee when due (voluntary retirement and it could be imitated by the organization before the retirement age of the employee (involuntary retirement)

As an essential element of merit system of open personnel administration, a system of superannuating is provided for employees who served a permanent tenure of appointment pension scheme is the most important employee benefit provided by an organization in addition to basic salary or pay monthly after retirement.

3.3.2.1 Objectives of a good Retirement System

Retirement is a personnel severance strategy designed to stabilize the

organization’s manpower system by relieving those old employees whose performance has fallen due to old age and replace them with a more competent, energetic workforce.

White, (1963) says that “retirement system for civil employees primarily designed to facilitate the termination of employment of men and women whose powers have failed on account of

130

old age or disability by granting allowance for past services, to provide benefits to dependents in case of death and to improve the morale of the service by creating a sense of economic security from the point of view of the employees. The retirement system helps to compensate for modest scale of pay, relieves anxiety for the future and furnishes a convenient means of regular saving.

White, while has indeed outlined the basic rationale for retirement system in an efficient personnel system. Tyagi further summarized the objectives and benefits of efficient retirement system in organizations as follows:

(i) It aim at increasing the efficiency of organizations by eliminating those employee from service who due to old age, or bodily or mental infirmity are unable to perform their duties adequately;

(ii) Retirement of older employees from highest positions is also essential for maintaining the system of promotion;

(iii) By retiring older employees, rooms are created for young and capable persons in public service. Retirement system thus helps to inject new blood and fresh ideas in organization;

(iv) A system of pensions on retirement keeps employee satisfied and contended and thus helps in retention of experienced and capable persons in service. As the employees are assured of an efficient pensions after retirement, corruption and bribery while in service are supposed to be checked;

(v) A system of pensions helps to attract talented persons to work in an organization by providing a life insurance even after service. Thus, it help the organization to secure the most competent skilled manpower from labour market of an economy

131 3.3.3 Main Features of a good retirement system

Although countries may have different retirement systems, there are certain features, which are common to all systems.

(i) All countries have fixed compulsory retirement age. In Nigerian, 60 years is the fixed age while 35 years is the fixed number of service year at which civil servant must retire. The retirement age of judges is 70 years old. Thus, a civil servant in Nigeria should retire at the age of sixty whether they have reached thirty-five years in service or not, or whether they are still capable of efficient service or not;

(ii) Retirement can be voluntary at compulsory age or compulsory before the retirement age;

(iii) In all countries, retirement system provides for pensions for retirees and the pensions are not based on contributory principles, as gratuities and other remunerations after retirement are.

Government pays the pension wholly and they cannot be claimed as right and they can be withheld at any time by the government when it feels that the pensioner is engaged in any subversive activity against the state.

The following are condition for qualification for pension:

(1) The pension claimant must have been one who was appointed in accordance with rules governing admission in to the service in which he belongs;

(2) The claimant must have been a whole-time employee of the state;

(3) He should have drawn the emoluments on which he is pensionable from the public funds exclusively;

(4) He/she have served for upward of a minimum number of years, usually 10 years;

(5) He should be certified to have served with diligence and fidelity to the satisfaction of the

132

head of the service or department under which he worked;

(6) He has attained the age of superannuating or if he is under the age of superannuating, he has been certified to be permanently incapacitated from infirmity of mind or body from discharging his official duties or has been removed from office on its cessation; Beside pensions, retiree may enjoy other financial benefits like insurance and provident which are usually partly or wholly contributory. Unlike pensions, these benefits are usually paid in Lump sum on retirement not monthly like pensions.