A Survey of the Criteria Used by Commercial Banks in Kenya to Determine Employees to Retrench

Abstract

The survey for the study was carried out between August and September 2004. The study sought to establish the criteria used by commercial banks in Kenya to determine employees to retrench. The respondents were the Human Resource Managers of all the commercial banks in Kenya. The information was collected using a structured and uniform questionnaire. 20 Human Resource Managers completed the questionnaire. The findings of the study suggest that commercial banks use seniority (Last-In-First-Out), employees' individual productivity, misconduct, incapability, early retirement programs, First-In-First-Out (FIFO) and employee obsolescence as criteria for determining employees to retrench. The criterion that is most popularly used is assessment of employees' individual productivity. Misconduct as a criterion for retrenchment is also popular and some of the behaviors that banks consider as misconduct include fraud, insubordination, regular unauthorized absenteeism, financial mismanagement, leaking out confidential information among others. Early retirement programs are also used to a moderate extent. Last in-First out (LIFO) is used to a moderate extent while incapability as a criterion is used to a less extent. It was also found that all banks use the same criteria despite their age, ownership and size. The study further suggests that a similar study be undertaken in another industry to check whether there is similarity in the criteria used in determining employees to retrench across the board.