Difference Between VSS And VRS

Hello all! :)
Recently I was asked this question in an interview and I would like to know the answer.
Q. What is Voluntary Separation Scheme? What are the differences between Voluntary Separation Scheme and Voluntary Retirement Scheme?
Thanks
Sumit

hi sumit,
vss is a scheme where employees are allowed to resign voluntarily from the company by receiving fair compation. the purpose of implimenting vss is to cut down the number of workers the employees will be given a reasonable compation for resigning from the co. it is because firing emps lead to a bad reputaion for the co.
with regards
rajesh chauhan

VRS is a scheme which encourages emplloyees who r close to retirement age to take retirement voluntarily without any other force. It is done in order to get new blood in the organization.
But I have not much knowledge about VSS ,Please shed some light on the concept.

Hi Sumit,

Essentially both VSS (Voluntary Separation Scheme) and VRS (Voluntary Retirement Scheme) are aimed at reducing the manpower in an organisation by tempting an employee with compensation based on the number of years of service put in and the number of years of service left. While VSS is normally applied to all irrespective of the length of service, VRS is generally offered to those who have completed a minimum length of service. Also, 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. It is also a good opportunity for productive employees who feel they are stagnating in the organization due to unfavourable promotion policies to get compensated for their stint in the organisation and try their luck elsewhere. Both schemes are essentially an offer of "golden handshake" to reduce the manpower strength in organisations. However, on the negative side of it, only good, employable elsewhere employees leave thus leaving the organisation with deadwoods!!

Hope the explanation gives you some idea.

Regards

Krishnan

Krishnan is right, VSS is irrespective of length of service while VRS is only near retirement after completing the stipulated length of service.
Saurabh

Dear Mr.Krishnan
Thanks for clarity for VSS & VRS
both are seems to be one but the meaning is different
But for imposing VRS we need not require labour department permission though we are going to downsize the manpower in view of organisation requirement.
Before implementing the scheme it is better to consult the union/s for better understanding.
Anyway the scheme is optional and it is purely voluntary retirement scheme (VRS) but not Compulsory Retirement Scheme (CRS)
We have to consider the applications of merits and demerits also before finalisation.
Hope the above is in order
Tks & Regards
Vadlamani SR

Voluntary Retirement Scheme (VRS) is for rightsizing workfoce. 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. It 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 enterprises cannot be effectively addressed. Many of the employees of such enterprises 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.

As has been pointed above, VRS is for downsizing (viewed by the Unions) and rightsizing (argued by the Management) of workforce. However, for announcing any voluntary retirement scheme, the company has to follow certain procedures including getting approval from the Labour Commissioner. Also, the company should be able to prove that they have excess work force and that they do not plan to replace expensive workmen by cheap labour after the VRS. The minimum compensation to be paid is also laid down by the government whereas the maximum can be fixed by the Management in consultation with the Union to attract employees to opt for VRS. The Management has the right to accept or reject the application received from any employee, though in practise, most companies do not reject application received opting for VRS from any one.

Whether it is VRS or VSS, both are supposed to be voluntary in nature and any scheme offered for reducing the workforce coming under the bargainable category, has to be approved by the Labour Commissioner. However, companies tagetting specific employees do it quietly by offering compensation to targetted employees and asking them to resign or make them request for giving some compensation. The rules may differ from state to state marginally though.

Thanks for everyone who have responded with their comments as it is always good learning.

My view is:
There are employees who are temporary or tenure based. So they are not expected to work till the age of retirement. Hence, they can not retire voluntarily. VSS is for them.
But when, an employee is expected to work till the retirement age, VRS is offered.
The essential difference is this. Since, VSS can be offered to both the categoris of employees, these days VSS is in use instead of VRS. Besides, separation sounds better than retirement. We normally to think that retirement is end of working life which is no more true. Why use the term retirement then?

i have a question
if company force to resign employee due to downsizing of work, what employee can do.
and company is give two month notice to resign from company..