What are the implications of a reduction strategy for an organization?

Answers will vary. Sometimes, an organization may find itself facing reductions. Perhaps an organization is experiencing cutbacks. Sometimes, these reductions can be handled through normal attrition processes. A popular alternative to terminations and layoffs, especially for managers, is early retirement. The idea is to make offers to employees to enhance their retirement benefits so that people might consider retiring at an earlier age than they would have done otherwise. Of course, this process involves costs to the organization. The organization may be forced to pay additional benefits to those employees above and beyond what they would have ordinarily expected to pay. It is also possible that the organization might lose people that it would have preferred to keep; that is, its highest-performing employees may be those who opt for early retirement. In fact, they may see early retirement as an opportunity for increasing their income by taking retirement benefits from their current employer but using their high-performance credentials to gain new employment with another organization. On the other hand, lower-performing employees are less likely to have this option and thus may be more likely to remain with the current organization.