Employee redundancy takes place when an employee is unable to contribute to the company or the company is unable to retain the employee due to performance constraints or liquidation. In such a case the performance of the employee is fairly good but the company is unable to retain the employee. Redundancy cases like that of Karen’s termination require often see employees being provided with future career counseling, and alternative leads on job prospects that can suit them at other companies by the current employer only in order to reduce the impact of the termination for the employee.
Employee termination and turnover can have costs of their own in the form of loss of competent human resource from the company, loss of potential customers due to the employee turnover, costs associated with employee termination settlements, and those that become active when the employee seeks employment with a competitor (Tziner and Birati, 1996). Where the terminated employees who have considerable experience in the field , like that of Karen join competing companies, the ex-employing companies are threatened by the confidential information, management style and future business strategies that might be share by the terminated employee with the competitor. As a result protectionist strategies have to be implemented in order to prevent such loss of confidential information.