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voluntary severance package

Contributor(s): Ivy Wigmore

A voluntary severance package is a financial incentive that’s offered to an employee in hopes that he will resign or retire. Unlike most severance packages, a voluntary severance package gives the employee the option to decline the offer.

 Generally, voluntary severance packages are offered at a time that will benefit the company by reducing the workforce and cost of salaries and benefits. High-earning long-term employees who are close to retirement age may be offered early retirement packages, for example, in the hopes of forestalling layoffs.  Because a voluntary severance package benefits both the employer and the employee who accepts the package, it is sometimes referred to as a "golden handshake." 

The golden handshake is closely related to the golden parachute, which is a severance agreement that provides an executive with a substantial package upon termination, usually in advance of some event that might have a less favorable outcome for the executive, such as an acquisition, a merger or a breaking scandal.  

Golden handcuffs refer to a different type of agreement, in which employees are effectively shackled by financial incentives designed to motivate them to stay with a company longer than they might otherwise do. 

This was last updated in November 2014

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How can certain individuals be denied a VSP yet others in similar positions are awarded the package. What rights does an individual have to fight the refusal of a VSP.
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If I don't want to take severance pay,but if I get made reduant an get the full redundancy package which is capped how much will I lose
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To day received a letter about company offering voluntary severance ,as this is has been put indirectly,as have never been discussed to me at any time what rights do I have,,
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I`m requested by my manager to draft the VSP letter for the employee whom is 50 years of age and not producing the expectations according to his experience and qualifications, what will be your advise?  
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