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. Long-term employee who are close to retirement age and earn high salaries 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."