Optional early retirement as an alternative to involuntary layoffs: some observations on the Israeli experience.

Abstract

The use of optional early retirement (OER) in Israel is discussed in the context of the tendency to consider forms of voluntary work-force reductions as an alternative to dismissals and layoffs during organizational retrenchment. The pros and cons of OER are assessed from both the organizational and the individual points of view. Although much more palatable than involuntary dismissals, attention is called to the hidden costs of OER in terms of organizational effectiveness, the stigmatizing use of age as a selection criterion, and the unintended effects on individual well-being.