Acceptance of buyout offers in the face of downsizing: empirical evidence from the Korean electronics industry

Daniel C. Feldman, Seongsu Kim
1998 International Journal of Human Resource Management  
Using a sample of 812 employees in a major Korean electronics company, this study examines the predictors of acceptance of buyout incentives. As in the retirement research, the results here suggest that employees are more likely to accept buyouts the larger the size of the incentive, the older they are at the time of the offer and the poorer their health. However, in contrast to early retirement research, the results here suggest that it is the better performers, those whose spouses are still
more » ... the workforce and those who have already declined previous incentives who are most likely to accept buyout incentives in early and mid-career. This study also highlights ve differences between American-based and Korean-based rms in their use of early buyout offers. Korean employees were more likely to accept buyout offers the higher their salary, while in the US salary and acceptance of such offers are typically inversely related. Also, while US rms focus on buyout incentives for older workers, Korean rms will often target workers in their thirties and forties. Korean rms typically offer one-time, lump-sum bonuses as departure incentives, whereas American rms are more likely to add years of age and/or service in calculating pension bene ts. While US rms often offer some type of part-time employment contract to their early retirees, Korean rms often prohibit this arrangement. Finally, compared to the US, the greater stigma associated with inter rm mobility in Korea cuts against the acceptances of these offers.
doi:10.1080/095851998340720 fatcat:bau3yrkn7fhbbbmqtfvccsf4e4