What is Voluntary Termination
Voluntary termination may refer to a variety of actions, most commonly an employee's decision to leave a job on their own accord. It may also refer to the voluntary cancellation of personal financial contracts, such as car leases or cell phone contracts, or the voluntary cancellation of institutional level contracts such as credit default swaps and interest rate swaps.
Breaking Down Voluntary Termination
An employee may choose to leave a job for a wide variety of reasons. For example, a change in personal circumstances such as family demands, a choice to go back to school, dissatisfaction with working conditions such as a hostile supervisor, lack of recognition of work performance, and lack of autonomy, challenge or work relationships, and so on. An especially common reason for voluntary termination is leaving for a new and better job, typically one that offers higher remuneration or improved career prospects. This is more likely to be cited as a reason for leaving a job during periods of strong economic growth and labor market demand than during recessionary times. Overall, conventional wisdom suggests that workers do not leave jobs as much as they leave their supervisor over conflicts in management style, lack of respect, or poor communication over goals, objectives and practices.
Voluntary Termination Procedures
A voluntary termination by an employee will generally start with either a verbal or written notification of resignation to their supervisor, though there may also be a job abandonment, when a worker fails to show up for work for three consecutive days without notifying a supervisor.
Employees who choose to leave a job are generally expected to provide at least two weeks of notice before their final day at work. When submitting their resignation notice an employee can expect their supervisor to immediately forward it to human resources along with their intended end date and reason for leaving. Once human resources is involved, the employee can expect to be asked to return company property, to finalize and submit final expense reports, have their post-termination benefits summarized for them and be asked to schedule an exit interview. Supervisors may be asked to complete a Supervisory Termination Summary, a form that is submitted to human resources. For more, see Procedures for Voluntary and Involuntary Terminations from the Society for Human Resource Management.
Voluntary Termination: Other Types
Voluntary cancellation of financial contracts may or may not incur penalties. In case a penalty will be incurred, the party who wishes to terminate the contract may be able to rationalize the termination decision if the net benefit from terminating the contract is substantially larger than the penalty.