Abstract:
This study entitled the retrenchment in Rwanda commercial banks. A case study of BPR and
I&M. Comparative data have been used.
The companies that were study included all those that are commercial banks and specifically
BPR and I&M bank. The objective of the study was; to examine the criteria used by BPR and
I&M bank in employees retrenchment; to evaluate employees perception on retrenchment
criteria used by BPR and I&M Bank; to examine the impact of retrenchment on individual and
organizational performance and to establish the best ways of carrying out retrenchments in future
without adversely affecting the remaining employees in both BPR and I&M Bank.
The research design was quantitative and entirely used secondary data and qualitative including
interviews from different staffs. These criteria therefore included BPR and I&M bank only. Data
gathered was from 2011to 2016 analyzed using Excel and SPPS to measure the criteria used by
Rwanda commercial bank in employees retrenchment.
The findings of the study suggest that commercial banks use seniority, employees‟ individual
productivity, misconduct, incapability, early retirement programs and employee obsolescence as
criteria for determining employees to retrench. The criterion that is most popularly used is
assessment of employees‟ individual productivity. Misconduct as a criterion for retrenchment is
also popular and some of the behaviors that banks consider as misconduct include fraud,
insubordination, regular unauthorized absenteeism, financial mismanagement, leaking out
confidential information among others. Early retirement programs are also used to a moderate
extent. Last in-First out (LIFO) is used to a moderate extent while incapability as a criterion is
used to a less extent. It was also found that all banks use the same criteria despite their age,
ownership and size.
