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This reminds me of the experiences of GE under Jack Welch, with his "rank-and-yank" initiative: 10 percent, each year, gets fired. It relies on the faulty assum

This reminds me of the experiences of GE under Jack Welch, with his "rank-and-yank" initiative: 10 percent, each year, gets fired. It relies on the faulty assumption that the percentage of good vs. bad employees is constant. First year, you can fire 10% without much complaint, because most of the people you're getting rid of are deadwood. Second year, it's a bit harder. Third year, the obvious deadwood is gone and nobody wants to lay off 10% of their workers. This is when people start getting pissed off. The enforced rank distribution is just there to make it easier to fire people. They're afraid of termination lawsuits that might occur if someone gets fired with a trail of 4s and 5s.

j_baker 17y ago
Not coincidentally, Enron also used this model. I think that this is the worst idea possible. It encourages employees to compete with one another rather than working as a team.
- pw0ncakes 17y ago
  Enron is an energy company that decided it wanted to be a Wall Street firm-- a trader rather than a maker. The problem is that it didn't have the cultural "memory" that most banks have-- that prevents them from doing outrageously stupid and illegal things (that people in the banks would also love to do if they were profitable, but history has shown to be bad ideas). So Enron became an outlandish caricature of Wall Street.
Hoff 17y ago
Gigantic-scale businesses are different than startups, and with different problems and different avenues and different dynamics. As troubling as I find management built on an up-or-out career treadmill and deliberately roiling the employees and the bungee-bosses and the management schools, these are a counterintuitive and cut-throat and effective way to keep the management and the organizations from getting complacent. Commission sales folks are accustomed to the up-or-out model, too. This doesn't scale down to smaller businesses nor to startups, nor is it usually particularly necessary. And for all the reasons discussed elsewhere in replies elsewhere here. But the dynamics in bigger organizations are different than smaller ones. (And no, I never thought I'd be sort-of defending this approach, either.)

j_baker 17y ago

Not coincidentally, Enron also used this model. I think that this is the worst idea possible. It encourages employees to compete with one another rather than working as a team.

pw0ncakes 17y ago
Enron is an energy company that decided it wanted to be a Wall Street firm-- a trader rather than a maker. The problem is that it didn't have the cultural "memory" that most banks have-- that prevents them from doing outrageously stupid and illegal things (that people in the banks would also love to do if they were profitable, but history has shown to be bad ideas). So Enron became an outlandish caricature of Wall Street.

Hoff 17y ago

Gigantic-scale businesses are different than startups, and with different problems and different avenues and different dynamics. As troubling as I find management built on an up-or-out career treadmill and deliberately roiling the employees and the bungee-bosses and the management schools, these are a counterintuitive and cut-throat and effective way to keep the management and the organizations from getting complacent. Commission sales folks are accustomed to the up-or-out model, too. This doesn't scale down to smaller businesses nor to startups, nor is it usually particularly necessary. And for all the reasons discussed elsewhere in replies elsewhere here. But the dynamics in bigger organizations are different than smaller ones. (And no, I never thought I'd be sort-of defending this approach, either.)