7 ms·

IIRC Welch came up with rank-and-yank because he needed to lay people off and decided he wanted to be "fair" about it and not lay off his best performers. And

IIRC Welch came up with rank-and-yank because he needed to lay people off and decided he wanted to be "fair" about it and not lay off his best performers. And somehow that got cargo-culted into "we should continuously get rid of the bottom X% of people all the time".

asveikau 7y ago
Well, at some point in American business culture it does seem like a number of people did lose sight and become convinced that the only way to deliver shareholder value is to lay off continuously.
- neves 7y ago
  It looks like this became the basis of American economy. And you can't loose your job, because you'll miss your mortgage or education payments and loose your health care. So you must do anything your employer tell you to do.
  - dnautics 7y ago
    I would say it's become the basis of worldwide modern central banking capitalism, gas and water socialist countries included.
    - random_savv 7y ago
      Can't tell if this is meant as sarcasm or truthfully :-)
  - WalterBright 7y ago
    > because you'll miss your mortgage or education payments and loose your health care. This is why the sensible thing to do is to save up a cushion of 6 months. You can continue with your employer health care with COBRA for 6 months or a year.
    - michaelgrafl 7y ago
      You‘re saying this as if it were realistic for the majority of people to save up a cushion of 6 months in a reasonable time frame (or ever).
      - kelnos 7y ago
        It's not easy, but I think a lot of the people who don't save, actually could. Part of the problem is people don't think they can save "enough to matter", so they never start. Even starting with just tossing $5 or $10 a month into savings account can help. It kickstarts the habit, at least, and often people can later justify raising that amount or putting in a little more here and there. For some other people, if they'd drop the "keeping up with the Joneses" mentality even just a little bit, they could develop significant savings. Yes, there are many people in the US who are just barely getting by, and can't meaningfully save without making cuts to essential spending, but that certainly doesn't describe everyone who currently lives paycheck-to-paycheck.
      - WalterBright 7y ago
        A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances. For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family. A friend of mine living in an apartment told me he was unable to pay his bills. I asked him what the payment was on his new car. I suggested he sell the car, and buy a car he could pay cash for. He surprised me by following my advice and was able to reduce his stress about his finances. My father, an officer in the AF, was once tasked with counseling the privates on their finances, as many were unable to pay their bills on the local economy. (The AF really tries to be a good citizen in the community where the base is located.) The privates were paid every two weeks. Half of them drank their paycheck away and ate steak for the first week, and begged/borrowed/stiffed others for money the second. They received the same paychecks, but half could not manage their finances. My father would counsel them, work up budgets for them, all for naught.
        7y ago
- markus_zhang 7y ago
  Actually cutting cost usually comes first to the mind of the investment bankers because: 1. Cutting cost will always yield a quick gain 2. It's a lot more difficult to turn it around and win in the long term 3. Even if the banker wants a long term picture, cutting cost is not necessarily a bad idea.
jonny_eh 7y ago
> And somehow that got cargo-culted into… his book maybe? He was still defending the practice in 2005: https://usatoday30.usatoday.com/educate/college/careers/Advice/advice4-18-05.htm https://usatoday30.usatoday.com/educate/college/careers/Advi...
- hnick 7y ago
  He seems to suggest not just getting rid of them, rather letting them know where they stand in the hope they move on or take it upon themselves to improve. > You've got a bad take on it. It's letting the bottom 10% know where they are and then giving them a chance to move on. About 70% (of the bottom 10%) leave on their own. Who wants to be on the bottom once they know it? You don't fire them. That's being mean. Though of course firing is always an option especially in the USA. From that article the key point I found was that he would rather expend company resources nurturing top performers instead of salvaging the bottom performers. He believes it's a much better investment.
AtlasBarfed 7y ago
Yeah, it should really only be a periodic thing every 10 years, but really that's what "reorgs" mean.

asveikau 7y ago

Well, at some point in American business culture it does seem like a number of people did lose sight and become convinced that the only way to deliver shareholder value is to lay off continuously.

neves 7y ago
It looks like this became the basis of American economy. And you can't loose your job, because you'll miss your mortgage or education payments and loose your health care. So you must do anything your employer tell you to do.
- dnautics 7y ago
  I would say it's become the basis of worldwide modern central banking capitalism, gas and water socialist countries included.
  - random_savv 7y ago
    Can't tell if this is meant as sarcasm or truthfully :-)
- WalterBright 7y ago
  > because you'll miss your mortgage or education payments and loose your health care. This is why the sensible thing to do is to save up a cushion of 6 months. You can continue with your employer health care with COBRA for 6 months or a year.
  - michaelgrafl 7y ago
    You‘re saying this as if it were realistic for the majority of people to save up a cushion of 6 months in a reasonable time frame (or ever).
    - kelnos 7y ago
      It's not easy, but I think a lot of the people who don't save, actually could. Part of the problem is people don't think they can save "enough to matter", so they never start. Even starting with just tossing $5 or $10 a month into savings account can help. It kickstarts the habit, at least, and often people can later justify raising that amount or putting in a little more here and there. For some other people, if they'd drop the "keeping up with the Joneses" mentality even just a little bit, they could develop significant savings. Yes, there are many people in the US who are just barely getting by, and can't meaningfully save without making cuts to essential spending, but that certainly doesn't describe everyone who currently lives paycheck-to-paycheck.
    - WalterBright 7y ago
      A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances. For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family. A friend of mine living in an apartment told me he was unable to pay his bills. I asked him what the payment was on his new car. I suggested he sell the car, and buy a car he could pay cash for. He surprised me by following my advice and was able to reduce his stress about his finances. My father, an officer in the AF, was once tasked with counseling the privates on their finances, as many were unable to pay their bills on the local economy. (The AF really tries to be a good citizen in the community where the base is located.) The privates were paid every two weeks. Half of them drank their paycheck away and ate steak for the first week, and begged/borrowed/stiffed others for money the second. They received the same paychecks, but half could not manage their finances. My father would counsel them, work up budgets for them, all for naught.
      - 7y ago
markus_zhang 7y ago
Actually cutting cost usually comes first to the mind of the investment bankers because: 1. Cutting cost will always yield a quick gain 2. It's a lot more difficult to turn it around and win in the long term 3. Even if the banker wants a long term picture, cutting cost is not necessarily a bad idea.

jonny_eh 7y ago

> And somehow that got cargo-culted into… his book maybe? He was still defending the practice in 2005: https://usatoday30.usatoday.com/educate/college/careers/Advice/advice4-18-05.htm https://usatoday30.usatoday.com/educate/college/careers/Advi...

hnick 7y ago
He seems to suggest not just getting rid of them, rather letting them know where they stand in the hope they move on or take it upon themselves to improve. > You've got a bad take on it. It's letting the bottom 10% know where they are and then giving them a chance to move on. About 70% (of the bottom 10%) leave on their own. Who wants to be on the bottom once they know it? You don't fire them. That's being mean. Though of course firing is always an option especially in the USA. From that article the key point I found was that he would rather expend company resources nurturing top performers instead of salvaging the bottom performers. He believes it's a much better investment.

AtlasBarfed 7y ago

Yeah, it should really only be a periodic thing every 10 years, but really that's what "reorgs" mean.