4 ms·

They have a new performance rating system that says that 5% of every team should be ranked as "needs improvement" meaning an automatic PIP. When MSFT did this i

They have a new performance rating system that says that 5% of every team should be ranked as "needs improvement" meaning an automatic PIP. When MSFT did this in the 2000's, it was a requirement to fire that group. Firings for performance do not entitle an employee to severance, but official "layoffs" generally do outside of bankruptcy. Net cost of this move is hidden in employees spending time updating resumes and doing job interviews, not in direct bottom line dollars from actually paying out severance.

mrgoldenbrown 2y ago
The other hidden cost is the paranoia and backstabbing that is encouraged when someone in every team has to be fired even if everyone did objectively excellent work.
- throwaway7ahgb 2y ago
  Paranoia and backstabbing happens everywhere. What happens if stack rank->pip is too obvious is that people and teams will not cooperate with newer fresh meat. They're incentivized to keep knowledge protected for their job. New people struggle to get above the pip mark and it becomes a revolving door.
gamblor956 2y ago
Firings for performance do not entitle an employee to severance, This keeps getting repeated on this thread but its not true. U.S. WARN laws require severance or 60 days notice for mass layoffs (which would definitely include 5% of a company as large as GM). Only terminations for cause are exempted, and performance is only grounds for cause in a very small handful of "right to work" states.
- mystified5016 2y ago
  The point is that this move isn't a mass layoff. It's not a layoff at all, it's firing "under-performing" employees. QED no entitlement.
  - gamblor956 2y ago
    No, my point is that it's irrelevant whether they're underperforming or not; what matters for WARN purposes is the amount of workers being laid off. Only for-cause terminations are excluded the WARN Act, and for-cause in this context means specifically behavior that violates the law, or the employee handbook setting forth company rules (which are binding on both the company and employee, which is why companies make you read them every year). Also note that companies can't make poor performance a violation of company rules; this has been tried before and smacked down pretty harshly even in right-to-work states. Thus, those 5% laid off due to stack ranking are entitled to 60 days of severance, or 60 days notice of an impending termination.
    - throwaway7ahgb 2y ago
      You're missing the part where 5% isn't let go at once triggering WARN. Think of this is as a continuous process of evaluation -> pip -> fire. This means no WARN and no severance.
      - gamblor956 2y ago
        You're missing the part where the WARN Act doesn't require the employees to be let go all at once. And the part where rolling layoffs at a company the size of GM will all involve multiple layoffs exceeding the WARN threshold. And the part where no general counsel will let their company knowingly subject itself to a $500 daily fine per employee, in addition to full back pay for the mandated period. And the part where GM satisfies its WARN obligations by paying the mandated severance (or more) in lieu of providing advance notice...which is what most companies do...
- eadler 2y ago
  "Right to work" is an anti union provision and has nothing to with being fired for cause or not.

mrgoldenbrown 2y ago

The other hidden cost is the paranoia and backstabbing that is encouraged when someone in every team has to be fired even if everyone did objectively excellent work.

throwaway7ahgb 2y ago
Paranoia and backstabbing happens everywhere. What happens if stack rank->pip is too obvious is that people and teams will not cooperate with newer fresh meat. They're incentivized to keep knowledge protected for their job. New people struggle to get above the pip mark and it becomes a revolving door.

gamblor956 2y ago

Firings for performance do not entitle an employee to severance, This keeps getting repeated on this thread but its not true. U.S. WARN laws require severance or 60 days notice for mass layoffs (which would definitely include 5% of a company as large as GM). Only terminations for cause are exempted, and performance is only grounds for cause in a very small handful of "right to work" states.

mystified5016 2y ago
The point is that this move isn't a mass layoff. It's not a layoff at all, it's firing "under-performing" employees. QED no entitlement.
- gamblor956 2y ago
  No, my point is that it's irrelevant whether they're underperforming or not; what matters for WARN purposes is the amount of workers being laid off. Only for-cause terminations are excluded the WARN Act, and for-cause in this context means specifically behavior that violates the law, or the employee handbook setting forth company rules (which are binding on both the company and employee, which is why companies make you read them every year). Also note that companies can't make poor performance a violation of company rules; this has been tried before and smacked down pretty harshly even in right-to-work states. Thus, those 5% laid off due to stack ranking are entitled to 60 days of severance, or 60 days notice of an impending termination.
  - throwaway7ahgb 2y ago
    You're missing the part where 5% isn't let go at once triggering WARN. Think of this is as a continuous process of evaluation -> pip -> fire. This means no WARN and no severance.
    - gamblor956 2y ago
      You're missing the part where the WARN Act doesn't require the employees to be let go all at once. And the part where rolling layoffs at a company the size of GM will all involve multiple layoffs exceeding the WARN threshold. And the part where no general counsel will let their company knowingly subject itself to a $500 daily fine per employee, in addition to full back pay for the mandated period. And the part where GM satisfies its WARN obligations by paying the mandated severance (or more) in lieu of providing advance notice...which is what most companies do...
eadler 2y ago
"Right to work" is an anti union provision and has nothing to with being fired for cause or not.