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I once heard Enron used a similar strategy, although I can't recall the source. They would annually cut their most "unproductive" employees. It turned out tha

by brewski 17y ago

I once heard Enron used a similar strategy, although I can't recall the source. They would annually cut their most "unproductive" employees. It turned out that those who remained knew how to work the system and to win at any cost. Hopefully Facebook will fare better.

dtap 17y ago
A lot of places do/did this. IBM sales reps were subject to the 70-20-10 principle. 70% of people are average, 20% are above average and get bonuses and 10% are below average and are fired. It was brutal for morale and hurt productivity in a lot of ways.
- TomOfTTB 17y ago
  How is this brutal on morale? In fact, how is this not what goes on at every company of IBM's size? The reality is a company the size of IBM is always going to have a turnover of 10% or more so the "lower 10% rule" is just a way of getting rid of those people who can't do the job. The 70% might feel a little demoralized but if they're good employees they'll use that to make themselves better. The upper 20% are the best of the best and deserve to be treated as such. So to me the 70-20-10 principle just seems like IBM being honest with employees about where they stand and giving them a chance to recognize it and do better if they so choose (some people are happy with average).
dschobel 17y ago
Jack Welsh was doing this during his time at GE. The bottom 10% of the workforce would be let go every year. It's simply an alternative employment strategy to Google's attempts at early optimization (making it hard as hell to get in) which they even concede produces a lot of false negatives.
agripa 17y ago
You're correct. I think they described this process in the documentary "Enron: The Smartest Guys in The Room" . I remember in interviewers with traders there that this was one pretty motivating factor for a lot of the corners that were cut at the company.

by brewski 17y ago

dtap 17y ago

A lot of places do/did this. IBM sales reps were subject to the 70-20-10 principle. 70% of people are average, 20% are above average and get bonuses and 10% are below average and are fired. It was brutal for morale and hurt productivity in a lot of ways.

TomOfTTB 17y ago
How is this brutal on morale? In fact, how is this not what goes on at every company of IBM's size? The reality is a company the size of IBM is always going to have a turnover of 10% or more so the "lower 10% rule" is just a way of getting rid of those people who can't do the job. The 70% might feel a little demoralized but if they're good employees they'll use that to make themselves better. The upper 20% are the best of the best and deserve to be treated as such. So to me the 70-20-10 principle just seems like IBM being honest with employees about where they stand and giving them a chance to recognize it and do better if they so choose (some people are happy with average).

dschobel 17y ago

Jack Welsh was doing this during his time at GE. The bottom 10% of the workforce would be let go every year. It's simply an alternative employment strategy to Google's attempts at early optimization (making it hard as hell to get in) which they even concede produces a lot of false negatives.

agripa 17y ago

You're correct. I think they described this process in the documentary "Enron: The Smartest Guys in The Room" . I remember in interviewers with traders there that this was one pretty motivating factor for a lot of the corners that were cut at the company.