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The original version of this strategy is sane, but it has to actually be followed. And in every "implementation" I have seen, it was not. The critical part of

The original version of this strategy is sane, but it has to actually be followed. And in every "implementation" I have seen, it was not. The critical part of this strategy is continuous improvement: to not only rank existing employees and lay off some, but to hire new ones. The NET should be no real change in numbers, but an increase in overall quality. But guess what. Companies invariably failed to do the 2nd, and simply used this as a nifty new way to decide layoffs, during a hiring freeze. The result is predictable: a productivity and morale drain. What did they think was going to happen, that making teams smaller would magically make the remaining people more productive? Let's see: of the people left, the ones who then seem "relatively" productive are just those that didn't lose as many team members; there is no further indicator of who is actually most valuable. But that didn't mean that layoffs stopped: no, the next rounds simply started cutting to the bone.

gaius 17y ago
The critical part of this strategy is continuous improvement I'm not sure that's true. The occasional sweep to clear away the deadwood is one thing. But if I think about the team I'm in right now, it took a long time (years) to build, we are very very picky about who we let in, and it takes a considerable amount of time to get someone up to speed (regardless of the experience they had when coming in). If the edict came down from on-high that we had to fire the least-performing member and hire someone new every year, well, we simply can't find people at the required level and train them to our own standard that quickly. It would simply destroy a high-performing team for the sake of some fad. Also, deciding the bottom 10% is not always as straightforward as it seems. Say HR simply sacks the guy who shipped the least features that quarter and the team loses the guru who helped everyone else with their tricky problems?
- andymism 17y ago
  Also, deciding the bottom 10% is not always as straightforward as it seems. That's exactly right and the biggest problem with a rank and fire policy is that there are so many pitfalls in quantitatively judging relative performance. In the case of a high performing or highly specialized group, the question comes down to who does the measuring and how much power would she have to say letting someone go isn't necessary. I'm just speculating, but my guess is that the powers up high at Enron wouldn't have let that slide. We should also remember that this article was published just 6 months before Enron filed bankruptcy. While ranking and fire sounds sane in principle, we have to wonder how much this sort of hire-fast-fire-fast policy contributed to the systemic and ethical break downs that have made the company infamous.

gaius 17y ago

The critical part of this strategy is continuous improvement I'm not sure that's true. The occasional sweep to clear away the deadwood is one thing. But if I think about the team I'm in right now, it took a long time (years) to build, we are very very picky about who we let in, and it takes a considerable amount of time to get someone up to speed (regardless of the experience they had when coming in). If the edict came down from on-high that we had to fire the least-performing member and hire someone new every year, well, we simply can't find people at the required level and train them to our own standard that quickly. It would simply destroy a high-performing team for the sake of some fad. Also, deciding the bottom 10% is not always as straightforward as it seems. Say HR simply sacks the guy who shipped the least features that quarter and the team loses the guru who helped everyone else with their tricky problems?

andymism 17y ago
Also, deciding the bottom 10% is not always as straightforward as it seems. That's exactly right and the biggest problem with a rank and fire policy is that there are so many pitfalls in quantitatively judging relative performance. In the case of a high performing or highly specialized group, the question comes down to who does the measuring and how much power would she have to say letting someone go isn't necessary. I'm just speculating, but my guess is that the powers up high at Enron wouldn't have let that slide. We should also remember that this article was published just 6 months before Enron filed bankruptcy. While ranking and fire sounds sane in principle, we have to wonder how much this sort of hire-fast-fire-fast policy contributed to the systemic and ethical break downs that have made the company infamous.