Comment Been there done that (Score 3, Insightful) 289
"getting rid of the bottom 10% every year" is a corporate buzz these days. The idea is that you continuously improve the org by always trimming the bottom 10% of performers. While it sounds good in a CEO seminar, this strategy seriously falls down at multiple levels in practice. I watched it unfold in a company I worked for and it was painful to watch. Eventually I quit, which further upset their strategy since I was one of their top performers. Lets hit the high points...
1. Replacements are many times worse. The strategy assumes that you will end up hiring new people with better skills than the "bottom 10%" you laid off. Finding good talent is difficult and expensive and often the replacements are worse performers than the people you arbitrarily laid off.
2. Continuity problems are rife. While the people you laid off might not be as performant as many of their peers, at least they knew their job. By firing them, you throw away their business knowledge and now have to train new people who will inevitably have to "reinvent the wheel" in many areas where knowledge was lost with the outgoing crew. Beyond that, everyone has to learn to work with the new people.
3. Churn is very expensive. It costs money to lay people off. It costs money to recruit new talent. Once you get the new talent, it costs money to train them. Most successful businesses have programs to reduce churn, not encourage it, for this reason alone.
4. Arbitrarily firing people is bad for team morale. Ultimately, many of the "good" employees (including myself) chose to voluntarily find other employment because we didn't want to work in that kind of environment.
In the end, instead of building the "best possible team", you find yourself mired in mediocrity. Your best talent leaves because they can easily find a different job with an employer that values their employees. You fired the bottom 10%. So all that is left is the people in the middle...good enough to not get cut, but not good enough to readily get a job elsewhere.
1. Replacements are many times worse. The strategy assumes that you will end up hiring new people with better skills than the "bottom 10%" you laid off. Finding good talent is difficult and expensive and often the replacements are worse performers than the people you arbitrarily laid off.
2. Continuity problems are rife. While the people you laid off might not be as performant as many of their peers, at least they knew their job. By firing them, you throw away their business knowledge and now have to train new people who will inevitably have to "reinvent the wheel" in many areas where knowledge was lost with the outgoing crew. Beyond that, everyone has to learn to work with the new people.
3. Churn is very expensive. It costs money to lay people off. It costs money to recruit new talent. Once you get the new talent, it costs money to train them. Most successful businesses have programs to reduce churn, not encourage it, for this reason alone.
4. Arbitrarily firing people is bad for team morale. Ultimately, many of the "good" employees (including myself) chose to voluntarily find other employment because we didn't want to work in that kind of environment.
In the end, instead of building the "best possible team", you find yourself mired in mediocrity. Your best talent leaves because they can easily find a different job with an employer that values their employees. You fired the bottom 10%. So all that is left is the people in the middle...good enough to not get cut, but not good enough to readily get a job elsewhere.