Removing hiring and firing as a tool (Pt 1 of 3)

by Rob Galanakis on 2/12/2013

Inside of Mike Bland’s response to my Project as a Ship post is this comment of how he organized his Google Grouplet:

I had no power to hire or, truthfully, even fire anyone. The best I could do was persuade whoever was interested to participate, to give them the clearest objectives and parameters I could… and then do what I could to remove obstacles and make their jobs as easy and effective as possible.

Which got me thinking- should hiring and firing be totally restricted as a tool for addressing problems?

In Japan, lifetime employment at larger companies has been a staple for decades. And in spite of the inability to deal with problems by firing individuals, having layoffs, or hiring overseas executives, Japan managed to achieve world-leading levels of quality. They did this with very many constraints post-WWII and flagship firms have continued to consistently innovate and improve.

Hiring and firing is too often used as a panacea for whatever ails a company. It makes sense, right? If you have poor performers, getting rid of them will improve everything else. If you have a need for senior talent or leadership, you can just hire in from the outside if you don’t have an obvious internal candidate. Unfortunately, as decades of precedent show, neither of these ideas work very well. Of course, ‘well’ is not universal. I’ll define ‘well’ as a company who can make a sustainable profit (and, if desired, growth), supply good jobs, and improve the communities they are a part of. If your definition of ‘well’ is only to maximize the investment of shareholders, maybe these posts aren’t for you.

What would happen if we removed hiring and firing as tools managers could use to fix problems? I’ll break it down over the next two posts.

PS: A couple things. First, most of these ideas are inspired by W. Edwards Deming, so if these are things you are interested in I’d highly encourage you to read up on him, and Lean books about Toyota (especially Liker’s series). Second, I am not a big reference-giver unfortunately, but I have researched most of my claims, but if something is inaccurate or you disagree I’d be happy to discuss. Finally, I also want to make clear I’m not prescribing how to govern a country or run an economy. I’m talking about individual companies, and to some degree projects.

rob.galanakis@gmail.com

There is 1 comment in this article:

  1. 2/12/2013Robert Kist says:

    Interesting topics you bring up.

    Regarding the Japanese (a bit OT), the Japanese realized early enough that only quality can elevate their products above the “cheap but crap” level. Something I feel Chinese brands still have to do. Often quality gets cut first, after all, who cares about quality when there’s almost no warranty and you already have the customer’s money? It’s a really interesting topic to read up about Japanese work into quality practices where they involved everyone in the production line to openly discuss issues and make suggestions for improvement. Paired with a strong work ethic and tight company culture this paid off in no time. Although you need to get people extremely identified with the company to ask such a commitment. Quality circles, for example, happened after work, unpaid. In a hire-and-fire culture you’ll rarely get such commitment from employees until they’re afraid. But afraid employees are rarely useful and engaged. And why should they? You cannot buy loyalty and enthusiasm quickly with perks and bonuses. You must earn it by being a trustable and dependable employer, and that takes time.

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