So in my last post, I wrote about the possibility of taking hiring and firing off the table as a management tool. In this post, I will focus on the firing. Firing itself has two halves: individual dismissal as a way to fix performance problems, or layoffs as a way to fix organizational problems.
Lifetime employment has been a staple practice in Japan for decades. You can read more about it here, but it is as it sounds. Employees are only removed in extreme circumstances. Layoffs are almost unheard of.Â Tied up in this talk of firings is the modern management malpractice known as performance reviews. Enough has been written about how they are the greatest scourge ever inflicted on modern industry so I won’t go into it.
Using firing as a way to manage performance problems cannot work. The “10x Programmer” myth speculates that the difference between best and worst programmers is 10 times productivity. This sounds a lot but it putsÂ every programmerÂ within a single order of magnitude. That’s not that huge. Most of us are going to be clustered in the middle. So, all other things being equal, if you could make sure you are only hiring better people than you’re firing, you’re looking at a still small boost to productivity. And I want to be clear, the idea that you can hire a “better” person is unlikely- have you figured out how to systematically make your hiring better and proved it?
More likely, you are firing someone because their skillset or attitude is not so useful or relevant anymore. The QA person who won’t script. The programmer who won’t write unit tests. The designer who wants to work on something else. Firing an employee to fix this is ridiculous. A poorly performing employee is a management failure, not an employee failure. If the employee could have done better, she would have. By pushing the responsibility onto the employee, you are missing the opportunity to fix a problem. When you have someone in this situation, you sit down with other management and figure out why this situation exists and what can be done about it. And you sit down with the employee and engage with them about what’s expected and you come up with a plan. And if the plan isn’t met, you revisit it and see why it failed. You don’t fire the person. If they are truly unwilling to change, they will quit. Don’t worry so much about the “lost time.” You are already pulling along years of dead weight in your “high performing organization.”
There’s also the issue of incompetent management. Performance problems aren’t unique to individual contributors (ICs). Managers must be able to be “demoted” or reassigned. It should not be suicide to one’s career to move into another role that is a better fit (due to other circumstances or do to the manager’s abilities). A good idea is to not pay managers more. Title changes would hurt a lot less if they didn’t involve salary, and it wasn’t seen as the company punishing a manager but seeking to make a long term investment instead. It takes absolutelyÂ forever to fire an incompetent manager, and oftentimes it never happens. And clearly a poorly performing manager is probably an even bigger risk than a poorly performing IC. There need to be effective mechanisms to improve performance of managers even more than ICs!
Removing firing as a tool requires you to deal with performance problems in a way that teaches you something. It takes a coward to fire someone. It takes a leader to accept responsibility for a bad situation and work with involved parties to make it better. Odds are your employees want to make things better. If they really hate you and don’t give a shit, you are probably not the type of person to read this blog.
And then there are layoffs. Ugh. The inevitable outcome of some new executive, or a merger, or strategic change, or restructuring, or whatever. A layoff should be the absolute last option. It should come after executive pay cuts. It should come after a vote on temporary across the board salary cuts. It should come after stopping the acquisition of new companies. It should come after cutting back on spend-heavy areas like marketing. It should come with a mea culpa from executives, not a “we are rightsizing.” It should come with a deep and transparent retrospective of how things got out of hand (more than just “global financial crisis” please!). It should come with a plan on how to make sure this doesn’t happen again (and a commitment to never do it again). It should come with an understanding of how god awful and unnecessary layoffs are (Japanese companies are the obvious example but there are plenty of long-lived companies in Western industry that have never had layoffs). Of all the management cancers the technology industry has been able to avoid, layoffs are not among them.
Layoffs are the most blunt tool to ‘fix’ a problem, no matter what that problem is. They cause an untold amount of harm. The blunt trauma is almost impossible to learn from- you don’t get to keep the limb you’re chopping off to figure out what went wrong and what to do better (other parts of the body may come up with explanations but they’re probably wrong).
The executive that has layoffs is being as lazy as the manager that fires. Just because both of these things are emotionally difficult all around does not make them the correct thing to do. Avoid them not because they’re hard, avoid them because there are better ways of doing things.Â Fix your problems by actually fixing your problems.Â Take firings as a tool off the table completely.
Next up is hiring senior people from the outside.