General Electric, once one of the most important companies in America started firing the bottom 10% of performers every year when Jack Welch took over. Seems smart, right? Strangely, however, GE was driven into the ground by Welch. It made a lot of money, for a while, but it was burning down the house and now it’s a has been company. The routine firing wasn’t the only reason, but it was part of it.
Lately I’m seeing companies like Meta and Microsoft saying they’re doing large lay-offs of the lowest performers. Seems smart, eh?
what you find in statistical studies is that their ratings only correlate to their own personality. We don’t see other people, we see ourselves. Groups don’t make this better; increasing the number of people who are bad at rating others doesn’t, in aggregate, turn the ratings good. Everyone is wrong. (There’s a bunch of other statistical stuff here, but what it comes down to is everyone is that there is NO way to measure the performance of knowledge workers.
Generally the best thing to do, counter-intuitive as it is, is have people rate themselves. When asking others, the questions are:
- Who do you plan to promote?
- Who do you go to get X done well?
- Who do you go to when you need extraordinary results.
This is still subjective information, but it is reliable.
The better question to ask during lay-offs is “does this job need to be done?” If it does, unless it’s clear the person isn’t doing his job (in which case they should have already been fired), then lay them off.
Lay-offs generally do more harm than good. There’s plenty of evidence of this. Companies don’t lay-off into greatness, it’s a sign something is wrong and muscle gets cut at least as often as fat.
But using performance reviews (which, as they exist, should be tossed anyway) is extra stupid even if it seems like “duh, of course” idea.
someofparts
Brace yourselves for more lies ahead. Just like Jack Welch, just like the Third Reich, when the stench of their evil becomes too expansive to hide, they will bury us all under their lies. Don’t let them flee. Don’t let them hide. Find them all and try them and execute them in the most public way possible. Raze the tax havens to the ground and put all of that hidden haram money into sovereign wealth funds for all the the nations they have plundered.
Brian A. Graham
Ian, W. E. Deming showed the fallacy of this type of thinking decades ago in his quality seminars . Check out his red bead experiment. https://deming.org/explore/red-bead-experiment/
There are plenty of videos out there on YouTube also. Unfortunately the prevailing ideology in the business world is Peter Drucker’s management by objective.
The amazing think about Deming was that he was publishing his methodology in professional journals almost a century ago.
marku52
Another clue: When manglement starts getting excited about the costs of office supplies, update your resume.
At HP, Carly decided that office supplies cost needed to be reduced. So now, if you needed a pencil in Vancouver WA, it needed to be ordered from our “corporate partner” Staples, in Seattle. Result was every admin now had to keep a pile of pencils and notebooks in their cube. Stupid, but typical Carly.
Another corporate stupid trick. The oscillation between centralization (” We will reduce duplication waste!”) and decentralization (“Reducing decision making time!).
This seemed to occur on about a 6 -8 year time line. Probably the CEO picked up some stupid manglement book at the airport….
Oakchair
Laying off your workforce, and cutting pay is another version of, “the beatings will continue until moral improves.”
Laying people off based on subjective popularity contests is a good way to make sure you have an
outwardly compliant, obedience workforce that doesn’t bring up concerns, problems or questions.
These types of employment conditions gave the world Chernobyl, US Challenger, the opioid epidemic, and Boeing.
They pretend to care about us, we pretend to work.
They retaliate if we point out a problem, we half ass everything.
They pretend their mansions, yachts and diamonds are more important than our healthcare…
Adam Eran
Speaking as a former tech worker I can testify that this is entirely correct. Efficiency expert Deming says as much, saying evaluations are a waste of time.
What any “review” ignores is all of the unspoken motivation that keeps people doing honest work–something far more important than supervision-by-exception.
If you want to see dishonest work, then no need to look any further than US public policy…it’s like watching termites destroy the integrity of a wooden building.
Feral Finster
It’s simply an excuse to reduce headcount.
If humans suck at rating, and perhaps they do, they probably aren’t any better at deciding whom to promote.
Z
The primary intention of this is to create job insecurity in the company’s work force. Many jobs are exempt, meaning that they are paid a salary and not by the hour, so the intentions are to prod those employees to work more hours to “out-compete” their peers so they don’t lose their jobs.
Z
mago
Learn code, it’s the printing press, the Gutenberg of the day.
I yawned, waved a hand back in that day.
Now the tech bros and gals I know tell me tales of woe.
But I don’t know that Santa Cruz
World
Down Santa Barbra way back in the day the Santa Ana’s screeched hot and dry . . .
To get on topic: all the techies I know are laid off and scrambling to make it except for the odd one or two born to wealth.
It’s not my world, but I hear stories.
Jorge
Ian, it’s worse than that. Microsoft’s system is (was) distinctively set up to discourage team spirit: you got ahead by trash-talking your teammates or even sabotaging them, like medical students f-ing up a microscope so that the next students in line can’t see the sample..
This is insanely deleterious to software development.
Ian Welsh
Jorge,
hadn’t realized it was so bad. Though this fad goes far beyond just Microsoft.
Jan Wiklund
Another enterprise that practiced the same policy, with the same result, was Enron. Peter Turchin has described how insane it was in Ultra-society, https://peterturchin.com/book/ultrasociety/.
The crunch was that employees began to make war against eachother. Nobody dared to share knowledge with eachother. And nobody stood up for other employees in any way. The organization crumbled as an organization and all that was left was a bunch of individuals scrambling for booty.
So we can say good-bye to Meta and Microsoft. And good riddance.
marku52
Sears was destroyed by an Randian CEO who thought that having various departments in the store compete would lead to success.
So you ask a guy in hardware where shoes are, and he tells you “We don’t sell shoes” even tho there is a shoe department one floor up…..
Ran them right into BK…..
Carborundum
This isn’t actually about shedding low performers. This is about selling the shedding of significant headcount because they are still significantly overweight. They absolutely can’t admit that they could do the bulk of the reductions they need on a pretty much random basis (keeping the key stars that the business depends on) because it reveals their managers as the straight-line forecast, consensus following bozos they are.
different clue
@marku52,
I remember reading ( can’t remember where), that part of the Randian CEO invader’s motivation at Sears was a slow deliberate stealth-extermination of Sears from within so as to sell off all the most valuable real-estate from close-downing Sears stores, one by one by one.