This smells like the Welchian nonsense that drove GE into the ground.
if you only messed up 5% of your hires you'd be a goddamn genius and every company in the world would want to put you in charge of their hiring process
the "standard" is more like 20% of hires end up being bad hires
Maybe we should stop with the gut feel managerial apologies and think about what we’re doing and how it affects company morale, no?
Maybe you can devise a methodology that reduces bad hiring to below 5% across the entire S&P 500 and then share it with us?
Think of a hypothetical organization with 10,000 software engineers. You're the head of engineering. You have ten divisions, each with a VP managing 1000 engineers. Each VP has ten directors, each managing 100 engineers, and each line manager has 10 engineers on the team.
The engineering team reviews the past year. You notice, overall we fired 500 people last year. Okay, so on average that was 5% of staff. Seems reasonable just as a sanity check. (You ask your buddies at other large tech companies, and the other heads of engineering are reporting similar numbers.)
Now you look through the individual teams. A lot of 10-person teams don't fire anyone. That makes sense. But would you expect a director to fire nobody from their org? From 100 people... well, maybe. I'd be a little suspicious. I'd ask some other directors, does this person have a reputation of a very high quality team, or is it more likely that this director is lax, and their org doesn't manage out its underperformers?
Now imagine a VP fired nobody. 1000 people and they all were high performers. Yeah, that doesn't seem right. That VP is probably letting their team get away with low standards. If you were the head of engineering meeting with your VPs, I think the group would be able to come to a consensus of, there's a problem here. It's based on the 5% target but it's not a hard and fast rule.
In the long run, having a high-performing team is better for morale than firing nobody. It's the difference between working at Meta and working at the DMV.
You could end up performing way better firing half of your teams. And what about your managers? How is an underperforming manager in the higher positions ever fired?
I get that measuring performance is incredibly difficult, but dressing it up as if 5-10% of people are underperformers anyway is just so tantamount to how baseless and incompetent most businesses are run these days. Especially in software.
and no i didn't make up 20%, Gartner did a study on it. and most people with management/hiring experience report the same.
"Ratings, although an important way to measure performance during a specific period, are not predictive of future performance and should not be used to gauge readiness for a future role or qualify an internal candidate for a different team. (They can, however, be used to evaluate whether an employee is properly or improperly slotted on their current team; therefore, they can provide an opportunity to evaluate how to better support an internal candidate moving forward.)"
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^But let's say you messed up hiring 20% of your company, and then you corrected that (layoffs for the past 2 years). You haven't hired enough people to justify perma-cutting 5%. And the number of functioning employees who stop working in a role isn't going to be as high as 5%.
The reality is that most hires are probably fine in the role they're in. And you don't actually need to be this aggressive in cost-cutting.
You shouldn't think of all firing as a "mistaken hire". Sometimes you hire someone, and they work effectively for years, and then they kind of "check out" and don't do much work any more. It can be a good decision to hire someone, and then later a good decision to fire them.
It's also not a cost-cutting measure per se. Typically when you fire someone you get to replace the headcount with another hire or internal transfer. The point of firing people is to get rid of low performers and replace them with high performers.
If a construction site was sending formerly qualified people away no longer able to work we would definitely investigate their practices. Tech deserves the same scrutiny.
corporations exist to make money, or maximize shareholder returns, depending on how you look at it. corporations don't exist to make people happy or solve the fundamental societal issues with capitalism. there's merit to discussing that as a separate topic, but in the context of "capitalism exists and you are operating a business within it", you want to fire low performers and replace them with high performers
A band of criminals has no protection over their enterprise. They all go to jail.
And why we have these conversations: to build consensus over these rules.
But it feels like your take is: "Guess all there is to do is just sit and feel righteous indignation while companies have their way with us, and the world crumbles around us."
A person, individually, indeed must always be judged by themselves objectively. But people, in aggregate, can generally be understood stochastically. And in any group of people there will always be the obvious slackers who everyone knows aren't pulling their weight. Good management clears these people out rather than allowing them to fester and lower morale. It doesn't matter if it's high paid SWEs or minimum wage workers, the dynamic is the same.
Essentially the individual incentives for managers are naturally to avoid making the tough decision, the idea is to put some more pressure to make the right call.
Your value of X% will vary but you hope it’s tuned by some research within the org.
At the last place I worked I was managing people and we were given a set of "standards" to rate employees on, used to determine raises, promotions, and so on. I tried my best fairly evaluate my reports, but obviously the standards are inherently imprecise and so the evaluations are mostly qualitative. I found that other managers, wanting to do well by their reports, more leniently interpreted the standards and their reports were promoted more and treated better than my own.
So, wanting to do well by my reports, I re-calibrated my own evaluations to be more lenient. The other managers responded in kind. This arms race continued until upper management found it to have essentially broken the whole system. So then we were asked to rank the performance of reports on our team. I liked everyone on my team and wanted the best for all of them, but also had no difficulty putting them in order from most productive to least productive, with maybe the occasional tie here or there.
Anyway, the whole experience kind of highlighted to me some of the issues with "objective" standards and some of the benefits of relative standards.
The idea that some fixed percentage of people always underperform is possibly Jack Welch's most toxic contribution to management, and with all the BS he spewed over the years, that's saying something. It makes people compete against each other Hunger Games-style as opposed to working as a team.
There is also the more philosophical question of where that standard would come from in the first place. And what if the business finds that the average applicant meets a much higher standard than the current firing standard of the company? It would seem to then make sense to raise the company's own firing standard.
Businesses are people but business is cogs. (In both senses of the word)
To be a manager in a large org, you need to constantly be refocusing the team on the goal. Drift happens. When you have 100 brains, you get 100 ideas.
This "rule of thumb" reason is to make sure leaders are not languishing. It's very easy to see the people, and lose sight of the business goal.
Are all 100 people aligned and driving towards the goal? (If so, amazing and you should fight to keep all of them.)
Note that they also routinely fire perfectly capable people, who exceeded expectations for many years in a row and just had one bad year (sometimes after a team change or a promotion).