Mediocrity drift

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Mediocrity drift
/ˌmiːdɪˈɒkrɪti drɪft/ (n.)
A curious, unintended, negative feedback loop of lazy human capital management.

Let’s say firms generally run a benign affirmative action policy, to increase representation. This means, when presented with broadly equivalent candidates, it will prioritise candidates of a type it doesn’t have when laterally hiring, and those in over-represented groups when selecting candidates for a RIF.

Since one tends to laterally hire one golden strand at a time, but reduce the workforce in large hanks, this creates an odd system effect, predicated on three assumptions:

• That, generally, lateral quitters are relatively good employees.
• That, generally, RIF candidates aren’t.
• That all personnel, however you choose to categorise them, are evenly distributed relative to the cost-value threshold, and that any given subgroup, however classified (except by reference to pure value) will be about as good as any other.

So, IT professionals as a group will be as good as what they do as will lawyers; young as well as old, men as women, and so on. Each will have the same proportions of outperformers and plodders.

If so, then a system which favours one group (group A) over another (group B) has a counterintuitive effect on the remaining populations of each group: on average, the unfavoured group B will increase in relative value, while favoured group A will decrease in relative value, even though no individual performance, in either group, changes at all.

On a second glance, you can see why this should be so. The process systematically weeds out underperforming members of group B and overperforming members of group A. The “good” side of the distribution will progressively become group B-dominated — they are not being bid away as frequently — and the “below par” section will becomes progressively group A dominated, as poor performing group B members are selected for eradication.

Two observations: firstly, here is systemantics in its raw natural state; and secondly, notice how pernicious the idea of the average is here.

On average, the group A is paid progressively less. It looks like group A members are being systematically discriminated against on pay, but this is not so (in this model, no-one’s pay changes) in fact group A members are being favoured for poor performance.

How your incoming lateral hires perform will remain to be seen but, remember, performance is measured relative to cost. Since by leaving they have marked themselves to market, overperformers leave their old slot in the quincunx where they were at the top, and enter their new quincunx at the median. The vicissitudes of random chance mean the new arrivals might wind up in any slot but, in any case, their slot on average will be normally distributed. Your arriving at a higher cost than the ones you are replacing, they start not as outlier good staff, but average ones.

See also

• Lateral quitter
• Reduction in force
• Competence phase transition