Extreme prejudice

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Extreme prejudice
ɪksˈtriːm ˈprɛʤʊdɪs (n.)

1. Employment (rare): End a useless employee’s employment without that employee’s consent, making a mental note never to hire anyone even vaguely resembling that person again. Hence

2. US military intelligence: (To terminate with ~) tactically assassinate. Put out of his, and our misery.

We have canvassed the odd phenomenon of mediocrity drift whereby the feedback loops of lateral resignation and reduction in force induce an odd system effect whereby the parts of your workforce you are most anxious to retain progressively deteriorates in quality, if not numbers.

Employment is not, naturally an equilibrium state. There is a sweet spot when master and servant both feel they are getting a reasonable return for their investment, but keeping to that sweet spot requires constant attention, the way navigating along a straight road still requires steering. In a perfect world one would do this by trimming and goosing salary expectations as circumstances change, but lord only knows it is not a perfect world.

Hence these system effects.

Now you might be inclined to look at this and think, “well, still, this is a fine state of affairs: by pruning the truly dismal in job lots and letting the jumped-up and flighty go one at a time, we are nicely containing our costs within a tight range.”

This would be true were you not obliged to replace those who leave. In an organisation big enough to have its own human resources department, Parkinson’s law obtains: you probably don’t need to replace leavers — or at least wouldn’t, if you could hang on to those few staff who actually got things done.

And indeed, the operating theory for a reduction in force — fully honoured in the breach though it is — is that those put “at risk” are functionally surplus to requirements and should not replaced. This is of course fatuous: most RIFs are a cheap way of trimming poor performers.

But it is a canny organisation indeed that keeps all its stars and only loses donkeys. If all you have left are work-shy plodders, do not expect them to take up the slack. You will need to back-fill departees, and — unlike those departing — you must pay the going rate.

At this point you have categorically worsened your position.

So herewith our premise. It may seem a bit Hobbesian. But firms should be more active in targeted termination. It is for the better of everyone.

Quid pro quo

The good burghers of HR are scarcely more inquisitive about underperformers than they are about lateral quitters. In recent times, egged on by loopy notions of a higher purpose they have become distracted by theoretical questions of social justice, and lost focus on their one job: making sure the staff are cutting mustard.

Generally, clods are allowed to lie fallow for unfeasibly long periods, languishing in a pool of non-advancement, continuing to draw a underwhelming salaries — in that they are more than they are worth — until finally tilled at one of the firm’s irregular mass culls. Here many laggards and no small number of good ’uns, are dispensed with at once, more or less indiscriminately.

Redundancy rounds are a lazy, cowardly way of getting rid of staff you should have actively managed out. RIFs let you dress up performance management as ”resource reallocation” — something it really isn’t. These are staff requiring,and deserving, termination with extreme prejudice who can hang on thanks to well-meant but doltish workplace legislation.

Staff of professional services firms — even the secretarial ones — are the “QIB”s of the employment world. They are experienced, biddable, educated, they have easy access to professional advice and are perfectly capable of assessing and, for extended periods, bearing the risks of poor performance.

They are also, as a class, grossly overpaid.

Spare your violins. For all their complaints of their working conditions, these people are hardly itinerant fruit pickers. They need neither the matronly eye of a benign union nor the kindly blanket of labour regulations originally formulated to defend optionless pit workers from rapacious robber barrons. Good staff shouldn’t want them. Bad staff shouldn’t be entitled to them.

It would be for everyone's good — except grifters and shitty employers, were the usual rules relaxed to encourage greater mobility, that night persuade firms more often to crowbar the many fat birds off the thin branches at the top of the tree.

So, financial colleagues: we need to get over the stigma of dismissal. Here, our American friends have the right idea: employment at will. Well-meant formalistic barriers to removing staff have the unintended consequence of increasing barriers to hiring staff, since it is that much harder to reverse a duff hiring decision.

Good staff erect personal defences against mistreatment termination as they go: their contributions, their expertise, their institutional knowledge and their rich, informal networks name then to good to mistreat. But, irony: if workplace regulation makes it harder to hire, this gives shitty employers licence to treat good staff worse, as they have fewer options to leave.

No firm in its right mind — okay, okay, that leaves out many of them — will fire an outperformer: those in their wrong minds self-harm when they do. This applies, too, to functional diversity. Smart firms will ensure they have cultural and cognitive diversity because the universe of business is culturally diverse. Firms that don’t will go out of business. Q.E.D.

End of day, professional services employers should not be a privatised welfare system for their staff. The defence against mediocrity drift is to quickly deal with laggers.

The first tool here is discretionary bonus. With this you can bring down cost and push the laggard into the safe zone. If you are flatlining on doughnuts, and you can’t figure out a way of redeploying said laggard, then have the conversation. Be clear, have it early.

Look after what you have

How to stop this? Well, for one thing, focus your attention on your employees who deserve it: the good performers.

Try to stop them leaving. Do this by figuring out why they are leaving. There may be complicated sociological explanations, but for most places it will take no towering intellectual insight to figure it out. In broad strokes it boils down to: money, progression, and quality of work.

Another way of looking at that continuum is this: you pay poor employees more than they are worth to you, and good employees, less than than they are worth, expect to have crappy employees.