Extreme prejudice

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Replacement premium

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

This does depend on you not needing to replace employees who leave. The operating theory — honoured in the breach — is that RIF candidates are indeed surplus to requirements. Lateral quitters less so but, in an organisation big enough to have its own human resources department, you probably don’t need to replace leavers — or at least wouldn’t, if you could hang on to those staff who actually get things done, while getting rid of grifters. Parkinson’s law obtains. All big organisations have more middle management staff than they need.

“Middle management” is a contradiction in terms, after all.

But it is a canny organisation that only loses its grifters. 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.

Quid pro quo

The good burghers of HR are scarcely more inquisitive about underperformers than they are about lateral quitters. They should be.

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.

Professional services firms are “QIB”s of the employment world they are experienced, educated, they have easy access to professional advice and are perfectly capable of assessing and for an extended time bearing the risks of bad performance.

They are not sweatshop workers. They are neither treated, nor paid, like itinerant fruit pickers. They don't need the protection of unions and benign but patronising employment conditions. The usual labour protection rules should not apply.

This would be for everyone's good — except the grifters and shitty employers.

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.

It is mad really: finance professionals are not pit-workers. They have market power and a liberal education: they don’t need the unionised protections. Good staff shouldn’t want them. Bad staff shouldn’t be entitled to them.

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 have to be a privatised welfare system for their staff. The defence against mediocrity drift is to quickly deal with laggers.

A byThe 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.