Mar 28, 2009

Bob Sutton on across the board cuts

It's been a long time since I linked to a Bob Sutton post... but here's one where he posts against the practice of forced layoff of the bottom 10% performers.

As organizations look for easy means of laying off employees we'll see a lot more excuses like "we normally fire the bottom x% people" so that they don't have to provide separation payouts.

That is just plain wrong.

Anyway, back to the reasons that the Prof says it is bad:

1. Performance evaluations in most organizations are done badly enough that the way the bottom 10% are selected is flawed, and indeed, most people in flawed systems know that -- and see them as unfair.
2. An across the board cut punishes the most efficient units most, the least efficient units least.
3.  An across the board cut assumes that the best way to weather the bad times -- and then recover quickly when the good times return -- is to have an organization that is a perfect imitation of the one that you had before, but is just 10% smaller.   This last one is especially troubling, as strategic adjustments are almost always needed to weather and recover from tough times.