People with HR experience: how often are large organizations terminating employees if they aren’t the best performers? I’ve heard there is some hesitancy in terminating because it’s so costly to try and hire someone new, and they’d rather keep middling employees then face that or even risk a lawsuit. What about people who worked well in one department, got promoted to another and did poorly in the new job. Does the organization let go of the employee or do they just transfer them to a job more suitable to their skills based on previously strong performance reviews?
Not in HR but had some peripheral experience (and a lot of reading) with these issues when doing payroll systems…
The rule of thumb is that at least in Canada (and the rest of the civilized world, where it is harder to fire someone than it is in the USA…)
To fire someone for poor performance, lateness, or any other job failing - you need a paper trail of effort to show the employer warned the employee and made efforts to remedy the behaviour. After repeated attempts fail, then you have grounds to terminate. Springing it on someone as a surprise - we determined you’re useless, but never mentioned it to you - is guaranteed to get the employer losing any judgement if the employee sues.
If it’s going to cost you several weeks pay plus the time to train a newbie, the guy better be pretty useless. Just how much training and orientation does a job need? Depends how generic or specific it is. “Write me a new web page” - pretty generic. “Maintain this monstrosity of a web program we have already” - could take a while to become familiar with the thing.
Of course, the math is probably different in the USA, but the time needed to train on company-specific pieces of the job is the same.
(I actually saw this once. They guy was an excellent database guy, but his position disappeared and the boss persuaded him to take a process computer job. Then the boss moved on, remote office wanted the guy gone, brought him in and gave him a list of complaints he’d never seen before and offered him 2 months’ pay to leave. When he objected, HR realized that he’d never been told about the complaints before. He got a lawyer, decided “if they want me gone, eventually they will do so.” After the unconscionable way he was treated, both sides settled for 6 month’s pay and he’d leave. For an employee who’d been there 2 years… the result of the employer not following protocol. They knew they’d lose big time in court.)
I am not in HR but I have been in management of the IT industry for about 25 years. I don’t think there is any data available to give you a comprehensive answer, because companies would not want to report this type of data to anyone. At best you will get a collection of anecdotes.
GE under Jack Welch used to routinely terminate the bottom 10-15% of their workforce, regardless of the absolute level of performance.
One large company I worked for (90K employees, system integrator/government contractor) would only occasionally terminate employees for cause. It was more common to “clean house,” where they would periodically do layoffs ostensibly for cost reasons but always sweep out the poor performers in the process. When we did terminate people for cause, it was after a performance review indicating the poor performance, establishing a performance plan (60-90 days) giving improvement goals, and termination if the goals weren’t met. People on a performance plan rarely survived, because it meant management had decided to get rid of you and just needed more documentation to avoid/defend against a lawsuit. In at at-will state, you don’t even need a reason to fire somebody, much less a pile of documentation, but if you fire someone in a protect class you need a pile of defensive documentation. I have not seen a situation where an employee performed poorly and was moved to (or back to) something they could do well, so I can’t comment on that.
And all of this is just my personal experience in one large company in one industry. It doesn’t paint a picture of what happens everywhere.
Stack ranking and it’s ilk used to be used at several large US companies. Most notably at GE under Jack Welch.
If you’re in the bottom 10%, buy-bye.
It’s hell on employees. Discourages a lot of people. Causes backstabbing. Etc.
It’s the perfect system assuming you know nothing about human psychology or business culture.
So it’s less common. MS still uses a variation of the scheme which explains a lot about how whole divisions are perpetually messed up all the time. A good programming team with all top people gets hurt while a poor team with crappy folk hardly notices the ding. So the pressure is towards the bottom, not the top.
In the current market environment in the US, where we are near full employment, a company is only terminating those employees that are destroying value. It is difficult to find their replacements.
In markets of higher unemployment, companies can be more choosy and lay off groups of underperformers and hire more people seeking an upgrade in talent.
Which reminds me of what Scott Adams (Dilbert) said about working in the ISDN division of a large telephone company. (NOT A DIRECT QUOTE): They wanted to know if ISDN was going to be a success. I was torn between telling the truth and covering my ass. In the end, I decided to tell something truthy: I told them that if the ISDN division was well managed and staffed, it would be a revolution in telecoms, and the biggest thing since sliced bread.
Since the ISDN division had been the dumping ground for every incompetent manager and technician in Pacific Bell, ISDN never really took off in California.
When my Dad was in the Navy, he was in charge of a group of men who had been drafted from all the ships in the fleet. Anyone they could spare…