

Ask YC: What kind of corporate structure would never fire people? - andreyf

The company I work for fired some people today:<p>http://andreyf.tumblr.com/post/69289027/shitty-day<p>Everyone was bummed out (especially those who had to make the decision). I've never really been fired from a job, but I imagine it must be soul-crushing, maybe because it feels like such a "judgment from above". From a management perspective, it puts a spotlight on the shittiest part of companies, also - it destroys the "we're in this together" spirit, and draws a strong distinction between "management" and "workers".<p>What kind of corporate structure would let people decide to leave on their own, not have someone force them out?
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noonespecial
You could just ask the French. The harder it is to fire employees, the harder
it is to find a job in the first place.

At the limit, you would just reach a no hiring, no firing steady-state with a
minimally functioning economy.

The only activity would be new companies hiring until they were overwhelmed by
dead weight and companies going bust. (Wouldn't that be a little like firing
everyone?) Strange and ponderous unintended consequences lie here!

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opticksversi
_The harder it is to fire employees, the harder it is to find a job in the
first place._

Tenant-rights laws work the same way. The harder it is to evict tenants, the
harder it is to get an apartment in the first place.

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jws
I would think you'd have to be doing "piece work" to not have to fire people,
that is an employee's compensation would have to be a direct result of their
accomplishments, otherwise you won't have a way to deal with the slackers and
"in cube retirements".

You will eventually have people who choose to produce less work than their
benefits cost, much less salary.

[long grisly example of a firing deleted. short version, guy joined company,
got extraordinairly expensive medical work taken care of, took the
telecommuter version of "in cube retirement" until we fired him so he could
take unemployment while ramping back up his previous independent contracting
customers. Left us to pay back his probably fictitious hours billed to
customers, health care costs, and unemployment insurance. See, the short
version is even long and grisly.]

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azanar
Maybe you didn't mean to phrase this as you did, but at-will employment, which
is what most corporations adhere to now, allows people to leave on their own
at any time. Most people don't though, unless they are forced out, because of
fear of the unknown or lack of a motivating factor.

Also, the distinction doesn't always have to be between management and
workers. I would worry about the forward-looking health of the company if that
dichotomy became a topic of conversation anywhere within. Employees are not
stupid, and will realize when something besides the best future prospects of
the company are motivating the cuts being made. Odds are there is a comparable
amount of potential pruning to be done in the management ranks -- some people
I've have read have argued even more potential. Not saying that is what is
happening here, but it was just a thought that popped into my head while
reading yours.

On the other hand, there is the perspective that, if cuts aren't made, the
spirit of "we're in this together" doesn't matter so much anymore, because
there is no more "this". It can be soul-crushing, but not as soul-crushing as
shutting the whole company down instead.

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gcheong
A University with tenured professors is the closest real-life example I can
think of. It would seem to me that if nobody was ever fired, just allowed to
leave when they were ready that there would be such high barriers to entry
into any company that on the whole we would be worse off. I do think we could
do without all the corporate rah rah crap that companies put down their
employees throats. As you say, it make the sting of firings that much worse
when they are so obviously two-faced.

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gommm
Well you have japanese or french companies where they make your work a
nightmare until you quit (supposing you're a seishain or have a cdi). The
possibilities are endless, you can give them very uninterresting and boring
work to do or give them an extremely cramped space that is too small to
work...

Or you can do what my old company did (but to be fair they didn't have much of
a choice it seems) and just ask all employees to cut their salary in half or
quit (glad I quit a few month before that....)

Or, you can just decide that after all living in a country were firing is not
too difficult provides more benefits than problems and that being fired is not
much more damaging psychologically than being pressured to quit because they
can't fire you.

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gaius
Remember it works both ways. If you can't be fired, why should you be allowed
to quit? So the answer is probably "the Mafia".

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bprater
The government is great at not letting folks go!

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lani0
from what i've heard, i'd say semco. no wait, i read the question as 'which
company would avoid layoffs'...

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andreyf
I actually had a company like Semco in mind, but certainly with firing people,
especially for reasons of under-performance. How do you change the way
compensation is allocated so that people who management usually decides to
fire end up deciding to leave because of the structure itself?

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Jebdm
A family?

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gcheong
Not my family...

~~~
Jebdm
:(

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aniketh
sole proprietorship?

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opticksversi
_What kind of corporate structure would let people decide to leave on their
own, not have someone force them out?_

Why bother firing anyone when, instead, you can simply reduce their
compensation?

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eru
Interesting question. See "Why Wages Don't Fall During a Recession" by Truman
F. Bewley. (Review at
<http://cowles.econ.yale.edu/books/bewley/tfb_wages.htm>)

Short answer: Cutting compensation is feared as even worse for morale than
firing.

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opticksversi
Thanks for the lead.

[http://www.nber.org/~rosenbla/econ110-04/lecture/stickywages...](http://www.nber.org/~rosenbla/econ110-04/lecture/stickywages.pdf)
[pdf]

 _Mr Bewley’s theory has some interesting implications. Pay cuts are more
likely at firms whose demand for labour is price-sensitive, such as those in
highly competitive industries. Since many markets are becoming more
competitive, wages may also be getting more flexible—and unemployment may rise
less in recessions. Wages are also likely to be less rigid in short-term jobs,
where workers do not become attached to their firm.

...

Mr Bewley’s book is not the last word on sticky wages. Some of his findings
are probably specific to the north-eastern United States in the early 1990s._

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eru
> Mr Bewley’s book is not the last word on sticky wages. Some of his findings
> are probably specific to the north-eastern United States in the early 1990s.

That's probably true.

His book consists of interviews with managers etc. It makes for an interesting
read.

