By John Tamny RealClearMarkets
It’s a rule-of-thumb among many well run U.S. companies that they must routinely make redundant the 5 to 10 percent of their least productive employees. One obvious reason for doing so is to keep costs down, but there are many other reasons unrelated to cost for doing so.
For one, just as bad apples in sports tend to ruin chemistry such that total team performance declines, subpar performers in an office setting tend to worsen the performance of the most productive for wasting resources, all the while giving the productive an unworthy benchmark of success that allows them to become needlessly satisfied. To shed the least effective is to infuse a more competitive atmosphere among the survivors that aids the bottom line, plus the departed are a flashing signal to the survivors of their fate should they stop working hard.
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