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

https://news.ycombinator.com/item?id=426153

by andreyf • 18 years ago

5 18 18 years ago

news.ycombinator.com

The company I work for fired some people today:

http://andreyf.tumblr.com/post/69289027/shitty-day

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".

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

Jebdm2• 18 years ago

A family?

gcheong2• 18 years ago

Not my family...

Jebdm2• 18 years ago

gaius• 18 years ago

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".

gcheong2• 18 years ago

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.

bprater• 18 years ago

The government is great at not letting folks go!

azanar• 18 years ago

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.

jws• 18 years ago

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.]

noonespecial• 18 years ago

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!

opticksversi3• 18 years ago

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.

opticksversi3• 18 years ago

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?

eru2• 18 years ago

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.

opticksversi3• 18 years ago

Thanks for the lead.

http://www.nber.org/~rosenbla/econ110-04/lecture/stickywages... [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.

lani0• 18 years ago

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

andreyf• 18 years ago

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?

gommm• 18 years ago

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.

aniketh• 18 years ago

sole proprietorship?

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

Related Stories