[CardinalSagehen]

In 2009, we did a combination of layoffs (30%) and 5% payroll reductions.  the 5% was paid back by the end of the year due to pent up demand.

I liked the mix.  Candidly, I have 34 employees.  There's five that I would lose right now if I could.

As you may know, Jack Welch said you should dismiss the bottom 10% of your organization each year. This has led to endless parodies and assertions that you must therefore in the end fire everyone. Many companies say "We have the best, most ideal workforce in the world". While in some cases that may be true, in most cases it isn't. I don't buy the 10% idea, but every organization should look at it's people and ask themselves "Does employee X have a future here?". Many times, the truthful answer is no. It may not be their fault. It may be a fit issue. It may be that the company just can't seem to find an optimal way to use them. It may be that the employee has miscast themselves and has unrealistic goals. However, you aren't doing them any favors by keeping them. I have had to sit down with friends and tell them that the truth was that they just weren't ever going to "make it" in the company. Several of them resigned. Some were really not happy. However several of them thanked me a few years later. They had found a place where they could thrive, which they couldn't have found had they stayed. We are still good friends. If it isn't working, or isn't working well, it is better for all concerned to recognize it and move on.

Totally agree with the conventional wisdom of this, in normal times. It’s what I would strive to do, too, and it’s what I would want done with respect to my own performance.

But if we’re in for a time of great scarcity with 20% or 30% unemployment for a few years - which I don’t think we are, but it’s well within the realm of the possible - then you would be considerably more likely to lose a friend for talking straight and cutting them loose. Let’s hope we don’t end up there.

[CardinalSagehen]

In 2009, we did a combination of layoffs (30%) and 5% payroll reductions.  the 5% was paid back by the end of the year due to pent up demand.

I liked the mix.  Candidly, I have 34 employees.  There's five that I would lose right now if I could.

As you may know, Jack Welch said you should dismiss the bottom 10% of your organization each year. This has led to endless parodies and assertions that you must therefore in the end fire everyone. Many companies say "We have the best, most ideal workforce in the world". While in some cases that may be true, in most cases it isn't. I don't buy the 10% idea, but every organization should look at it's people and ask themselves "Does employee X have a future here?". Many times, the truthful answer is no. It may not be their fault. It may be a fit issue. It may be that the company just can't seem to find an optimal way to use them. It may be that the employee has miscast themselves and has unrealistic goals. However, you aren't doing them any favors by keeping them. I have had to sit down with friends and tell them that the truth was that they just weren't ever going to "make it" in the company. Several of them resigned. Some were really not happy. However several of them thanked me a few years later. They had found a place where they could thrive, which they couldn't have found had they stayed. We are still good friends. If it isn't working, or isn't working well, it is better for all concerned to recognize it and move on.

Totally agree with the conventional wisdom of this, in normal times. It’s what I would strive to do, too, and it’s what I would want done with respect to my own performance.

But if we’re in for a time of great scarcity with 20% or 30% unemployment for a few years - which I don’t think we are, but it’s well within the realm of the possible - then you would be considerably more likely to lose a friend for talking straight and cutting them loose. Let’s hope we don’t end up there.