Why top firms fire good workers

This strikes me as 1000% accurate from my work experience. I see people who do amazing work but get unrecognized and then move on while other people do mediocre work but put a huge effort into self-promotion and end up being promoted despite the work not being great... The reorgs also seem like a way to kneecap the employees and lower expectations.

> In short, the “up-or-out” path of professional life may not just be a cultural phenomenon among top professional service firms but also an efficient response to how reputation is maintained and information flows. What looks like a ruthless system of constant turnover, the researchers argue, is in reality a finely tuned mechanism that helps the market discover and reward true talent.

For people who are fans of this system, I genuinely want to understand how one overcomes the common sense, humanitarian centric rejection of corpo speak like this. Is it about just drinking the koolaid?

Actually there was a discussion about cults yesterday and now that I think about it, I'm seeing all sorts of parallels here: inventing new words and using that to complete redefine reality and transform your fundamental understanding of how the universe works or should work, supplanting with your made up fantasy world and rules that rewards the best play actor.

Firing the best person because they outshine the master is plausible. One of the 48 Laws of Power.

Literally what you said: getting paid to tell management what every employee knows and has been trying to tell them for years.

That shouldn't be happening. This is managerial incompetence normalized. Why does the management of a company not trust its own people? They should have hired their people from "the outside" already. The correlation you're seeing is people who are not leaders but bosses in charge of teams. Good leaders don't need external validation, they either trust their team or make the problem fully outsourced to an external team like a consultant firm.

> all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best

That tracks with my experience. Everyone I've met whom I know are competent at what they do have had similar remarks on these firms.

From my observation, they are part of a larger endemic issue of metric-chasing. They come up with a list of check boxes where if you follow them like a formula you'll achieve measurable results. Everything they do revolves around measurements and meeting measurement targets.

The problem is, when targets aren't met, then their method and advice is put into question. Therefore there is a perverse incentive at play where on one hand they do really want you to succeed, but on the other hand getting into the weeds and figuring out why you can't meet the targets deviates from their check-list approach. It will look like they advised you to do something, and now they're telling you you should do something else, it will look like they don't know what they're doing, and the one cardinal rule of consulting is you never say you don't know (or appear like it). The result is they water down what needs to be done, and they'll be flexible with interpretations of what counts as measurable.

In summary, I would like to say there is a place for these firms, but I won't, because I don't know if that is even true. I'll say that an outside firm will never have your company/team as their #1 priority; there will absolutely and without exception be scenarios where it will be a conflict of interest for them to do something that will benefit your team/org.

And using these companies to justify decisions, or back up decisions.. that again is part of the leadership endemic. People who do that are not leaders. They're bosses covering their own you-know-what. My opinion is that they facilitate poor/weak management culture.

Talent-wise, there is no doubt they hire the most talented and experienced people. But it almost feels like hiring a navy seal to be your personal trainer, but if you do what they say and you're not seeing results, they're not allowed to figure out what really is happening and correct their own advice. And to start with, they won't even aim to make you look like a navy seal, but work out some formula most people can work with, so the whole navy seal thing is just for show anyways.

Sorry for rambling on, maybe I'm too biased with my own experience here.

EDIT: I just wanted to add: If any company is firing the bottom performers, their management don't understand the problem of perverse incentives. Actual performance no longer matters, performance that can fool the measurement system sufficiently enough is what matters. The metrics will look good, revenue will be mediocre and long term sustainability will degrade. Good or bad, metrics and measurements shouldn't be used to make decisions, they can only be used to ask questions! An employee can have bad metrics if they're spending all their time helping other team members or solving yet-to-be-measured problems. Matter of fact, I would even dare say that metrics/measurements/KPOs shouldn't even be considered at all unless goals aren't being met. If your golden goose is laying bigger and bigger eggs, don't perform explorative surgery on it.

I’m not doubting your story (I’ve never worked in India) I just don’t understand the incentive to fire a good worker in this scenario.

You have clearly not worked in any major company in India, Or even other nations (since PIP is a common process worldwide in most companies).

Any employee can escalate to the company Ombudsman if they feel they are being subjected to unfair treatment or inappropriate processes. It is the job of the Ombudsman to be neutral and do an thorough impartial investigation.

PIP (Performance Improvement Plan) is a formal process, it even HR and senior management (skip level 1 manager at the very least) are involved in it. There is specific time duration and set of expectations given formally (under review process with HR, so there is full transparency) to the employee to improve the performance.

A top performer cannot be nixed via PIP, because the onus of performance proofs is on the employee and those evidences are visible to HR and upper management.

PIP is used to nix bad performers, not top performers.

Typically, even if an employee clears PIP, they need to get an "Exceed Expectations" (or equivalent) appraisal rating in the next appraisal cycle in order to continue in the organisation, but if they get lower rating instead, they are in hit list to be nixed during next round of job cuts whenever it happens.

Top performers may quit due to office politics and lack of growth, but PIP is not their way out.

PIP is a permanent black mark on an employee's record (which is maintained historically), so it disallows the company from hiring that person again if that person exited due to PIP.

Top companies in India and elsewhere have very formal processes, including Ombudsman and PIP, which get audited.

The quality of the work isn't as important as the margin between the cost of labor and the income earned by it.

To be the best and still pass that test you need to be so good that it makes up for your higher cost, which is a more difficult bar to pass than being good enough but being cheap. Also there's an upper limit anyway where no matter how good your margin is, your cost can't be justified, since "local market rates" apply downward pressure, as well as an upper limit on how much clients are willing to pay or the size of the market you're selling to or temporal factors e.g only a certain amount of widgets a country can consume in a month.

There is no labor under capitalism without significant profit margin, and always the profit extractor (employer) is trying to get the most profit for the least cost from the profit generator (employee), who is in the opposite position, but at a disadvantage since they are a human who is influenced by things like social pressure, a desire for recognition, and the natural human tendency to be good at something and do it well. The employer isn't human, it's just a profit generating algorithm, and so only cares about such things insomuch as it can leverage them to increase profits.

There's other factors in play as well though that corporations can't include in their algorithm since they're purely selfish actors which results in macroeconomic catastrophes, so for example if wages get too low then people don't buy things anymore which drives down profits from selling which forces wages down lower and so on until economic collapse.

But yes, unions are great particularly when the labor market is tough.

Unions are mostly extortion schemes to benefit the union leaders.

My read is that they're getting paid in prestige rather than money. The worker can turn that prestige into money further down the line by saying "I worked at so-and-so for five years" at their next interview.