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

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

#11

Post by opticksversi »

noonespecial wrote: post #10

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 unin…

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.

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

#14

Post by 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.

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

#16

Post by eru »

opticksversi wrote: post #12

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?

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.

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

#17

Post by opticksversi »

eru wrote: post #16
opticksversi wrote: post #12

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?

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.

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.

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

#19

Post by eru »

opticksversi wrote: post #17
eru wrote: post #16

Earlier quoted context omitted.

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.

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 als…

> 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.

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

#20

Post by andreyf »

lani0 wrote: post #13

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

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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