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Why top firms fire good workers

rochester.edu

51–60 of 263 posts

Re: Why top firms fire good workers

#51
post #37

What a weird take. It's good for the employee to get fired because then the company doesn't have to pay them competitively?

Yes, this is one of the inherent contradictions in capitalism.

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.

Re: Why top firms fire good workers

#52
post #19

The method used in all the big4s in India is this: You join and do well as usual. Your credit is shared by those above you. You continue to do well, your manager gets promoted or you get a manager who needs a promotion and needs the credit you generate. He gets promoted, aggregates your good work and shows it as his. You then get sidelined, PIPed, or leave in disgust. It's political and I have begun to strongly belie…

But this is how it should be. Very best of the best start their own startups. Second best, start their own consultancies. Next on, work independently. Next on, are principals in small firms - they are the irreplaceable singular employees that the owner of a small firm wholly depends on. And then the mediocre and the bad ones, that work in largest firms. This is how it's always been.

No. If you want to build big products, you need big organizations (i.e. companies). Big products have moats, often network effects or natural monopolies or whatever, but if nothing else then just the sheer investment required to build a competitor. Products with moats can extract wealth. So big companies are often extremely profitable. That's where the money is. Consulting is something talented people do in countries with no big tech companies.

Re: Why top firms fire good workers

#53
post #49
post #19

The method used in all the big4s in India is this: You join and do well as usual. Your credit is shared by those above you. You continue to do well, your manager gets promoted or you get a manager who needs a promotion and needs the credit you generate. He gets promoted, aggregates your good work and shows it as his. You then get sidelined, PIPed, or leave in disgust. It's political and I have begun to strongly belie…

The only one selling a lie here is you. 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 (Perform…

I got a PIP because my manager mistakenly thought I was stealing equipment, and he just kept adding agile story points until I failed.

I was too pissed off to go to an ombudsman. It honestly didn’t occur to me. It just felt like “this guy hates me and wants me out.”

He called me two years after I was fired to inquire about missing equipment that I never had.

Re: Why top firms fire good workers

#54
post #9

TL;DR When workers start out, the firms know a lot more about their abilities than the clients do (they have an "information advantage") as the worker has very few ways through which to prove their abilites. Over time, though, as the employee's public performance increases (through successful cases, good investments, etc.) the information advantage the firm has becomes lower. Eventually, the firm lets the employee go…

I completely agree. I’ve actually had to let someone go in the past for this exact reason.

Re: Why top firms fire good workers

#55
post #52

Earlier quoted context omitted.

But this is how it should be. Very best of the best start their own startups. Second best, start their own consultancies. Next on, work independently. Next on, are principals in small firms - they are the irreplaceable singular employees that the owner of a small firm wholly depends on. And then the mediocre and the bad ones, that work in largest firms. This is how it's always been.

No. If you want to build big products, you need big organizations (i.e. companies). Big products have moats, often network effects or natural monopolies or whatever, but if nothing else then just the sheer investment required to build a competitor. Products with moats can extract wealth. So big companies are often extremely profitable. That's where the money is. Consulting is something talented people do in countries…

Yes you are right, but it doesn't contradict my statement. Of course big companies are necessary and big companies are where the moats and thus wealth creation is. But it doesn't mean they need to hire the best people (market control/moats make them competitive even if almost all employees are disposable drones), or that they can do it (because of agency problem). Small companies both need the best people (they don't have those moats and also don't have division of labor deep enough to make do with more stupid people doing better granulated/formalised work, everyone has to wear many hats and be flexible), and can do it because agency problem there is less pronounced due to fewer layers of management. Yes as a result, they make less profit (can take less of market for having no/smaller moat, and have to pay more to people because they have to hire better ones), but this is the company's problem, not employees'.

Re: Why top firms fire good workers

#56
> The firm starts to underpay those better workers who kept their jobs, akin to making them pay for being “chosen.” Consequently, profits do not decline and may even increase.

> “Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’”

This is exactly what unions are for. Any time there are enough skilled workers avilable that a company can let good employees go as a warning to others not to complain about substandard wages it's clear that the imbalance of power has resulted in exploitation. There is strength in numbers though which is why companies go to great lengths to convince people that you all alone negotiating with a huge corporation of people who have more money and resources than you'll ever see in your lifetime and who can replace you with someone else easily is somehow totally fair. No matter how special they might make you feel, you are almost always disposable to them and they will drop you at any time and for any reason, even if it's just to make an example out of you to keep your ex-coworkers in fear.

For the very few employees out there who actually are totally indispensable, any sane company would be looking for your replacement immediately because there's no telling what might happen to you or when. No company should fail because one employee dies in a car cash or gets a cancer diagnosis. Until you are also replaceable the company isn't safe. They'll pay you handsomely to keep you, right up until the moment they don't have to.

Re: Why top firms fire good workers

#57
post #20
post #19

The method used in all the big4s in India is this: You join and do well as usual. Your credit is shared by those above you. You continue to do well, your manager gets promoted or you get a manager who needs a promotion and needs the credit you generate. He gets promoted, aggregates your good work and shows it as his. You then get sidelined, PIPed, or leave in disgust. It's political and I have begun to strongly belie…

Why would a manager who’s able to claim the credit of their reports in order to advance their own career then PIP the best ones? Wouldn’t they keep them around to keep claiming credit from? 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.

They don't care that much. Probably from their point of view the merit is theirs anyway and consider anyone below them easily replaceable. Also, good employees understand their value and will start asking to be rewarded adequately for their contribution- this is a problem, so getting rid of them or waiting until they give up and leave solves it.

Re: Why top firms fire good workers

#58

Earlier quoted context omitted.

[flagged]

No one’s mentioning caste here except for you. This thread is describing managers taking credit for their employees’ work, which absolutely happens in the US. It’s less frequent at the best companies like in big tech - but I bet it’s very common at random mid sized companies. Especially outside of tech.

It makes sense that caste would amplify this effect, because unequal treatment is already a cultural norm. In the US, even in most corporate cultures, truly egregious credit stealing is harder. Not to say it never happens, just that people are generally slier about it.

Re: Why top firms fire good workers

#59
My experience with consulting firms is there are two paths for high performers. Either you move into a sales/relationship focused role (which there are fairly limited slots for) or you move client side and probably buy from your old employer. The good workers do well either way (when I say move client side, I mean to high level positions - importantly one with control over a budget to afford consultants) and the consultancy makes money both ways.

Re: Why top firms fire good workers

#60

Every job I've ever had started great with a small team who was actually interested in the company and its goals. Then eventually the company scales up, gets acquired, or IPOs or some other sign of maturity and a new group of leadership is brought in from a legacy/Fortune 500 type of company. That new group of leadership brings their own cabal/clique and they only promote themselves and start slowly pushing out the o…

Are you sure you're not just seeing the transition of a company from a growth company to a value company? I.e. "there is no growth potential left. Let's dump it on the public", and then a new leadership team comes in slashing costs to juice profits, because there's no way to increase revenue. Because that's certainly a phenomenon as well.
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