Hire to Fire
By Joseph Swerdzewski

I read an interesting article this week in an online publication called Inc.: Amazon’s Controversial ‘Hire to Fire’ Practice Reveals a Brutal Truth About Management. It’s an example of what can happen when your incentives aren’t aligned with your values. The article provides that “According to the reporting, managers at the online retailer intentionally hire people that they know they’re going to fire. They are expected to lose, either voluntarily or through termination, a specific number of employees every year. If you don’t, you’re expected to make up for it the following year. Managers are even evaluated using this metric, known as “unregretted attrition rate” (URA). Basically, it’s the number of people you wouldn’t be sad to see leave the company.”

It’s difficult to see this Hire to Fire practice catch on in the federal government. There are many reasons this would not become a prevalent process in the federal government. Among them is that, it is an incredibly drawn-out process in some agencies to hire someone in the first place. It takes a long time to go through the merit promotion progress. There is also the fear that if you lose an employee, you may not be able to refill the position. And if you do fire someone beyond their probationary period, it may be hard to fire them, especially if they are in a bargaining unit.

The interesting issue in the article to me was not so much Hire to Fire because as noted the possibility of managers in the federal government to be incentivized to Hire to Fire is very small to non-existent. But what spoke to me is the concept that what managers are incentivized to do they will find a way to accomplish. I recall when first entering the federal government meeting productivity goals were a major part of what we were to achieve. Getting cases done by the “end of the month” was a basic management mantra and as a manager was my mantra. I was judged on case numbers. Quality was also important but there was no question that numbers came first. What became interesting is how many cases we actually got out on the very last day of the month. Quality control on the investigations necessary to take action on a case was a given but never really assessed.

This experience taught me that incentives do work. It also taught me that it is important to look at what you are incentivizing. Most supervisors and managers are competitive people. Give them a goal and they will try to obtain it. The real question is what are the right goals. There has been a tremendous hue and cry over the years that not enough federal employees are fired each year and that it is too difficult to fire federal employees. Most managers don’t want to take the time and effort to fire a federal employee. Why waste the time when that’s not what they are judged on? It’s the work which wins them praise and bonuses not firing someone. Of course, firing employees in the federal sector would become easier if federal employees lost their due process rights and became at will employees. This approach would change the whole nature of the federal merit system.

The big question is what should be the goals and what incentives should be offered to reach those goals. It undoubtedly was not Amazon’s intention to create a hire to fire system. It came about as a way to achieve a goal it had established for its managers. Managing performance comes down to basically three goals: quality, quantity and timeliness. When goals are established which go beyond the basic three that is sometimes where trouble starts.

Hire to Fire had nothing to do with quality, quantity or timeliness. It was intended to meet another goal of the organization. Attrition was thought to be good because it provided the opportunity to hire better employees instead of just continuing mediocre or poor performers. If that goal was to weed out the poor performers its accomplished that. But hiring people who could be foreseen as poor performers was not the intention. Creating a system that resulted in hiring who you would expect to be poor performers defeated the purpose of having a well performing work force.

Goals can have unforeseen consequences. When a goal is established all consequences of the goal should be looked at. A quantity goal may produce big numbers but what impact does it have on quality, customer service or employee burnout. A quality goal may improve quality but may affect productivity. A quality goal without some type of benchmarks as to how quality is measured is not a quality goal at all. A timeliness goal without a consideration of staffing levels may be unattainable.

A consideration as how quality, quantity and timeliness fit together must be understood. Some managers might say they want it all. You have to meet all the goals. Some employees will be able to do that but a number may not. If the goals are unrealistic is there a mechanism to rebalance achieving them.

As example, a goal on levels of attrition has certain merit but when it results in hiring unqualified people just for the purpose of being able to easily fire them has a significant impact not just on the people fired but also on the employees left behind wondering when they will be let go. Because there are specific attrition targets a manager may have to fire otherwise good employees to be able to meet the target.

Goals for employees are useful and important but they must not be set in a vacuum. Wanting everything all the time is fine but does it make sense with relation to all the things employees must accomplish. Don’t establish a goal that leads to your own hire to fire outcome.