GE's former CEO Jack Welch was famous for firing the bottom 10% of producers in his company every year. He believed this benefited the company because it encouraged better performance overall, and rooted out the incompetent who still couldn't perform, even when they knew the consequences.
Conversely, Swedish communications company Ericsson once prided itself on never laying anyone off, even during the worst of financial times (though they did fire as necessary). The C-Suite considered taking care of their workers one of the company's core values. That core value went out the window after the dot-com bubble burst, stockholders began screaming, and they took a page from the playbook of their more practical competitors. The move sent shockwaves through Ericcson's corporate culture, and many felt betrayed when they got their layoff notices.
Sometimes you do what's necessary to survive, no matter how distasteful. Even now, as the economy is supposedly stabilizing, layoffs still happen on a regular basis in most industries--when companies that were perhaps too optimistic in the good times have to contract in order to survive.
A Modest Proposal
Yes, poor performers should worry about keeping their jobs for obvious reasons. But human beings aren't "deadwood" to dispose of, as you'd prune a tree's branches to urge it to grow properly. Let's be direct and not use euphemisms like "downsizing" or "rightsizing" in reference to employment. Firing people in the lean times may be necessary in the short run, but it can also be self-defeating in the long term.
Instead, ruthlessly find (or create) ways to increase the productivity of your workforce as it currently exists. How about working to grow the company? How about clearing clogged work processes, so things move along more effectively? If you must draw down the company population, urge people to retire early or simply let attrition take its toll.
Most people aren't deadwood, but bloated processes, bad choices, failing initiatives, and excessive bureaucracy are. If your company's suffering, clear those out first--before you damage yourself by depriving yourself of the talent that built your company in the first place. Even those you don't fire will most likely be impacted, their engagement reduced from the disenchantment from what they once thought was a company where loyalty mattered in both directions.
© 2014 Laura Stack. Laura Stack, MBA, is America's Premier Expert in Productivity™. For over 20 years, Laura has worked with business leaders to execute more efficiently, boost performance, and accelerate results in the workplace. Her company, The Productivity Pro, Inc., provides productivity workshops around the globe to help attendees achieve Maximum Results in Minimum Time®. Laura is the bestselling author of six books, with over 20 foreign editions, published by Random House, Wiley, and Berrett-Koehler, including her newest work, Execution IS the Strategy (March 2014). Widely regarded as one of the leading experts in the field of performance and workplace issues, Laura has been featured on the CBS Early Show, CNN, the Wall Street Journal, and the New York Times. Connect via her website, Facebook, or Twitter.