Bryan Caplan  

Firing Aversion: A Human Resources Perspective

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In Praise of Calibration... Tribute to an Audience...
Yesterday I presented my case against education to GMU's Osher Lifetime Learning Institute.  As usual, the experience was a true merit good: picture a packed room of retirees full of enthusiasm and curiosity for the life of the mind.  The feedback is excellent, too.  When these students analyze new ideas, they draw upon a lifetime of experience and insight.

Case in point: During my talk, I discussed the reality of firing aversion.  As it turns out, one of my students used to work in human resources.  In her experience, one of the main reasons why employers don't fire incompetent workers is that it's embarrassing for whoever hired them.  That would be an admission of error - and people in authority don't like admitting error.  Such denial is clearly expensive; covering for a bad worker can be a full-time job.  But many managers are willing to pay the price.



COMMENTS (13 to date)
tim writes:

-Bad- managers feel embarrassed when they have to fire someone who didn't work out. Mistakes happen. And sometimes you take a risk that didn't pan out. You admit the error and move on. Its infinitely less expensive in the long run when you do that.

But the real enemy of firing people? Human Resources. Unless the individual was found nude snorting coke off the statue of the founder of the company in the lobby in the middle of the day - HR will find new and creative ways to keep people. I once had to keep someone on staff for two years because HR refused to remove him from the company. And this is a guy who would show up drunk at staff meetings on a weekly basis. I eventually rescheduled the staff meetings and left him off the list. He finally got walked out of the building when he insulted a VP.

nazgulnarsil writes:

tim:

Where do you work?

Are there any openings?

(I'm guessing government)

David R. Henderson writes:

@nazgulnarsil,
It can't be government. Notice that he insulted a VP. There's only one VP I know of in all of U.S. federal, state, and local govt.

ColoComment writes:

BTW, please note that it's impossible to fire someone who is in a protected category, no matter how incompetent he may be. Well, I take that back: you can fire him, but you'd better be prepared to expend time and financial resources responding to an EEOC claim of discrimination, groundless or not.

JGW writes:

Seems to be a lot of truth in this. It appears that two things are in play:

1. As Bryan writes, the behavioral phenomenon of avoiding mission of error is a major one. I'd say it's what perpetuates fights between couples and within families. On a more significant note, it's why we are seeing Bernanke and his commitment to QE and more of the same wrong policies.

2. @CocoComment alludes to the legal and financial burden. Analogous to red tape and crippling legal and financial burdens at a macro level stifling entrepreneurship and growth (one of the many things of course)?

mark writes:

The last time I interviewed internally I wasn't hired for the job. Truthfully, during the interview I wasn't sure if I wanted the job so it didn't bother me that much. The interesting thing about this is that I was far and away the low risk candidate. Frankly, if they didn't like me they could always suggest that I think about going back to my old department and if I was struggling and had an out I would have taken it. I found out later that the interviewer wanted to be blown away and that wasn't going to happen. I'm also pretty sure that attitude isn't the best one to have when filling a position but who knows. I do think some of these interviewers should start reading Moneyball or if their very bored Econlog.

JeffM writes:

Firing people is undoubtedly a very unpleasant experience personally. As was pointed out earlier, it is made much worse by highly risk averse HR and Legal departments. They are, however, not necessarily excessively risk averse. The notion of protected classes and the extreme disfavor with which juries look on firing employers means that every firing represents the potential for significant expenditures of money and internal resources. Experienced bosses have found ways to get rid of unacceptable employees with less bureaucratic hassle and almost no risk. I can remember at least three who said that if I did not do X for them, they would quit; the look when I promptly accepted their "resignations" was classic.

Glen Smith writes:

Of all the firing situations I've been part of, it is usually to the incompetence (and on one occasion, downright fraudulent) actions on the part of the one doing the firing (or their predecessor). I have only twice been witness to a firing where the employee was at fault.

MingoV writes:
... one of the main reasons why employers don't fire incompetent workers is that it's embarrassing for whoever hired them...
That's something I've never seen. In my experience, the incompetent worker who doesn't get fired is protected by a union or by nepotism.
andy weintraub writes:

I, too, teach in a LIfetime Learning Institute chapter at Bard College.
As a former professor of economics at Temple University for 25 years (and a one time colleague of Walter Williams when he was there) I can say that had my Temple students been as enthusiastic and curious as my LLI students, I'd not have resigned from teaching.

patrick writes:

@ Glen Smith - you are spot on here. While I have witnessed a few disturbing examples of low-performing employees avoiding dismissal, far more frequently I've seen terrible managers setting up employees for failure. Great managers get the most out of their people - or worst case, quickly diagnose a poor "fit" and find opportunities where "low performers" can thrive. Bad managers set up employees for failure.....and then blame the employee. I've seen this repeatedly, across all levels of manager seniority.

John Fembup writes:

I'm retired, and was a department head at three major corporations and an international not-for-profit during my working career. My model was Peter Drucker: the purpose of management is to arrange the work so as to take best advantage of peoples' strengths, and make their weaknesses irrelevant.

Still, it occasionally happens that, as another management guru Clint Eastwood recently stated, "when you're not doing the job, we got to let you go."

I agree that firing someone is unpleasant.

Yet, I often found that immediately after a firing, there was a definite "lift" among the remaining staff - and in me. Having a poor performer in the workplace drags everyone else down. Removing that drag is the source of the lift. (The obvious exception is a reduction in staff due to downsizing and not to personal performance - that's the toughest, on everyone especially the person(s) you must let go).

btw, I never heard of a firing at the not-for-profit at least while I was there. Its process for removing non-performers was so cumbersome it would have been laughed out of town in Byzantium.

Tracy W writes:

One of my cousins has a reputation at being able to persuade people out of their jobs and into ones with competitors. A win-win from the company's point of view, with no risk of being sued.

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