The Great Self-Welching of 2022?

Bob Runs the Numbers, Episode 7

Jack Welch & the “Bottom 10%”

When he was CEO of GE, Jack Welch was famous for firing the “bottom 10%” of performers each year. (The theory is that filtering to keep the “top 90%” — especially as an organization iterates each year — keeps the average quality of the retained employees up.)

Indeed, MBAs worshipping at the Jack Welch altar are always eager to follow his lead and be quick with stack-ranking and pink slips (the infamous “rank-n-yank”).

To my eyes that’s always been a little hard-hearted.

And hard-heartedness aside, the 90% of the workforce who didn’t get fired is still aware that all it takes is one year — one year when you’re distracted by homefront issues, or one year when all your teammates perform extra well, or one year when your manager has got it in for you — and you end up on the chopping block.

It can be tough to work at your best when you’re working in fear. This is the unacknowledged price of following Welch’s guidance.

Anyway.

Covid & the “Least Collaborative 2%”

Companies that require covid vaccinations for employees will experience an interesting twist on Jack Welch’s theory. I’m imagining a roomful of bean-counting MBAs saying “let’s fire the least collaborative 2% of employees” but instead of managers picking the sacrificial employees, the least cooperative co-workers will self-select their way out of a job, niftily letting the remaining 98% sidestep the sword of Damocles that’s the hazard of the traditional Welch formula.

I’m not saying this is all a good thing or a bad thing. (From the corporate management side: on the one hand, if companies could find ways to flexibly accommodate everyone while mitigating covid that’s great; on the other hand, business owners don’t want their employees to spread disease to customers. And nobody, management or labor, wants to share office space with Typhoid Mary.) But whatevs. Let’s focus on the silver lining that we’re getting a natural experiment here, and economists love natural experiments.

Self-Welching

In five years, or in two years, or in one year: will organizations that have fired vaccine refuseniks be more collaborative and healthy since the remaining workers have been self-filtered to include better team players?

Will the Welch doctrine’s presumed productivity improvements carry over into workplace improvements once retention is biased towards more team-oriented people?

Will “self-Welching” antivaxxers end up improving their former organizations’ effectiveness?