This is a good way to destroy productivity and morale, but if that’s not your goal you need to expect your managers to earn their pay.
Laying off the bottom 5% presumes that you’re measuring that accurately and that individual workers have control over their productivity, both of which are unlikely to be true - and if you get either wrong, you just incentivized playing political games and shying away from work which is hard, uncertain, or under-weighted by your metrics. Stack ranking almost destroyed the ability of Microsoft and Google to make anything people love, and you can see its cost in the unperformed maintenance work people know won’t juice their metrics.
Similarly, if people are leaving because you have too much work, poor working conditions, don't pay well enough, etc. capping rehiring is just going to make the situation worse.
If you’re not a PE guy looking to juice a company before dumping it, cost cutting has to be a process of understanding and identifying your true goals first. If you’ve truly over-hired, the first lesson to draw is that you have a management problem which you need to deal with first since it will make everything else likely to fail as well.
This is false. It's a great way to INCREASE productivity and morale. Good workers HATE working with lazy, dumb and inefficient workers. But constantly getting rid of the low performers and replacing them with better people, you are instilling confidence in the system.
If your entire org is filled with lazy low performers, then it doesn't matter if productivity and morale is destroyed, because they don't have high productivity or morale in the first place.
Again, the real world isn’t that simplistic. Look at the way that’s worked in the past, and remind yourself that all of those guys thought they were also smart and onto a brilliant move.
Laying off the bottom 5% presumes that you’re measuring that accurately and that individual workers have control over their productivity, both of which are unlikely to be true - and if you get either wrong, you just incentivized playing political games and shying away from work which is hard, uncertain, or under-weighted by your metrics. Stack ranking almost destroyed the ability of Microsoft and Google to make anything people love, and you can see its cost in the unperformed maintenance work people know won’t juice their metrics.
Similarly, if people are leaving because you have too much work, poor working conditions, don't pay well enough, etc. capping rehiring is just going to make the situation worse.
If you’re not a PE guy looking to juice a company before dumping it, cost cutting has to be a process of understanding and identifying your true goals first. If you’ve truly over-hired, the first lesson to draw is that you have a management problem which you need to deal with first since it will make everything else likely to fail as well.