Few things damn a company and its spirit as thoroughly as to have its managers say: You canâ€™t get rich here but you wonâ€™t get fired, this puts the emphasis on safe mediocrity. It breeds bureaucrats and penalizes what every business needs the most: entrepreneurs. It does not even as often believed encourage people to risk making a mistake; it discourages them altogether from trying anything new. It does not build spirit, only high performance can do that. Indeed, it does not even create a feeling of security. The security a management group needs is one grounded in the consciousness of high performance and its recognition.
The first requirement of management spirit, then, is a high demand on performance. Managers should not be driven but they should drive themselves. Indeed one of the major reasons for demanding that management be by objectives and that it be founded in the objective requirement of the job is the need to have managers set high standards of performance for themselves.
Consistently poor or mediocre performance cannot be condoned, let alone rewarded. The manager who sets his goals low, or who consistently fails in performance, must not be allowed to remain in his job. He must be removed and moved to a lower job or dismissed rather than â€œkicked upstairsâ€.
This does not mean that people should be penalized for making mistakes. Nobody learns except by making mistakes. The better a man is the more mistakes will he make for the more new things he will try. A good management never considers promoting a man into a top-level job who has not achieved his major performance objectives. Otherwise he is sure to be mediocre. Worse still, not having performed and claims not making any mistakes he will be complacent and not have learned how to spot them early and how to correct them.
That a man who consistently renders poor or mediocre performance should be removed from his job also does not mean that a company should ruthlessly fire people right and left. Management has a strong moral obligation to a man who has served the company long and faithfully. It also, like every other decisions making body is committed by its own mistakes. If it makes in promoting a man, it should not fire him because his subsequent performance that he should never have been given the promotion. It may not be the fault of the man alone that he performs badly; the requirements of the job may have grown beyond his capacity over the years. Not so long ago the comptroller, for instance was considered in many companies to be not much more than a senior book keeper. Today management is apt to look upon comptrollership as major policy making function. A comptroller perfectly adequate to the job ten years ago may well be incompetent to perform under the new concept of his function. He alone cannot be blamed because the rules of the game have been switched on him.
Whenever a manâ€™s failure can clearly be traced to managementâ€™s mistakes, he has to be kept on the payroll. But people who fail to perform must be removed from their present jobs. Management owes this to the enterprises. It owes this to the enterprise. It owes it to spirit of the management group, especially to those who perform well. It owes it to man himself, for he is likely to be the major victim of his own inadequacy. This decision has to be taken whenever objective performance makes it necessary regardless of the personal circumstances.
Whether the man should stay n the companyâ€™s employment however is a different matter. While the policy governing the first decision should be strict, the policy governing the second should be considerate and lenient. Strict insistence on standards builds spirit and performance. But decisions on a person demand the greatest consideration for the individual.
One good illustration is the Ford Motor Company. When Henry Ford II took over, none of the nine management people in one department was found to be competent to take on the new jobs created in the course or reorganization. Not one was appointed to these new jobs. Yet, for all the men, jobs as techniques and experts were found within the organization, jobs which they could be expected to perform. It would have been easy to fire most of them. Their incompetence as managers was undisputed management coming especially under such extraordinary conditions is considered entitled to make pretty drastic personnel changes. Yet, the new Ford management took the line that while no one should be allowed to hold a job without giving superior performance; no one should b penalized for the mistakes of the previous regime. And to the strict observance of this rule the company owes to a considerable extent its rapid revival. Incidentally, seven of these men did indeed perform in their new jobs, one so well that he has been promoted into a bigger job than the one he originally held. Two men failed; one was pensioned off, one discharged.
It is fairly easy in practice to combine insistence on superior performance with consideration for the individual. A â€œreal jobâ€ not â€œmade workâ€ consonant with the personâ€™s capacities can almost always be found with effort and imagination. The frequent excuse: â€œWe canâ€™t move him he has been here too long to be firedâ€ is bad logic and rarely more than a weak-kneed alibi. It does harm to the performance of management people, to their spirit and to their respect for the company.