How would a #NoFirePolicy affect your company? An interview with NextJump CEO Charlie Kim who decided to do just that.

DM: Charlie, why did you make such an audacious promise?

CK: I always thought we were a company with a strong focus on people, and it was for that reason that I advocated “fast firing” — if you knew someone wasn’t working out, don’t prolong the agony. Allowing bad behavior to perpetuate is one of the worst things you can do for team performance.

DM: What made you change your mind?

CK: I was talking with Bob Chapman, CEO of Barry-Wehmiller at Massive, a gathering organized by Simon Sinek, and Bob challenged me on this point and asked me how I’d like my son to be fired by someone in the future. That floored me. Being fired is a highly traumatic emotional event. It’s the equivalent of being told “you are no good.”

DM: How did you announce the change?

CK: First, I did nothing for six months except think about it. We wargamed different scenarios and realized this policy would fundamentally affect everything we did. Every personnel hiring, training, and managing policy was reviewed.

Take hiring for example. Once you realize that you are entering into a lifelong relationship, hiring starts to look a lot more like adoption, or dating. Multiple interactions over some time are required before our team would get comfortable with a prospective hire. Every hiring manager started hiring more carefully, something I’d been advocating for but couldn’t make happen in every manager. Without further direction, they started treating hiring like adoption: once we take someone into our family, they’re here for life, when things don’t work, they’re responsible for training them, helping them.

Training also became much more comprehensive, touching subjects such as character, grit, and integrity in ways we had previously viewed as beyond the scope of company training.

DM: What happens when someone really just doesn’t work out?

CK: They choose to leave and we help them. I reassigned a person to a job position and told them their new job was to look for a new job. We continued to pay them, provide office space, access to company resources, and promised positive evaluations as appropriate.

DM: Have you seen any impacts?

CK: Almost immediately turnover went from 40% to 0%. Recruiters and other CEOs have told me that NxJumpers aren’t even taking their calls. The percentage of employees who said they “love,” not like, not tolerate, but LOVE their jobs went from 20% to 90%.

I told you about the formal deliberate changes we made to our training programs. There were powerful, self-organizing impacts as well. Peer counseling groups formed in every part of the company. Groups of 3 to 4 people meeting regularly to help each other grow, talk through hardships.

Probably the biggest impact was the effectiveness of performance evaluations. Development discussions were usually wrought with skepticism from the employee standpoint — are you really trying to help me or just documenting material to potentially fire me? Since getting fired wasn’t an option, everyone became more open to talk about their real problems. Performance evaluations became what it was always intented for – development discussions, open, honest and often real and raw conversations on what people are struggling with. Since people could voice real concerns at work, they left those toxins there and didn’t take them home with them. Home life improved as well.

DM: Can’t argue with that!

Thanks for talking with us today. We’ll be keen to see what you continue to learn from this.

Charlie Kim explains the NextJump wellness program, offering personal trainers to all employees.

Charlie Kim explains the NextJump wellness program, offering personal trainers to all employees.

 

Comments

  1. A little shift that’s making a BIG difference! Great stuff and thanks for sharing.

    • The content is very contradictive I am having a hard time to believe if this is actually happening. At one point it says that the turnover drops from 40% (that is SUPER high) to 0, but it also says that some people did ask to leave. Love of the job goes from 20% to 90%? To me it sounds like the company is full of incompetent people who were scared to get fired. Now that they are off the hook, they decide to stick around.

  2. This is something every CEO should see. Loyalty is a two way street and when given to employees they will respond in kind.

  3. Arlo Gilbert says:

    Good PR. Stupid concept.

  4. welcome to European style of employment

    may I call special attention to
    - job satisfaction to 90%
    - turnover to zero (even with reassignments to ‘your job is to search for a new job’)
    - efficiency of reviews, actually doing what they are supposed to?

    may I boldly infere a developing level of, actually, trust…?

    peer groups forming to help and train, not to throw before the bus?

    I am sure the effect on the bottom line is catastrophic ( in the sense of a sudden unexpected strong movement ), and especially corporate waste may go into astronomical numbers (10 to the minus whatever is a typical astronomical number….)

    would be so weird if there would actually a ‘sense of belonging’ coming out of this sick practice…

  5. Like Charlie in the early stages of being challenged, I am thinking this through and it will take a while.
    My initial reaction is that I’m uncomfortable with the permanence. In my mind, it’s like marriage with no prospect of divorce – even if things get abusive.

    I totally agree, as some of the earlier commenters stated, that loyalty works both ways. However, saying that you cannot be asked to leave your job if things change (for either the company or the individual) is, for me, a little screwy.

    Presumably the employee can quit?

    Firing hurts people and I also agree, but parting ways does not have to be about firing. It does not have to be emotionally violent. In my experience, most managers do not have the emotional intelligence to help people a) improve b) deal with parting.

    My heart says that NextJump’s approach is more human and I like it, my mind says that a lot of other adjustments need to be made to avert disaster. I’m glad that NextJump seem to have made many of thos adjustments.

    I loved this article and rate it 8/10. To get 10/10 (perfect) I would have liked to hear what new hires thought of the company’s policy. what those who may have left have to say and to understand some of the problems that inevitably occured along the way.

  6. “DM: What happens when someone really just doesn’t work out?

    CK: They choose to leave and we help them. I reassigned a person to a job position and told them their new job was to look for a new job. We continued to pay them, provide office space, access to company resources, and promised positive evaluations as appropriate.”

    A company I worked for had a similar policy of no firing. However, when they reassigned people they kept their old salary. This isn’t a problem if people then leave the company, however over 10 years this company has developed a significant number of free-riders who just keep getting reassigned every 6 months or so when they should have been fired years ago.

    This leads to situations where managers are in charge of underperformers who make significantly more than them, leading to constant manager and employee morale issues.

    The armed forces provide a better model, where if someone isn’t working out in a position they are reassigned. If that person did a bad job and made significant errors of omission then that person is reassigned at a lower rank.

    If you don’t assign a lower rank and lower pay then you just get a lot of underperformers who sit at the top of the organization.

    Another good model to look at is Valve and their horizontal organization with bonuses paid based on peer evaluations.

Trackbacks

  1. [...] and work-plans; when an employee is clearly a poor fit, instead of firing them, NextJump continues to employ them until the employee finds a new job. The reason for this approach is simple, according to Kim: firing hurts people. He [...]

  2. [...] How would a #NoFirePolicy affect your company? An interview with NextJump CEO Charlie Kim who decide…: [...]

  3. [...] You can read a great interview with Kim about this policy over at David Marquet’s blog but the gist of it is this: Once Next Jump hires you, they will not fire you. [...]

  4. [...] impact of implementing the no-fire policy was dramatic: the percentage of employees who said they love their jobs went to 90 from 20, and [...]

Speak Your Mind

*

Anti-Spam Quiz: