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Rapid Hiring & Firing to Build the Best Teams

108 replies on 8 pages. Most recent reply: Apr 10, 2010 9:52 AM by Aye Thu

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Andrew McVeigh

Posts: 29
Nickname: 55548
Registered: May, 2008

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 7:06 AM
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> yes, as in "why expect A when you reward B".

reference to a great paper on the psychology:
http://www.sba.oakland.edu/Faculty/york/Readings434/Readings/On%20the%20folly.pdf

John Wellbelove

Posts: 72
Nickname: garibaldi
Registered: Mar, 2008

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 7:27 AM
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> yes, as in "why expect A when you reward B".

NHS health trusts in the UK were given a set of performance targets, as an attempt to improve patient care. One of them was the average waiting time for a bed. The shorter the average time patients had to wait, the better the score.
Only later it was found out that some hospitals were sending people home before they were ready, just to free up beds and get a good score in the league tables. Some patients were even discharged and then re-admitted immediately because it scored better than leaving them where they were!

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 7:55 AM
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> > yes, as in "why expect A when you reward B".
>
> NHS health trusts in the UK were given a set of
> performance targets, as an attempt to improve patient
> care. One of them was the average waiting time for a bed.
> The shorter the average time patients had to wait, the
> better the score.
> Only later it was found out that some hospitals were
> sending people home before they were ready, just to free
> up beds and get a good score in the league tables. Some
> patients were even discharged and then re-admitted
> immediately because it scored better than leaving them
> where they were!

Compensation schemes is one of the main sub-topics of game theory. It's pretty interesting stuff and helps make the dangers of poorly design schemes apparent.

Andrew McVeigh

Posts: 29
Nickname: 55548
Registered: May, 2008

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 8:14 AM
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> NHS health trusts in the UK were given a set of
> performance targets, as an attempt to improve patient
> care. One of them was the average waiting time for a bed.
> The shorter the average time patients had to wait, the
> better the score.
> Only later it was found out that some hospitals were
> sending people home before they were ready, just to free
> up beds and get a good score in the league tables. Some
> patients were even discharged and then re-admitted
> immediately because it scored better than leaving them
> where they were!

the (new) classic example of this in the NHS is the Mid Staffordshire trust currently in the news. During the period of the deaths, from the article:

"The trust had been climbing the NHS ratings ladder during the period in question and was even given elite foundation trust status."

http://news.bbc.co.uk/1/hi/health/8531441.stm

We also experienced this regarding the Kent and Sussex NHS trust, near where I live...

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 9:02 AM
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> Compensation schemes is one of the main sub-topics of game
> theory. It's pretty interesting stuff and helps make the
> dangers of poorly design schemes apparent.

My last position involved developing an application used by insurance companies to manage compensation for the pyramid scheme. The point was to allow each client to install as complex and obtuse plans as possible. The original codebase goes back to the late 1970's!! In the last few years, the "thought leaders" in such gameable (sp?) structures are now stepping back, officially. Simpler, transparent plans are now being promoted as best for all. The "thought leaders" are proclaiming to have discovered what is obvious: the more complicated compensation, the more gameable and expensive to administer.

The gyrations these plans went through go a long way to explaining why it is that so much of an insurance company's revenue (and investment banksters for the same reason) goes to "compensation".

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Feb 25, 2010 9:30 AM
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> In the last few years, the "thought leaders" in such
> gameable (sp?) structures are now stepping back, officially.
> Simpler, transparent plans are now being promoted as best
> for all. The "thought leaders" are proclaiming to have
> discovered what is obvious: the more complicated
> compensation, the more gameable and expensive to
> administer.

One of the core assumptions in game theory about compensation schemes is that the parties involved (especially those receiving the compensation) understand the rules correctly. That seems pretty intuitive to me. When I see things that make no sense like that or hear of them, I always wonder how we got there. It would be really useful to understand that.

Any True

Posts: 4
Nickname: anytrue
Registered: Mar, 2010

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 2, 2010 12:19 PM
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To be honest to your employees, they should be able to rapid firing the founders and owners of that company. With this agreement, it is not a bad idea.

Stephen Graham

Posts: 5
Nickname: sgraham
Registered: Jan, 2006

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 8, 2010 9:08 PM
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I worked for a company like this and and resigned. In my experience this approach to hiring and firing is an attempt to excuse the absence of management skills. I'd never work for a company like that again because they're miserable places that have no clear delegation of responsibility or proper resourcing let alone any professional development or adherence to best practice. The company I worked for had around 80 developers, and not one of the managers I ever worked with their had the slightest clue about how to manage people - they were incompetent. However, they think they're great and do manage to hire some good people although they usually don't stay long.

Paul English

Posts: 23
Nickname: kayakcto
Registered: Feb, 2010

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 11, 2010 12:00 PM
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by revenue per employee, i simply mean total company revenue per year divided by the total number of employees

at kayak, we strive to have a very high revenue per employee; it is currently well in excess of a million dollars per employee (we're currently a privately-held company and we don't yet release actual numbers)

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 11, 2010 5:40 PM
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> it is currently well in excess of a million
> dollars per employee (we're currently a privately-held
> company and we don't yet release actual numbers)

Is it fair to surmise that the distribution is highly skew, as in the bonuses of Wall Street Banksters?? :)

Paul English

Posts: 23
Nickname: kayakcto
Registered: Feb, 2010

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 16, 2010 5:56 PM
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i think you are confusing compensation (to each employee) with revenue (for the company)?

i was talking about revenue per employee as a gauge to see if our company is efficient

if you are asking about compensation --

1) top performers should and do get paid more than the average performer

2) we generally pay at or above industry standard

--pme

Stephen Graham

Posts: 5
Nickname: sgraham
Registered: Jan, 2006

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 16, 2010 6:12 PM
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> 1) top performers should and do get paid more than the
> average performer

"average performer"! Oh my! Why pay them at all, don't you fire them for being average? :-)

Cheers,
Stephen.

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 16, 2010 6:54 PM
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> i think you are confusing compensation (to each employee)
> with revenue (for the company)?

No, in fact, I wasn't. The revenue for companies such as kayak are not capital intensive, return on real capital, based. They are service based, which is to say billable hours to clients. Ultimately. Whether the company is doing so on direct contracts, or for "inventory" (building an application "for sale" in the future), revenue is attributable to exercise of labor, not extracting value from purchased/built real capital (what economists call plant and equipment). The notion of "intellectual capital" is specious, in any case. So, kayak's, and similar, revenue is traceable to individuals. But, if one compares superstar payments in, say, basketball to journeyman, the payments are way out of whack based on actual production. The justification there is "bottoms in the seats". So the surmise remains (I'm only askin' not expecting an answer), is it the case that average revenue, net of direct expenses, gets disbursed based on objective metrics of production? Or do "managers" and "rain makers" scoop up most of the million? I'm not implying that doing so is necessarily wrong, only that the facade of equity is, in my experience, just that. kayak is not unique; consulting companies have been run that way for decades.


>
> i was talking about revenue per employee as a gauge to see
> if our company is efficient

relative to what?


>
> if you are asking about compensation --
>
> 1) top performers should and do get paid more than the
> average performer
>
> 2) we generally pay at or above industry standard
>
> --pme

Paul English

Posts: 23
Nickname: kayakcto
Registered: Feb, 2010

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 20, 2010 6:04 AM
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There are individual contributors who are paid more than some VPs.

People are free to leave KAYAK for any other company anytime they choose. In six years, only one star has left, having been recruited to take on a CEO position of another company.

Revenue per employee is a good way to measure efficiency. We measure ourselves against other top tech companies.

Mika Salmensuu

Posts: 6
Nickname: mikas
Registered: Feb, 2010

Re: Rapid Hiring & Firing to Build the Best Teams Posted: Mar 23, 2010 5:28 AM
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Hello Paul,


>People are free to leave KAYAK for any other company
>anytime they choose.
> In six years, only one star has left,
>having been recruited to take on a CEO position of another
>company.

Most of the people at KAYAK do not have the chance to leave when they choose because they are fired before that. This is simple at that.


>Revenue per employee is a good way to measure efficiency.

Ok. But how to you measure the revenue per employee? Is the lines of code written?

Do you include yourself here or any manager?

> We measure ourselves against other top tech companies.

Everybody does this but the point is what yard-stick you use for measuring.

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