Death by HR: The Simple Model of Project Labor

Death by HR

Death by HR

We need a simple model to inform our discussion of productivity and the effect of incompetent team members on performance when employment is based on hitting diversity targets rather than choosing the most productive.

Imagine a bucket brigade. Ten people who pass buckets down a line from one to the next, always succeeding in passing it along in one second, so one bucket per second is moved from one end to the other.

There are two types of worker: fast and slow. Fast workers can pass along one bucket per second, while slow workers take two seconds.

Suppose one worker on a bucket brigade ten is slow and takes two seconds; in that case, every person after them in the chain has to wait two seconds for the next bucket, and production is *halved* at one every two seconds. The chain can produce no more than its weakest link.

Recognizing this, the chain is reformed: the slow person is cut out, the rest reach a little extra, but can only pass a bucket every 1.1 seconds. Still, by leaving out the weakest link, production is increased from one every two seconds to one every 1.1 seconds, with everyone working a little harder. The slow worker is idle.

Now suppose there are five slow people. The fast five can’t reach far enough to move the buckets from one end to the other; the best they can do is form a team of eight, three slow and five fast, and production is decreased to one every two seconds. The fast people, reaching a bit further, can produce at one per 1.3 seconds, while still limited by the slow to one per 2 seconds speed. Two slow workers do nothing.

But then: the brigade leader realizes the fast five can move at 1.3 per second then split the buckets between two lines of two slow people each, alternating. This allows the fast people to work at their higher speed of one per 1.3 seconds, passing the bucket alternately to each slow line. Not limited by the slow, total production is now one per 1.3 seconds.

Now imagine hundreds of bucket brigades. Each brigade leader is tasked with recruiting and paying the team members, then taking payment for the buckets moved (Production) and disbursing it to team members at the agreed-to rate of pay.

For simplicity, we’ll assume the payment for each bucket delivered is the same, $0.05. The resulting model starts to look like firms in a competitive industry. The talent pool is continuously refreshed with new people with no performance record; some of them are strong and coordinated even at first, while others learn over time to move faster and more surely. Some will always be slower, or unable to focus on the task, or lack coordination. The brigade leader is Management: the job is to decide what work to do, how to do it, and with what workers.

Brigade leaders have a variety of strategies to choose from. The obvious strategy is to go after those workers who have demonstrated how productive they are previously, and offer them higher pay. A brigade with all fast members will move the full one bucket per second, or 28,800 per eight-hour day. At the end of the day, the brigade leader collects $0.05 per bucket, or $1,440, and if each worker is paid the same, they can be paid $140 each, enough for food, shelter, and clothing in our simple model’s factory town. (We’ll assume our brigade leader also works the brigade line for now, and collects a little off the top for the extra job of managing it.)

But another brigade leader tries to fill her crew with the best workers and discovers only a few are available. She decides on a different strategy: hire some cheaper and slower workers and hire more of them, then use her organizational skill to set up the line to produce as much as possible with the workers she has. She is able to hire five fast workers for the competitive $140/day salary, but then hires four slower workers at $80 a day each, so her payroll is 700+320=$1,020 a day, and by using her fast workers in a single line then having her slow workers split into two lines which alternate handling the buckets coming from the fast line, production is slower than the all-fast team at 1.3 seconds per bucket moved versus the fast team’s 1 second per bucket moved, so in an eight-hour day her team can produce only 22,154 buckets vs the fast team’s 28,800, and they are paid only $1107.70 for their output. But that’s more than she’s offered to pay her workers—so she can collect an additional profit and put to use workers who would otherwise be shunned as slow. Those workers, true, are paid less—and perhaps they have to live near the railroad tracks in smaller, cheaper rooms and eat less expensive meals—but they have work which keeps them fed and healthy, and companionship as they work, and the opportunity to get better with time and practice so that their pay can be raised.

This simple model shows how important it is to be able to pay workers in accordance with their productivity in any business, and how management can reorganize the flow of work to use those who are less productive.

This model also has the feature of the real-world job market requiring each worker to prove their worth before commanding their fair salary. A new worker with no experience will tend to get paid much less than even the slow workers, then rise in pay to the level commensurate with their productivity as it is recognized and becomes common knowledge; a brigade leader (manager) who fails to raise that worker’s pay will find that worker has been hired away by another brigade at a higher rate. And those workers who slowly get more productive will eventually find their new skills recognized in pay, or also be hired away.

Now suppose the town’s mayor comes by and discovers some of the workers are paid less for the “same” job of moving a bucket from one hand to the other. The mayor has been watching MSNBC, and reading Marx, and finds this intolerably unequal—so he returns to Town Hall and has the Town Council pass a law fixing a minimum wage of $120/day. They believe workers will thereby have more money to spend and the town will boom as all these new dollars are spent.

The result is different. All of the strategies managers have used to organize their teams to use less-productive workers are defeated—the only way a brigade can make it is if every worker is fast. All of the slower workers are let go, and teams scramble to reform with only fast workers. Since there aren’t enough fast workers to go around, there are fewer brigades, and the town’s total production falls. Even some brigade leaders are out of work, and none of the remaining brigade leaders will take a chance on a new worker who might cripple their production. The brigades that remain are doing well, and perhaps a shortage of the product even increases its price and thus the profits of the brigade leaders/owners, which allows an increase in the remaining workers’ $140 pay to $150.

But the town is full of unemployed workers, and they demand relief from the Town Hall, who already took responsibility for their welfare by ruling low pay illegal. Retail businesses are suffering as the total spending of the town’s workers falls. More shop workers and owners also find themselves unemployed.

We’ll end our parable here, before the mayor announces a new job retraining program or decides to attract a major-league sports team by borrowing money to build a new stadium.

Most work is vastly more complicated than a bucket brigade, and it is generally more difficult to tell which workers are the most productive when you look at more abstract products like software or engineering design. If a key role in a modern software team is occupied by a less competent worker, that software will not only be produced more slowly, it may never see the market at all. Managers often can’t tell whose failures are damaging a team’s work output until it is too late, and it is far harder to tell whether a new hire is going to be a valuable addition, or a regrettable mistake.

Software is a special case where some programmers are hundreds of times more productive than others, and some are actually negative producers—bottlenecking their teams, derailing meetings, and demanding management attention while making other team members less productive. Fred Brooks wrote The Mythical Man-Month about the mistaken belief of managers that a programming project could be sped up or rescued by adding more programmers. He came up with Brooks’ Law: “Adding manpower to a late software project makes it later.”

The highest-quality programming projects are generally designed and prototyped by a single visionary or a very small team, and as more programmers are added, the clarity of design and implementation are lost and the code balloons in volume and is more prone to errors. When the programmers are mediocre and there are many of them, as in most government-contracted software projects, the entire effort may collapse and be scrapped after millions (or billions — see the examples of catastrophic failure in [chapter number], including healthcare.gov) of tax dollars have been spent. This is just the most extreme consequence of bureaucratic project management which views employees as equivalent cogs; in many other fields, the consequence of mediocre team members is low productivity, poor quality, and wasted effort, but the result may function well enough—for government work.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

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