[Death by HR: How Affirmative Action Cripples Organizations]
The Tom Woods podcast on Death by HR is here, and on Youtube here.
On Tom Woods’ site, a commenter with a long career in HR had a number of criticisms of the interview, though he had not actually bothered to read the book — the HR version of “skim until offended,” jumping to conclusions about the content of the book and spending more time criticizing and reacting than looking deeper. But he had a lot of interesting things to say about his career, apparently working in mostly smaller and poorly-managed companies where managers frequently used their position to act arbitrarily based on ethnic, racial, or sexual prejudices, or put their own satisfaction ahead of company goals.
Perhaps if Tom Woods wants someone to evaluate the HR function from a libertarian or Austrian Economic perspective, he should actually talk to someone who has worked in the field? Next week, an exposé on the internal waste at NASA, the guest will be a jack hammer operator from Arkansas, who obviously has the inside scoop…
I’ve worked in HR and recruiting for over a decade now. Like any other department you’ll find in a company, it can be staffed with idiots or geniuses, but mostly it’s people who are somewhere in between. There are more than a few issues this guest brought up which are complete BS.
One, performance evaluations and legal risk. First, the legal risk for employers viz a viz their employees is next to zero in the US. With the exception of California, if you ask an actual labor lawyer if you can or should sue for X, Y, or Z, they will almost unanimously tell you that you can’t, or you can try but you won’t likely win. If you’re a member of a protected class, say a minority, and you have your boss on tape screaming racial epithets at you for hours on end before firing you, you might have a case. In this instance if they do have those performance evaluations they can use those to prove you were fired for legitimate reasons. And, unless you have a slam dunk case, no lawyer is going to take your suit on spec, so you’d better have a few grand to float as a retainer, and even if you win, the judgement won’t be as impressive as many assume.
So for all practical purposes most people wanting to take advantage of the few laws that actually do offer some form of legal protectionism to labor in the US are &^% out of luck. Generally speaking, the answer lawyers will give you is yes, you can be fired for that, or like that, or abused or even physically assaulted at work (I’ve seen it happen multiple times), and you generally won’t have luck suing, unless you’re in California which has laws which diverge significantly from the rest of the US.
In the above case the performance evaluation does serve the purpose the guest was mentioning, however in over a decade of experience I’ve seen them save more jobs than justify terminations. My favorite example was an employee who was moved through the process of disciplinary action to the point of being fired, the company at that time kept HR out of the process as much as possible, until the end where we came in to make sure everything was kosher. The employee was a woman with a very hard to find skillset at that point, because we were a manufacturer and there was little to no manufacturing left in our area. What was all the fuss about? It turns out the manager didn’t like the way she was opening, positioning, and sizing her email windows on her computer while she was doing her job. He had a process, ya’ see, and it involved micromanaging the movements of her frigging mouse. Her actual performance</i.>alsotolerate working for and with this moron.
That is one example of a multitude I could lay out, which addresses another claim of this guest: managers know what they’re doing, and how to evaluate and reward their employees. After ten plus years of experience, to say I beg to differ is to put it mildly. In fact, that’s one of the most riduclously detatched from reality statements I’ve heard in my entire life. Most managers are just regular employees who were promoted. No one ever checked to see if they wanted to be managers, and often when they did want to be, it was because they didn’t see any other career progression, and so assumed they had to be managers. No one ever checked to see if they had any aptitude for the position, either. They were just the best at their job in someone’s estimation, and God only knows if that person had any particular skill in managing people, and that person clapped them on the shoulder one day and said, “Congrats, kid, you’re in charge now, so good luck!” Rarely if ever is any training even offered to these people, check corporate training budgets. They’ve gone through the floor over recent years. In my entire career I’ve met three or four managers who actually had a clue what they were doing, and I’ve worked with hundreds at this point, maybe over a thousand; directly for a few and with many more as an HR and recruiting person.
In my years of experience the biggest problem I’ve had to deal with in HR and recruiting is not government compliance, which is an annoyance and yes, sometimes a big one, but rarely more than that. Nor has it been enforcing ‘diversity’ hiring, most small to medium sized companies couldn’t care less. No, the biggest issue has been managers running off the reservation and doing stupid things, or refusing to do their jobs. My favorite example in this regard was a manager who demanded to only hire Mexicans because they were better performers. They weren’t, actually. This guy’s top performers were all of Indian desent, with the top half of his performers not showing any particular trend in ethnicity. However, Mexicans it turned out were less apt to question him, and treated him like a god on earth. So, should HR not have stepped in and told this idiot he had to hire for actual performance reasons? Should we have let him sink the company with potentially worse overall performance and also potential legal risks just to stroke his ego? Again, one story like this of a multitude, one of the other prominent ones involves an IT department manager who would only hire Romanians. To his credit his department at least functioned well, but it drove the costs of hiring up because we had to cycle through tons of qualified people before we found someone for him to interview who had the right ancestry.
Or how about a company owner who refused to offer flexible schedules? Great one that, because a manager that was also a close personal friend of his offered it to his employees anyway. That department’s performance went way up, their absenteeism went way down, their retention was up, every single positive indicator was up. The owner finally admitted to the head of HR, who had been pushing for this policy, that he made a mistake. Plans were made to roll it out company wide, at the last minute the owner walked into a meeting and started screaming at people at the top of his lungs about how he wasn’t going to ‘give anything away’ to his employees just because he could. The plans were scrapped. There’s the overly managed and controlled market people deal with every day, a business own deliberately doing something to lower his company’s potential productivity because there are so many people desperate for jobs, why not? You can just throw away the burned out ones and replace them for the most part, it’s only in demand skills that require any ‘special’ attention, and by ‘special’ I mean not treating them like emulsified balls of ferrett crap.
HR can seem like a fiefdom sometimes. We do have to exclude people and keep secretive to a degree. Unless of course, you want your personal information sprayed all over the office for everyone to see. We have to deal with everything from deaths in people’s families to people with diseases or conditions who want to work, and do so quite well, but might need an accomodation here or there, and might not want the entire office to know their business. All manner of personal business which people want kept confidential, for all kinds of reasons, which might affect the business and how we do things but which, generally speaking, not everyone has a right to know if we can keep it confidential. So we do. It’s a fiefdom because too many managers are apt to screw it up if they get involved.
In all my years of experience, when managers wanted to do stupid things, it was HR who stood in their way. When managers and business owners were assured that working for them was a privilege and people should consider themselves lucky to be there, it was HR who stepped in and told them they still had to pay attention to compensation levels and work-life balance, and that those things mattered if they didn’t want to burn through their entire available candidate pool in less than a year, no matter how much of a ‘privilege’ it was to work there.
Over the decades in the US every possible job-killing protectionist racket has been tried, and the currency has been continuously debased. Those policies concurrently destroy competing job opportunities and devalue wages, keeping labor’s share of the expanding pie always lagging those of firm’s owners and financiers. Go ask Sean Corrigan, he pointed out as much in one of his Mises talks a long time ago. While that’s happening, HR does deal with a bit of government BS and compliance. But our main role is, in my experience and ironically enough, to try and stop companies from destroying themselves from within with idiotic and destructive policies towards their labor simply because they think they can treat people like crap because labor has been at a near permanent disadvatage thanks to over a century of idiotic policies and currency manipulation. This is increasingly hard to do in an economy where many companies would prefer some form of indentured servitude on a managed market where their competition is strictly limited, rather than to compete for free labor on an actual free market, because they’ve never known anything else. They wouldn’t know a free market if it bit them on the ass and called them daddy. And HR, whether you like them or not, is usually the department standing between the employees and the employer, constantly reminding the latter that to treat the former with at least a modicum of respect is just good business sense. Not everyone is lucky like me, to work for a company where the employer actually seems to care about its employees. Most work for people who would happily throw their employees’ children into a woodchipper if it meant a .000000000000001% increase in quarterly profits.
Maybe next time Tom Woods wants to talk about HR, he can talk to someone who actually works in… HR. I’d recommend Liz Ryan or Peter Capelli. Both are recognized in the field, I have no idea of their political or economic leanings though I get the feeling they’re both lefties. But they’ve at least worked and published in the field, which is a massive leg up on this guest. Lazlo Bock over at Google is another person worth talking with, or Dr. John Sullivan, who writes regularly for Ere Media. It’s not like there’s a shortage of people in the industry, God only knows why Woods decided to talk to some random guy who had a bad experience getting a mortgage once and decided to write a book. Having worked with many people who saw HR as some sort of obstacle, I can say unequivocally that sometimes they were right, but way more often than not HR was just the obstacle to them enacting their own stupidity at the expense of the company and people’s livelihoods. That’s an obstacle I’m happy to count myself among.
I hope you get time to actually read my book. In a short interview there’s not enough time for nuance or depth. I consulted many sources and quite a number of HR managers, but more importantly mid-level managers who only see HR staff when there’s trouble. And most of my sources are in engineering and technology, so the high quality of both employees and managers make HR less helpful and more culturally unlike the general staff. I did make a point of acknowledging the many hardworking HR people who put out the fires and work hard to promote the business.
But since my book is a polemic – intended to be a corrective for the hundreds of other books cheerleading for current HR fads and elevating the importance of HR for an audience of HR specialists who of course want to promote their own specialty above others – it focuses on the negative and the worst excesses of HR staff less competent that you say you were.
Every bureaucrat thinks they work hard to hold back the tides of chaos. You probably worked very hard, and of course you were called in when some manager had screwed up, so your dim view of managers generally is understandable. Your view that low and mid-level managers are accidents waiting to happen and only enlightened guidance from the likes of you kept them from disaster is just a tad skewed. What business is foolishly promoting people with no emotional intelligence, manners, or good business sense into management? What industry did you work in that had such incompetent and insensitive managers?
One, performance evaluations and legal risk. First, the legal risk for employers viz a viz their employees is next to zero in the US. With the exception of California, if you ask an actual labor lawyer if you can or should sue for X, Y, or Z, they will almost unanimously tell you that you can’t…
Most of my sources – and most of the technology industry, which was one of the focuses of the book – are in California, specifically Silicon Valley, and if you had actually read it you would have seen cases and excerpts from attorneys involved in litigation, defending against state regulators and class action attorneys suing under California’s antiquated labor laws specifying things like break times, proper seating, and temperature for workplaces long since evolved away from factories.
It’s true that most lawsuits of alleged discriminatory firing don’t go far, but the threat is only manageable because companies have taken defensive action by staying aware of the possibility and starting a documentation trail of poor performance a year or more before the intended firing. Costly settlements still happen (quietly, of course) to avoid legal and reputational costs.
In my entire career I’ve met three or four managers who actually had a clue what they were doing, and I’ve worked with hundreds at this point, maybe over a thousand; directly for a few and with many more as an HR and recruiting person.
In the companies I’m familiar with, new managers get guidance from their own managers and those who don’t show some decent understanding of their role do not progress further. Since you are steeped in HR, you think “training” is the answer – like any quasi-government bureaucrat, you think a program and a certain number of hours in a classroom is needed to impart the common sense and emotional skills to manage diverse people to get a job done. And you resent that no one has given HR budget to set up training programs and pull skilled people away for days of nonproductive paid time to be enlightened by HR staff and their favorite contractors.
My favorite example in this regard was a manager who demanded to only hire Mexicans because they were better performers. They weren’t, actually. This guy’s top performers were all of Indian descent, with the top half of his performers not showing any particular trend in ethnicity. However, Mexicans it turned out were less apt to question him, and treated him like a god on earth. So, should HR not have stepped in and told this idiot he had to hire for actual performance reasons?
This manager should have been fired – and in any well-managed company with smart employees, he wouldn’t have lasted five minutes. The companies I know of would have had peer managers and upper managers detecting his incompetence and he would never have been put in a management role (or even employed.)
…. Again, one story like this of a multitude, one of the other prominent ones involves an IT department manager who would only hire Romanians. To his credit his department at least functioned well, but it drove the costs of hiring up because we had to cycle through tons of qualified people before we found someone for him to interview who had the right ancestry.
So you cooperated in his violation of the equal employment laws? Interesting.
And HR, whether you like them or not, is usually the department standing between the employees and the employer, constantly reminding the latter that to treat the former with at least a modicum of respect is just good business sense. Not everyone is lucky like me, to work for a company where the employer actually seems to care about its employees. Most work for people who would happily throw their employees’ children into a woodchipper if it meant a .000000000000001% increase in quarterly profits.
So you’re a free-market guy, but think company owners, CEOs, and managers are all incompetent, don’t realize a high-quality, happy workforce is a competitive advantage that can make the company succeed and grow, and only you and HR departments everywhere keep them from destroying their companies by turning them into grim, despotic labor camps?
Well, first, companies that keep their HR departments from falling into that kind of condescending attitude by cultivating managers who are competent enough to rarely need your help – so HR is kept small and focused on helping managers – are better places to work and more productive.
Maybe next time Tom Woods wants to talk about HR, he can talk to someone who actually works in… HR. Id recommend Liz Ryan or Peter Capelli. Both are recognized in the field, I have no idea of their political or economic leanings though I get the feeling they’re both lefties. But they’ve at least worked and published in the field, which is a massive leg up on this guest. Lazlo Bock over at Google is another person worth talking with, or Dr. John Sullivan, who writes regularly for Ere Media.
You do realize that no one who is a careerist in the field would ever dare tell people that the Emperor of HR is naked. I think I quoted all of the people you mention somewhere in the book, and Bock in particular has done good work getting Google away from their academic, credentialist early employment prejudices to get really productive people. But none of them are going to look at HR with a critical eye and admit that most HR departments in many companies are doing as much harm as good, especially under the new atmosphere of political correctness (which I gather didn’t affect your work, but is an increasing problem in Silicon Valley.)
I’ll leave you with some mainstream critiques made recently. I’d hope you would actually read my book and come away a little more respectful of what I’m trying to do.
Medieval Recruiter Jeb Kinnison
“And most of my sources are in engineering and technology, so the high quality of both employees and managers make HR less helpful and more culturally unlike the general staff. ”
Do you have any actual evidence in your book as to the ‘high quality’ of these people? Do you have side by side comparisons showing them achieving better productivity and retention rates, or did you just take their word for it? Far be it from me to suggest you need to do more than talk to a few people in a couple narrow sectors who are mostly located in the most highly regulated state in the entire union that is notorious for its complex labor laws before you generalize to the entire profession.
“In the companies I’m familiar with, new managers get guidance from their own managers and those who don’t show some decent understanding of their role do not progress further. Since you are steeped in HR, you think “training” is the answer – like any quasi-government bureaucrat, you think a program and a certain number of hours in a classroom is needed to impart the common sense and emotional skills to manage diverse people to get a job done. ”
Your derisive attitude toward training is indicative of why your book is likely not worth reading. Again, far be it from me to suggest that simply assuming someone’s expertise in an area and not bothering to at least bolster them with some education on the matter might be a bad move. Once more, do you cite any actual evidence for the quality of the ‘guidance’ these people get, or do they instinctively know how to manage? Do they know how to break a job down into deliverables, time frames, and quality metrics, or might they need some… GASP! … training on how to do so? Do they think people can work endlessly and tend to overwork people until they burnout, or do they realize people have a breaking point and need rest? Based on what I’ve heard from silicon valley, I can guess which it is. Do any of them bother to do salary surveys before they move to hire people to ensure they’re not under or over offering? The latter being far less frequent, but it does happen. Do any of them know how to actually develop and write an actual job description so the people they’re looking to hire have a clue what they’re in for, or do they all do the typical thing of writing a description of the person they think can do the job they think they want to hire for, and then ambush them with reality after they’re hired? Do any of them have any training in any type of interviewing technique, be it behavioral or performance based, and what’s their success rate relative to what can be expected with industry best practices? Comparisons like that would be actual evidence.
“This manager should have been fired – and in any well-managed company with smart employees, he wouldn’t have lasted five minutes. The companies I know of would have had peer managers and upper managers detecting his incompetence and he would never have been put in a management role (or even employed.)”
Which goes to show your naivety and lack of experience in the field. Why would this manager be fired by the very people who promoted him when doing so would be a negative reflection on their own judgement? Yes, in some idealized firm that only exists as a proposed hypothetical in the mind of an academic who has never actually worked for a living, this manager would have been fired, or at least disciplined. However, in the real world hiring, promotions, and terminations are not just informed by performance, but by politics both good and bad, competence and incompetence, nepotism, and fear. IO psychologists have studied these dynamics for a long time, nepotism is a big one, especially in family owned companies, and I can assure you that the son of the boss has, quite often, damaged his father’s company with no consequences simply because of his relationship. And it’s HR more often than not that has to put a leash on that crap and who even occasionally does something horrible like suggest they hire out of the box people, and not fire people for spurious reasons irrelevant to performance.
“So you cooperated in his violation of the equal employment laws? Interesting.”
I guess passively yes, I just kept putting qualified people in front of him, letting his managers know about the problem, and they didn’t do anything about it because his department’s performance was okay. Eventually someone with the right background came in front of him and he hired that person, the business was in NYC and there were enough ethnic enclaves still there that eventually a Romanian came our way. What did happen, after I left that company, was that one Asian kid was transferred from the development side of IT to networking to help cover some turnover, and in short order he quit and in his exit interview apparently lambasted the manager and department. He was harassed to hell and back for various reasons including his race and demeanor, which was reserved.
Now, here’s the problem and why ‘diversity’ might be a laudable goal to educate these guys on, because what happens when they can’t find any more Romanians? Do they just deal with massive turnover because these guys don’t know how to treat people who aren’t of their ilk? Work perpetual overtime? Import someone directly from Romania? The company can’t fire the whole damn department and lose all that training and institutional knowledge. Gee, might some… GASP!… training on how not to be a dick potentially be in order to mitigate the situation, or even solve it?
I knew those guys, I don’t think they were deliberately being schmucks, they just all came from a very gruff, very blunt, very low emotional intelligence background. Christ, have you ever yourself worked with a ton of eastern European immigrants? Gone to a Russian restaurant and dealt with the waiters? If someone had addressed that as an issue before the managers built their own internal ethnic kingdom within the company it wouldn’t have been a problem. But no one cared until I and the HR manager at the time pointed out the problem repeatedly. To my knowledge it’s still on going though, because the department ain’t broken in terms of performance, not yet. But they are setting themselves up for a potentially massive point of failure that could be avoided if they’d force these guys to think outside their own nationality. But, wouldn’t want to let a liberal idea like diversity hurt their performance. Don’t want to hobble the managers with pesky HR requirements like not setting up a department with an obvious and glaring vulnerability, the legal risks and ramifications of which pale in comparison to the largely unseen costs, current and potential, that they’re imposing on themselves.
“So you’re a free-market guy, but think company owners, CEOs, and managers are all incompetent, don’t realize a high-quality, happy workforce is a competitive advantage that can make the company succeed and grow, and only you and HR departments everywhere keep them from destroying their companies by turning them into grim, despotic labor camps?”
I grade competence based on evidence, company owners and CEOs may or may not be incompetent, since we don’t operate in a free market it’s hard to nail down how much of their success is due to skill vs political acumen. However, I do not see anything in particular that assures they have any expertise in human capital management. If there was and they did, they wouldn’t fail so often on that front. Check out the reviews on Glassdoor.com of many companies, or Indeed.com. Look at their actual turnover data if you can get hold of it.
The vast majority of businesses in this country are not silicon valley firms, large or small, worrying endlessly about diversity hires. They are small to medium sized businesses owned and run by people who have no particular qualifications in human capital management. They had a good idea for a business or a product or service and got it off the ground, that’s it. That is not evidence they have any particular skill in hiring, retaining, or managing people.
“You do realize that no one who is a careerist in the field would ever dare tell people that the Emperor of HR is naked.”
I have, which is why I do it anonymously. You’re not entirely wrong in your concerns, but the idea that the majority of HR people nationwide are obsessing over diversity hires and government compliance is nonsense. The vast majority of HR departments at the vast majority of companies consist of the payroll guy or girl, who handles the payroll, occasional employee complaints, and a labor lawyer who they talk to when things get serious. And where HR departments do exist in larger companies, the vast majority of people I have met and worked with are doing their best day after day to stop people from shooting themselves in the foot with their own stupidity. And the source of most of the worst behaviors is managers, and not blatant screw ups like the example I initially gave, but just people who have been promoted to their level of incompetence and are barely holding on without a clue what they’re doing, and their employers not offering any resources to help them figure it out, more often than not.
When compliance with regulations does come up, it’s dealt with as a risk vs cost issue like anything else. One manufacturer I worked for knew of and deliberately ignored many labor regulations. They had people who should have been hourly classified as exempt so they could avoid overtime, they routinely ‘adjusted’ the punches of hourly people to avoid overtime as well. Could these people complain to the DOL? Sure. The DOL doesn’t usually do jack shit to help anyone. In my entire career I’ve seen one company successfully sued for back wages out of God know how many that were in blatant violation of the laws. One. It’s also worth noting that as free market people, however we feel about those laws, those employers did agree to abide by them when they hired their employees, so their employees are not entirely wrong or out of line to get pissed when it happens, or to try and seek redress via the only route that is practically available to them. Telling them to just get another job is an assinine response in a market where jobs are increasingly scarce, and not everyone can be a podcaster.
Maybe I’ll read the book, but if all you really did was talk to a bunch of people in silicon valley it’s a waste of my time. I can’t believe I have to explain to a bunch of Austrian econ inclined folks that there’s a difference between what people say and what they demonstrate via their actions. Simply assuming managers are right in what they want to do is insane. Hell, in my second to last job I was recruiting for tech firms in NYC and almost every single ‘manager’ I worked with had no idea that the salaries they were offering were 50% or more below market for the positions they were looking to fill, because they hadn’t bothered to check. But hey, I’m sure they had ‘guidance’ from their managers, so they shouldn’t need actual data to rely on or anything. It’s perfectly reasonable to try and hire a C# developer with ten years of experience in NYC for 50K. Gotta trust the instincts of those managers, they know so much more than those pesky HR people who bother to look at actual data and might want them to occasionally hire someone who isn’t a carbon copy of themselves.
Fools and knaves lurk everywhere, I suppose, but your experiences don’t match what most of my sources say about companies today. Otherwise why would Deloitte be suggesting an end to annual performance reviews, to be replaced by more-constant manager feedback and a reliance on direct managers, with some coaching from “concierge” consultants, to determine raise and promotions? Their studies point to management-by-HR as a source of one-size-fits-all schemes that managers have to game anyway. It’s true that less well-managed companies end up with bad low- and mid-level managers, with your style of HR serving as a bandaid to prevent disaster. But I can’t help noticing how close your position is to the usual defender of progressive government, who believes that average citizen is too stupid and unenlightened to decide any important matter for themselves. An enlightened class of trained bureaucrats can regulate them into being better citizens…
Your comments are valuable as one view from a long career, but most big employers today have big HR depts. doing things like requiring regular diversity and sexual harassment training by timed web browser, forcing productive and already-completely-aware people to jump through the same hoops over and over again, a degrading and timewasting experience for the 95% who don’t need it and provably useless on the 5% who do.
I do hope you read the book, where I suspect you will agree with a lot of it. Just like staffers of a government bureaucracy, you see all the good work you appear to do but can’t see how things might be done differently, so you feel attacked and are outraged. No one is saying your work was pointless or that all HR is useless or unneeded. This book is supposed to counter the vast quantities of pro-HR, pro-Progressive propaganda put out by the HR industry. The revolution is coming…
The book is currently available in: trade paperback from Amazon, Barnes and Noble, and other bookselling web sites; Kindle ebook format from Amazon exclusively; and as an audiobook from Audible and Amazon.
[Death by HR: How Affirmative Action Cripples Organizations, in Kindle and trade paperback.]
The first review is in: by Elmer T. Jones, author of The Employment Game.
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.
A Clinton Christmas Carol
“High Tech Under Diversity Pressure
Ban the Box, Credit Scores, Current Salaries: The Road to Hiring Blind
HireVue, Video Interviews, and AI Job Searches
“Death by HR” – Diversity Programs Don’t Work