A majority (77%) of senior executives believe a fixed quota for annual staff dismissal would boost financial performance and productivity. A study, “Cull or cure: the secret of an efficient company?”, from management consultancy Hudson, states 17% of executives believe a company could target up to 20% of its workforce for dismissal per year without damaging productivity and morale, while 43% agree dismissing up to 5% of staff is positively healthy.

Hudson questioned 562 senior managers and found that currently only 4% of companies deliberately dismiss a proportion of their staff. Almost one-in-four bosses admit the current employment climate, where available talent is scarce, means they would rather retain average or even below-average performers. Introducing a culture of fear was cited as another deterrent to a dismissal quota by 75% of respondents.

John Rose, chief executive of Hudson UK, said: “Clearly, this is a massive – and, to date, relatively taboo – area of debate for British business. Shedding staff in a climate where companies are desperate for talent is counter-intuitive, with retention the focus for UK organisations. But retaining for the sake of retaining will help solve neither the UK’s skills crisis nor its increasing productivity gap.” The views of British heads of business were polarised, with 49% agreeing that training is vital in tackling poor staff performance, and a similar number (45%) taking the opposite view, believing that training is just a temporary sticking plaster over the problem.

The trigger for the study was a controversial speech given by Steve Ballmer, chief executive of Microsoft, last year, where he announced to the Institute of Directors conference that he culls one in every fifteen company employees every year. n