What does a ‘No Fire’ policy change? Everything.

Imagine if a company had a ‘no fire’ policy. The impacts touch everything.

David Marquet interviewed Charlie Kim, the CEO of NextJump, a company focused on rewards and loyalty programs. Kim has instituted  a ‘no fire’ policy at NextJump, and he realized — after a six month consideration of the idea — that such an approach would change everything in his business:

David Marquet, How would a #NoFirePolicy affect your company?

Charlie Kim: 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.

I guess it goes beyond the normal requirements when you don’t have the option to simply dump someone: you look deeper into their make-up and less at their make-up. And the impacts are fairly conclusive: no turnover.

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.

Changing the social contract so fundamentally — treating people like family and not discardable — is a completely radical move. I am sure that we we’ll see more of this idea as more companies begin to realize the value of standing for something more that increasing profits for the shareholders.