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Changing The Rules: NextJump And Its No Fire Policy

File this story under “A Crazy Idea, But Does It Work?”

How would a #NoFirePolicy affect your company? An interview with NextJump CEO Charlie Kim who decided to do just that.

In the interview, Charlie Kim, the CEO of NextJump, describes the genesis and development behind a compelling idea–how would eliminating the ability to terminate employees alter the way in which an organization recruits, trains, and develops them?

I have to admit, my first thought was that it would never work. Employee exits, involuntary or otherwise, are inevitable. It’s the organizational equivalent of death and taxes. But then I thought, does it really have to be that way? I know that I get impatient with people when they say things such as, “It’ll never work” or “That’s how we’ve always done things.” They’re barriers, and mostly self-imposed. There’s no legislation which states you have to fire someone. In the state of New York (where NextJump is located) at-will employment is the norm.

Then I thought, this is a publicity stunt by a  new startup trying to attract talent. But in looking further, NextJump, which is a e-commerce company, started in 1994. It’s also the dominant player in the employee rewards arena, partnering with over 90,000 companies, with a reach of millions of consumers. It’s been around for close to 20 years and is an established business.

But is it working? In the interview, Mr. Kim points out that turnover went from 40% to zero. He also states that positive evaluations of the company (captured via employee engagement surveys) took a dramatic increase upwards. Lower turnover and great engagement scores can be perceived as positive signs of a great company culture. However, the interview speaks vaguely as to how the company manages employees who aren’t performing to standards. And the Glassdoor reviews for NextJump are not great.

Here are some questions I would like to see answered:

  • How does NextJump define an “employee?”
  • What percentage of contingent employees constitute its workforce?
  • What’s the demographic breakdown of its workforce?
  • What filters are in place to effectively screen candidates for characteristics suitable for an environment where lifelong employment is possible?
  • What are the caveats–exceptions by which NextJump can terminate someone if their actions are egregious (e.g., criminal activity) or detrimental to the business (e.g., performance standards)?
  • What support systems are in place to insure line managers are equipped to coach, motivate, and/or discipline employees? How are these systems aligned with NextJump’s no fire policy? 

In spite its lack of depth, and the fact that it raises (for me) more questions than it answers, this article and its premise speaks to the power of an idea. When framed correctly, a good idea can transform what can be considered a “fixed” position (in this case, that you have to fire an employee) and transforms it into a more “fluid” and manageable one. If what he’s reporting is accurate and is working, Mr. Kim and NextJump changed the rules of the game. I’m curious to see whether or not this is a truly stable and sustainable organizational model.

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