Was at a firm with a up-or-out policy. It doesn't sound like author has much real world experience with what they're studying...
The really good people have leverage so the can stay or go as they please. Meaning the people that get hit are average-ish (in the context of firm, not wider market). People good enough to make it to middle management but no further. You don't need to fire them either - they catch the drift when they don't get promoted, and those too stupid to notice were never "good".
>“Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’” says Kaniel.
The below market rates are primarily an effect of CV-prestige rather some intricate machiavellian mind game. People tolerate it because "I was a senior role at X" has value long after you left.
The really good people have leverage so the can stay or go as they please. Meaning the people that get hit are average-ish (in the context of firm, not wider market). People good enough to make it to middle management but no further. You don't need to fire them either - they catch the drift when they don't get promoted, and those too stupid to notice were never "good".
>“Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’” says Kaniel.
The below market rates are primarily an effect of CV-prestige rather some intricate machiavellian mind game. People tolerate it because "I was a senior role at X" has value long after you left.