Friday, November 14, 2008

The Circuit City Model

I wonder how many people would be willing to put their lives in the hand of Michelle Rhee. It appears the teacher union is not, but Ms. Rhee plods on nonetheless. "I'll give you a big raise if you only let me fire you whenever I feel like it" is not the most persuasive argument in these troubled times.

Naturally, it's inconvenient to have highly paid employees. Of course, you can offer them a gazillion dollars next year if they only sign contracts enabling you to fire them before having to ante up, and it makes a hell of a sound bite. And it's remarkable how many put their faith in Ms. Rhee, with a record of no discernible accomplishment, and an inability to even document her five minute teaching career was remotely effective.

But it's certainly true that if Ms. Rhee gets a chance to dump any teacher she feels like, her city could save wads of cash. She's not the first to do this, though. For example, take a look at what Circuit City did. The illustration above, from The Consumerist, shows what happened after it announced that it was "firing everyone who knew what 1080p meant so that they could hire cheaper labor." Oddly, rather than achieving immediate success, it worked itself right into bankruptcy.

At times like these, it's perhaps wise to question the wisdom of Rhee-Klein style corporate models. You may not have heard, but Circuit City is not the only company that's gone belly-up over the last few months.
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