Managing Out, Managing Up and Managing Down

An American bank had speculated in order to generate high profits and had taken risks that were far too big. Senior management had also refrained from investing in new technology. The result was a financial crisis. The ones who got the blame, however, were the employees, especially middle managers: they did not work hard enough and they had a flawed culture, said senior management. A far-reaching reorganization was launched, by means of which all middle managers would be retrained to become change agents who would introduce the new system and the new culture in order to raise the intensity of the work. In the bank’s own terminology, there were three activities in particular that they were to devote themselves to: ‘managing out, managing up and managing down’. Officially, the bank’s policy was that nobody would be dismissed in spite of the obvious need to reduce the number of staff. Instead, staff cuts would be achieved through attrition, which was what ‘managing down’ meant. In reality, there was an advanced system for getting rid of staff through the extensive measurement of their performance and then classifying them according to a statistically ‘normal distribution’: 15 per cent ended up at the bottom, 15 per cent at the top and 70 per cent in between. Those at the bottom were described as immature, the others as mature. After each measurement was taken, the immature were to be sacked — ‘managed out’. All the others were to be ‘managed up’, which did not mean that they would be promoted but that their productivity would be raised.