Welcome to the Company, Oh By the Way You Will Be Fired in Four Years

by Michael Haberman on February 1, 2012 · 7 comments

It has been announced that the new Revel Casino in Atlantic City is trying out a new concept in employment. This new concept is called “term limits.” They are hiring employees for the casino, which is still under construction, and basically they are telling them their jobs will only last four to six years at which time they will be terminated and they will have to reapply. So “welcome to the company, oh by the way you will be fired in four years.”

The term limits only apply to the front line workers. Food servers, cocktail waitresses, dealers, etc. but it does not apply to management positions. Since it is new it naturally has it detractors. According to an article on NPR “ ‘Why would you take your good performers and put them through that competitive process,” asks attorney Alice Ballard, “if you aren’t trying to get rid of a good performer for some other reason?’ Ballard thinks that “other reason” is probably age. To her, this reapplication process looks like a low-profile way for the casino to regularly weed out older employees.”

However, there are other viewpoints, such as that of Brian Tyrrell, a professor of hospitality management at Stockton College in New Jersey. According to the article “Tyrrell thinks the reapplication policy will motivate people to move up in the company — because management positions won’t require people to reapply.”

I think there is another effect of this policy. People who want to be competitive will work hard at being good performers. They will make sure their skill sets are current. Tom Peters often professed that the best performance appraisal was to see how a person’s résumé had improved over the past year. If it had not then they should not get an increase and perhaps should be let go. Same concept here and I think it is one that more and more employers will adopt. Of course it will remain to be seen how quickly these workers will then try to unionize and ban that practice through contract language, so in a New Jersey this may not last long.

I think it is an idea that has merit and should be explored. Besides, in today’s rapidly changing environment a lot of things can change in four to six years. I don’t think anyone should count on a job beyond that period. With employment-at-will we all need to realize that our jobs require us to always be on our toes. This is just employment-at-will exercised ahead of time.

Is any other company using such a system? What do you think are the positives associated with this method? The negatives? Let us know.

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{ 6 comments… read them below or add one }

Karin February 1, 2012 at 9:26 am

It does ‘fit’ with the true state of employment generally-that there is no longer an enticement to tenure and loyalty given the massive layoffs that have become the norm of business. It also fits with the more financially motivated approach that says by firing people in short time frames any benefits that accrue and/or increase in value and cost will also be mitigated for the employer and unavailable to the employee.

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Dave Urban February 1, 2012 at 3:17 pm

Not buying it. This smacks of the famous Walmart memo that their chief HR person, Ms. Chambers, wrote complaining about the cost of long-term employees:

Chambers wrote that “the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity. Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart.

Recycling employees every few years means much lower costs for a company. Talk about “use, abuse, and trash!”

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Alicia Graham February 3, 2012 at 2:16 pm

Couple this possibility with the HR training that the new generation does not want to invest in a career as much as they want to invest in life. The result is a lot of new hires, constantly. Why stay if the end result is not a potential elevation, but a certain elimination? Why put in stellar performance if the management already has a way to get rid of you?
It will no longer be about you perfecting your ability, but it may become about the fastest way you can get out of this job before the term is up. Initial training and acquisition/recruiting costs will soar. Continuity, expertise will now rest on the managers who will have to constantly deal with forming/storming teams. Actually, I think it is the managers that should have this applied to their employment. Now THAT is incentive to stay current in the job and in management skills.

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Michael Haberman February 3, 2012 at 2:43 pm

This method fits quite well with the predictions of the US becoming a “free agent” nation or a nation of independent contractors. So perhaps this is an early move in the evolution of the world of work. Given how rapidly things may change in the future it may cause all of us to reassess our skills and situations every three or four years. There is definately no permanence in employment even with today’s work arrangements. The best way to stay permanently employed is to stay permanently employable by constantly staying educated and on the outlook for new opportunities. If you have an employer fostering this all the much better. I do agree with you that management should be under the same arrangment.

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CHris Walker February 6, 2012 at 9:28 am

So, when the interviewer asks that classic question ‘Where do you see yourself in five years?’, the answer is ‘Not here’. Of course that’s alresdy true, with the median length of service in a job in the US barely four years.

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Michael Haberman February 6, 2012 at 10:39 am

Hopefully they have trained their interviewers well enough not to ask that question. In fact everyone should be trained not to ask this inane question.

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