Gruel competition remains inside a kinder workplace

On Wall Street, in Silicon Valley, across the legal profession and the corporate world, a growing chorus of companies are singing the praises of a kinder workplace, announcing policies like unlimited maternity leave at Netflix, and Goldman Sachs’ recommendation that analysts not work on Saturdays.

But a closer look at the forces that drive the relentless pace at elite companies suggests that — however much the most sought-after employers in the country may be changing their official policies  — brutal competition remains an inescapable component of workers’ daily lives. In some ways it’s getting worse.

“Jimmy Carter tried to get a rule in place for his executive White House staff to be gone and having dinner with their family by six in the evening, and it broke down,” said Robert H Frank, a prominent economist at Cornell University.

As Frank, who has written a book about the phenomenon known as winner-take-all economics, explains, the basic problem is that the rewards for ascending to top jobs at companies like Netflix and Goldman Sachs are not just enormous, they are also substantially more profitable than at companies in the next tier down.

As a result, far more people are interested in these jobs than there are available slots, leading to the brutal competition that plays out at companies where only the best are destined for partnerships or top management jobs.
This phenomenon was the focus of a recent New York Times article about workplace practices at Amazon. In the article, some employees and former employees complained of 80-hour workweeks, interrupted vacations, co-worker sabotage and little tolerance even for those struggling with life-threatening illnesses or family tragedies.

The account appeared to put Amazon at odds with recent workplace trends, but the reality, experts say, is not nearly so neat: Grueling competition remains perhaps the defining feature of the upper echelon in today’s white-collar workplace.

If anything, analysts point out, Amazon offers at least one major advantage over many other companies, which is that its founder and chief executive, Jeff Bezos, has created a culture in which employees almost always know exactly where they stand.

“It’s a super attention-rich environment,” said Marcus Buckingham, an author and founder of the firm TMBC, which advises large companies on employee evaluation and performance. “There’s a lot of critical attention. They are almost never ignored.”

The legal profession, one of the most brutal when it comes to pace and time commitment, illuminates the economic logic of a system where a large initial cohort of workers is gradually culled until only a small fraction are left.

This small fraction then has access to the enormous wealth and prestige that survivors in this reality are granted.

Work-life balance is a top concern

The Cravath system, named after the prestigious New York law firm known today as Cravath, Swaine & Moore, began to be put in place in the early 20th century. The firm and its imitators hired a large class of entry-level associates from the top law schools in the country, then relentlessly sifted them out over a five- to 10-year period, at the end of which only the most brilliant and productive — historically about one in 10 or 15 — became partners.

Those who did not make partner got a first-rate legal training along the way, though, and were almost always able to land respectable jobs at lesser firms or as in-house corporate lawyers.

For Cravath, it was also a plus: The partners made good money billing out its associates at top-of-market rates.

Over the decades, an increasing number of young law school graduates have chafed at the punishing Cravath model. A recent report by the Center for WorkLife Law at the University of California, Hastings College of the Law, cited survey data of big-firm lawyers showing work-life balance to be a top concern.

But because a partnership at the likes of Cravath, or similar firms, remains such a coveted prize, the top firms can still count on a large surplus of young lawyers willing to defer their personal lives for the better part of a decade for a shot at partnership. “The model is alive and well and working wonderfully in major New York law firms,” said William Henderson, an expert on law firm economics at the Indiana University Maurer School of Law. “You attract really ambitious people and thin them out.”

The thinning process even has its own name among scholars of law firms: the tournament. “The tournament is designed to identify the owners of the firm and the people who will run major engagements, attract business,” Henderson said.

“There is 15 to 20 per cent of the law school population who want to play in that league.”
Variations on the tournament are also the norm at elite management consulting firms and investment banks. It is one of the reasons that, when companies like Goldman Sachs and Bank of America Merrill Lynch adopted policies over the last few years that encourage young employees to spend more time away from work on the weekends, many skeptics rolled their eyes.

As long as there are a large number of new employees competing for a limited number of highly lucrative positions, policy changes are not likely to persuade many people to ease up.

Remove bias at workplace

The reality is not that different at many American corporations and technology companies that promote their employee-friendly practices. Buckingham points out that companies like Microsoft may have made news in recent years by abandoning their ‘stack ranking’ systems, in which managers produce detailed rankings of the members of their teams once a year, but they have not abandoned the practice of comparing employees with one another. They have simply tried to adopt less-biased systems for evaluating and promoting them.

 “If the only way for me to get promoted is to suck up to a biased manager, I have to figure out any way I can to suck up,” Buckingham said.

Even the steps that many tech companies take to make the workplace more engaging often result in employees simply spending more time consumed by their work. Increasingly popular workplace messaging programmes like Slack and HipChat, for example, both increase the amount of casual, friendly interactions among co-workers, but these messaging systems may also have the effect of keeping employees on their computers or mobile devices at all hours of the day and night.

“We’re constantly talking,” said an editor at a digital media company who spoke on the condition of anonymity to avoid alienating his boss.  “It does create a little more of an implicit pressure to be available.”  But there are some signs of change, as more and more young highly credentialed workers acknowledge that they cannot fulfill their responsibilities as husbands, wives, parents and friends while ascending through their organisations.

“Cultural change is a slog,” said Stewart Friedman, a professor at the University of Pennsylvania’s Wharton School who recently did a study comparing the views on work-life issues of Wharton graduates from 1992 with Wharton graduates from 2012. “There’s been a genuine shift among workers. We as a society are struggling with this,” he said.  As in previous decades, the legal profession may hint at what is to come. Alternative work arrangements are proliferating, and many previously elite firms are finding they no longer have the profits or the partnership slots to make the Cravath system work, abandoning the field of play to only a tiny number of ultrasuccessful firms. “Amazon is at the top of the food chain,” Henderson said. “Maybe they can get away with it. But most firms can’t rank and yank.”