In times more economically secure than these-before Gramm-Rudman, the volatile stock market, dramatic takeovers, and increased shareholder awareness-a company set out to do a job, hired staff and hoped to be successful. If, along the way, the company experienced sudden growth, it hired to accommodate the new orders. When business slowed, it laid people off. What companies attempted to do on a large scale was respond to market fluctuation.
Traditionally, some companies have earned a less than winning reputation for "luctuating" (hiring and firing) without regard to employees' needs. Often, their gains in financial efficiency were offset by low employee morale, decreased productivity and, because of their reputation, above average recruitment costs when it was necessary to staff up. Their operating capital was proportionately reduced because the more people they generated for unemployment rolls, the greater was their unemployment tax rate.
Other companies, in an effort to foster a paternal ...
