Up or out, also known as a tenure or partnership system, is the requirement for members of a
hierarchical organization to achieve a certain rank within a certain period of time. If they fail to do so, they must leave the organization.
Examples
Private sector
"Up or out" is practiced throughout the
accounting industry in North America, most notably at the
Big Four accounting firms,
which also practice this policy in their branches in other countries.
Up or out is also practiced in the
investment banking
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
industry, where third year analysts and third year associates who will not be promoted are asked to leave the bank.
The
management consulting industry also practices up or out, where it is commonly regarded as a sign of the industry's "hard-nosed approach to doing business" with
Bain & Co and
McKinsey & Company
McKinsey & Company is a global management consulting firm founded in 1926 by University of Chicago professor James O. McKinsey, that offers professional services to corporations, governments, and other organizations. McKinsey is the oldest and ...
being the two consultancies most closely associated with the approach.
According to Leslie Perlow, up or out is also employed at
Boston Consulting Group.
Among many other
law firm
A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients (individuals or corporations) about their legal rights and responsibilities, and to r ...
s,
Cravath, Swaine & Moore's so-called "
Cravath System" historically expected
associate lawyers to achieve
partner status within ten years of being hired or to leave the firm.
U.S. entrepreneur
Vivek Wadhwa has argued that engineering in Silicon Valley is also "an 'up or out' profession: you either move up the ladder or face unemployment".
Military
In the
U.S. military
The United States Armed Forces are the military forces of the United States. The armed forces consists of six service branches: the Army, Marine Corps, Navy, Air Force, Space Force, and Coast Guard. The president of the United States is the ...
, the 1980
Defense Officer Personnel Management Act mandates that officers passed over twice for promotion are required to be discharged from the military. It has been criticized as "arbitrary and bad management" that forces out "many fit, experienced officers... because there were only so many slots into which they could be promoted." Paul V. Kane, a
Marine
Marine is an adjective meaning of or pertaining to the sea or ocean.
Marine or marines may refer to:
Ocean
* Maritime (disambiguation)
* Marine art
* Marine biology
* Marine debris
* Marine habitats
* Marine life
* Marine pollution
Military
* ...
veteran of
Iraq War
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, partof = the Iraq conflict and the War on terror
, image ...
and a former fellow at
Harvard Kennedy School, argued in 2009 that the "archaic 'up or out' military promotion system should be scrapped."
Manning control
Manning control is a policy in the British Army that allows the force to terminate the service of soldiers after 3, 6, 9, 12 or 15 years' service to maintain the balance of age and capability within the force and ensure that there are opportunitie ...
within the
British Army
The British Army is the principal land warfare force of the United Kingdom, a part of the British Armed Forces along with the Royal Navy and the Royal Air Force. , the British Army comprises 79,380 regular full-time personnel, 4,090 Gur ...
plays a similar role.
Diplomacy
The
United States Foreign Service has used an up-or-out system since 1980. The
American Foreign Service Association, the professional organization for foreign service officers, has criticized the system on the grounds that it penalizes otherwise-dedicated officers who do not wish to enter Senior Foreign Service.
Academia
Tenure-track professors in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., federal district, five ma ...
are usually subject to an up-or-out system. Newly hired professors, most often with the rank of
assistant professor
Assistant Professor is an academic rank just below the rank of an associate professor used in universities or colleges, mainly in the United States and Canada.
Overview
This position is generally taken after earning a doctoral degree and gene ...
, must impress their department with their accomplishments to be awarded tenure, usually but not always combined with promotion to associate professor. Those not awarded tenure within a fixed time may be terminated. This first promotion may be required for tenure and further promotions are neither guaranteed nor necessary.
Discussion
Despite widespread use in certain industries, a 1988 textbook by
Michael Jensen noted that the system's effects on
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
have not been studied in depth.
See also
*
Forced ranking
A vitality curve is a performance management practice that calls for individuals to be ranked or rated against their coworkers. It is also called stack ranking, forced ranking, and rank and yank. Pioneered by GE's Jack Welch in the 1980s, it has ...
*
Lifetime employment
*
Mandatory retirement
*
Peter principle
References
{{Reflist
Human resource management