For Hire and Fire Policy, two terms are crucial- ‘Employee’s Performance’ and ‘Need of Employer’.
Perform or Perish. It means either you perform otherwise you will be fired from a job. In the modern era of ‘knowledge economies’ consumer awareness is an all-time high. Moreover, due to media, advertising, social media consumer is so aware not only about his/her choices but quality, price, after-sales service, technical specifications also.
Due to all these changes and transformations, the pressure obviously comes to the employers and mostly on manufacturers. With keeping all the parameters of competition intact, he not only has to survive but increase his margins/ profits over a period of time. For this, he has to invest a lot in all factors of production. He has to invest a lot in land, labor, capital, management, technology, and R&D related to the product. On the other hand, he has to pay attention to cost minimization or at least costing. He has to keep a balance between the payout & price per unit output also.
Need of Employer
Where an employer hires employees on a temporary basis with an understanding that there is no job security in such employment, meaning the people so employed can be dismissed at the drop of a hat, the arrangement is known as the policy of ‘hire and fire’ in general parlance.
To dismiss a workman the employer has to have a reason in normal circumstances but in the case of ‘hire and fire,’ the person can be dismissed simply because the employer does not need him anymore. There is no livelihood-related obligation on the employer towards the workman.
Such an arrangement is normally practiced in the private sector. However, even government departments hire people on an ad hoc basis and dismiss them when the work is over. The expression ‘hire and fire’ does not mean a policy or right where an employer ‘can’ dismiss a worker forthwith, for that right is available to all employers alike.