The New Yorker: “The More the Merrier” – Investing into Personnel Pays Off

Our Summary: Cost-cutting on staff in retail operations reduces long-term performance.  Companies that suffered consequences include Home Depot and Circuit City.  On the other hand, companies like Uniqlo and QuikTrip, which invest into training, are more profitable per employee.  The cause is misaligned incentives for managers who benefit from short-term cost-cutting even when it’s at the expense of future performance.

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