&gt;Making it difficult to fire ineffective people, or doing so slowly, is one of the best ways to ruin an organization. The friction that exists around firing in many countries seems to be part of why they have less effective business innovation and investment.<p>It has nothing to do with innovation and investment and everything to do with managers&#x27; desire to maintain their dominance over their employees.<p>&gt;Meanwhile, poor performers stir dissatisfaction among other employees, especially effective ones. This makes it harder to start new companies and grow.<p>Not half as much as authoritarian managers do, and easy-to-fire policies guarantees authoritarian managers.<p>&gt;It&#x27;s preferable for both employee and employer have the right of free association.<p>Only if it were an equal relationship. Which it patently is not.<p>&gt;As organizations tend to grow larger, they tend to accumulate less effective people over time<p>You know what kind of organizations do that the most? The ones that know that they can dispose of their employees at a moment&#x27;s notice for any reason, without reason.<p>Organizations that can&#x27;t fire indiscriminately tend to be a bit more careful about hiring. Which is good for job security, which in turn is actually <i>good</i> for efficiency and good for innovation.