What is the Up or Out policy? How widespread is the up or out system? Where is it most effective?
Up or out is a policy in some consulting firms where employees are expected to achieve a certain rank or level of progression within the business at a predetermined pace, over the course of a finite number of years. If they fail to do so, they are required by contract to leave.
Up or out policy may not work for every organization. But it has proven to be successful in accounting, management consulting and law firms where talented men and women quickly reach the top echelon of the profession.
UP OR OUT POLICY IN THE U.S. MILITARY
Up or out contracts are common in the military, academic institutions, medical practitioner firms, and law firms. Under this policy, a service member who is twice passed over for a promotion is forced out of the military. Service members are expected to keep climbing the latter towards command or senior enlisted leadership positions.
Last year, the Pentagon introduced the biggest change to its officer promotion policy in almost 40 years that would now allow senior officials to stay on at one’s rank rather than bear the brunt of an up or out promotion system. The changes in the system will impact both military recruiting and retention.
UP OR OUT POLICY IN ACADEMICS
In the United States, tenure-track professors are subjected to an up or out system. Newly hired professors must progress from assistant professors to associate professors within four to eight years. Many assistant professors trade their institutional prestige for a more lucrative deal at a lower-status university and move before they are forced to leave.
UP OR OUT POLICY IN LAW FIRMS
Up or out policy is seen as a standard in law firms, where associates or trainees are counseled out of the firm if they do not progress to the position of a partner in a specific amount of time. For historical context, the up or out policy forms part of the Cravath System, developed by law firm Cravath, Swaine and Moore in the early 20th century outlining strategic management guidelines for law firms. An individual’s success in selling business is crucial if he or she wants to advance from manager to partner.