What’s that mean?  When times get tough, evaluate employees individually.  Sure, global pay cuts are an easy out, but it’s going to be tough for Dan from accounting to accept a global cut when Mary from sales spends most of her day on the phone chatting with her wedding planners.  If you have too many regional managers or under-performing sales people, you owe it to the rest of the team to downsize.  Dan shouldn’t be punished for Mary’s shortcomings.  Furthermore, failure to hold under-performing employees accountable will hold your over-performing employees back.

Why is that?  Well, without carrots to reach for, what’s the point of hard work?  If Dan works 60-hour weeks and has lowered accounting costs, then he should be rewarded.  If he realizes that he will not be rewarded for any increased effort, then he will apply his efforts elsewhere — like job hunting.  Nobody wants to stagnate in a role.  Good employees need to feel like they’re growing, like their roles are expanding.

Gawker is a great example.  As soon as the economic outlook became clear, they downsized, (in theory) ridding themselves of the under-performing and solidifying their base.  Then, last week, they leaked their new bonus program.  Their actions are perfectly transparent (hell, they blogged about them): when times are tough you may be fired, when things go well you’ll earn more money.  Meritocracy!

But maybe I’m wrong.  Are there unhappy people working at Gawker?

We had a great start — 20 authors signed up within the first month — but interest waned.  Organically, traffic never seemed to find the site.  Turns out, there are not a lot of long tail searches for poetry and fiction (duh!) — but that’s what everybody wanted to write.  Travel and wine writing did a lot better, especially a piece about a fantastic journey through Spain by James Teitelbaum and Ben Madeska’s frequent wine posts — which were always a great read.

I realized there was no writer community building up around the site, so I got us on Ning and Facebook and installed the JS-Kit comment module and the AddThis share button to foster this, but that wasn’t enough.  To generate an influx of writers, I needed to continuously post on craigslist, which became tiring.  I reached out to sites to create partnerships, but nothing significant ever materialized.  The site never reached critical mass.

Could it have worked?  Maybe.  It’s nice to imagine a little more publicity or a little different strategy, but I think there are a few core problems that made things tough:

1. The Yelp model is dead — blogs killed it.  Creating a destination publishing site is a tall order when a person with 10 minutes of free time can create their OWN website from scratch on Blogger or WordPress.  Yelp will continue, don’t get me wrong, but the likelihood of a new Yelp competitor challenging its market is nearly nil.
2. Fiction and poetry aren’t good at generating organic traffic — even my (fantastically written) poem about Ashley Dupree, Eliot Spitzer’s famous prostitute constituent, failed to generate any volume.  News does better, and Associated Content is exploiting that angle with a similar model.
3. Fiction writing may be dead.  I hate to say it, but maybe it’s true.  Playboy is the last hold-out publisher of regular short stories.  That can’t be a good sign.
4. Websites need to focus.  Fiction / Wine / Travel was too much.  Nick Denton at Gawker has shown how to make focused, specific sites work inside an umbrella network.  I think this is a good approach — which is why I started up BARTANNICA.com, a site focused on booze.

Now it’s time to evolve.  Writers, thank you for all the help and support.  Jonathan Soeder, thank you for helping me build my dream.  We’ve been struck down, but we will return more powerful than you can possibly imagine.