I would think you'd have to be doing "piece work" to not have to fire people, that is an employee's compensation would have to be a direct result of their accomplishments, otherwise you won't have a way to deal with the slackers and "in cube retirements".

You will eventually have people who choose to produce less work than their benefits cost, much less salary.

[long grisly example of a firing deleted. short version, guy joined company, got extraordinairly expensive medical work taken care of, took the telecommuter version of "in cube retirement" until we fired him so he could take unemployment while ramping back up his previous independent contracting customers. Left us to pay back his probably fictitious hours billed to customers, health care costs, and unemployment insurance. See, the short version is even long and grisly.]