How Netflix Reinvented HR
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How Netflix Reinvented HR
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Re: How Netflix Reinvented HR
#2I think some of this is bizzare.
I mean, an employee is satisfactory, but only satisfactory, so they give him a generous severance package and go hiring somebody else. Really?
This sounds like "stack ranking" where they fire the bottom 60% every year.
Re: How Netflix Reinvented HR
#3I think some of this is bizzare. I mean, an employee is satisfactory, but only satisfactory, so they give him a generous severance package and go hiring somebody else. Really? This sounds like "stack ranking" where they fire the bottom 60% every year.
There are no regular firings at Netflix. If a manager is really happy with all of their team, there is no pressure to rank everyone and can the lower n%. This alone suggests that it's most certainly not like stack ranking.
Re: How Netflix Reinvented HR
#4The big accounting firms in the US are an interesting case to look at. Accountants will join the firm and spend 8-10 years there. Eventually, they either become partners or they wash out (most don't make partner). The culture has developed in such a way that "washing out" is not really seen as a negative thing. They've established a concept of alumni and maintain good relationships. The "washed out" alumni go on to become CFOs and CPAs and there is a steady stream of referrals to and from the big firms.
Maintaining relationships after letting an employee go is hard. If employees are only let go for incompetence, it may not even be worth the effort. But if an employee is let go because there's a resource mismatch I think there is a lot of value in maintaining that relationship.
Netflix seems to say "We just don't need your exact skill set right now" instead of "You aren't good enough for us". That seems like a prime situation to try and keep a good relationship.
Re: How Netflix Reinvented HR
#5Netflix sounds like an extremely well-managed company. Can anyone comment on the accuracy of what's in the slide deck? I'd be curious to know how it all works out.
Re: How Netflix Reinvented HR
#6After getting to this line - "after I left Netflix and began consulting..." - I couldn't help wondering whether or not the author was fired and whether this means there are significant portions of her advice that the current management of Netflix would disagree with.
Re: How Netflix Reinvented HR
#7I think some of this is bizzare. I mean, an employee is satisfactory, but only satisfactory, so they give him a generous severance package and go hiring somebody else. Really? This sounds like "stack ranking" where they fire the bottom 60% every year.
I mean, an employee is satisfactory, but only satisfactory, so they give him a generous severance package and go hiring somebody else. Really?
Netflix wants a high-performance team. That means that "merely satisfactory" in a sleepy, less demanding company would make someone an outlier.
You have to cut the "merely adequate" 4s and 5s if there's no way to turn them into 7+; what you should do is do it humanely. Personally, I think that a 3-5 month severance is (a) not that expensive, in the grand scheme of things, and (b) by far superior to the morale toxicity of the traditional PIP-- especially when you're talking about a good-faith employee who did nothing wrong.
Re: How Netflix Reinvented HR
#8Anecdote time:
My wife worked for Netflix customer service (CS) back about 9 years ago - in their formative years. She likens her time there as similar to any other large company. The individuals were great, but the management was your typical bureaucracy. Rankings were heavily based on seniority, not actual individual value.
As CS reps were considered to be fully interchangeable (and the first to be let go to maintain profit margins), it was a terrible department to try and gain seniority in.
Never seemed all that different, HR wise, from any other company. Perhaps they've changed; I can't say.
Re: How Netflix Reinvented HR
#9I appreciate the philosophy of getting rid of HR rules in favor of treating people like adults with good judgement. However, good judgement is probably one of those things whose definition is open to disagreement. E.G. one person's good judgement might mean taking risks and another's might mean playing it safe. Is Netflix just forming a monoculture of people with the same definition of good judgement.
Also, it's interesting that the writer validates Netflix's efforts by saying the company's stock went up, 3 Emmys were won, and the firm acquired a bunch of new customers. Are employees expected to optimizing these metrics, first and foremost, which seem very short sighted to me? What about fundamentals like profitability and customer retention?
Re: How Netflix Reinvented HR
#10The big accounting firms in the US are an interesting case to look at. Accountants will join the firm and spend 8-10 years there. Eventually, they either become partners or they wash out (most don't make partner). The culture has developed in such a way that "washing out" is not really seen as a negative thing. They've established a concept of alumni and maintain good relationships. The "washed out" alumni go on to b…
I've often wondered whether the structure you describe, which is also used by law, consulting, and investment firms, could be adapted to startups. It seems like it might be a way out of the employee/founder dichotomy.
The key concept here is that of partner. I like that word, but would like to know exactly what it means in such a structure. How, besides having high status, do partners differ from non-partners? How are they compensated? What sort of equity do they get?