How Netflix Reinvented HR(hbr.org) |
How Netflix Reinvented HR(hbr.org) |
This had two side affects.
1) People were afraid of being fired. You could come in one day and be sent home that afternoon without ever having any idea that you were under-performing. You'll hear Netflix employees talk about the "Culture of Fear".
2) In a meeting with my team Patty said "We are your co-workers, not your friends." `The idea being, you don't make friends at work because you might have to fire that person one day. It was really strange, people were very guarded and almost never talked about their lives outside of work.
PIPs protect employees from the constant fear of being fired. They require managers to give an employee negative feedback. Without them, managers can take the easy route and never have the uncomfortable conversations.
#2 made life really hard at Netflix. The majority of my friends come from my co-workers. You spend more time with them than most other people in your life. Some teams ignored the company culture and became close friends anyway. I think the correct thing to do here is to expect your managers to be adults and do the hard thing. Fire your friend.
for #1, I've never heard of someone being let go without having any idea. When a manager goes to HR and says "I'd like to let this person go", they ask, "will it be a surprise?" and if the answer is yes, they send you back to have the hard conversation first.
for #2, I have lots of friends from Netflix. And some of them have even been let go and we're still friends. I was even friends with my boss, but like any company, when it is a relationship with a manager it must always be reserved.
One of the reasons no doubt they're constantly pestering me on LinkedIn to interview with them even though they have just 2100 employees or so. They're running out of people who will actually listen to them.
Facebook, on the other hand, has 5700 employees and I've never heard from them even though my resume is definitely suited to their needs. Why? They don't have to. People want to work at Facebook. They don't have to recruit.
Working at Netflix seems to be a very demanding experience. Will you say that Netflix balance this demand ? In which way ?
Reading this article, I have the feeling that Netflix wants the perfect employees, with no bonuses, no awesome perks, an Uncle Scrooge culture (Wow, I can display my $40 SV paid-by-myself poster in the corridor without asking ! Awesome !), and worst of it an "Han shot first" management.
The saddest thing in this article is the unconditional autocongratulation (sorry for the frenchism) when it doesn't seems so marvelous.
Working there, IMHO, is no more demanding than any other company.
There are no bonus', the salary is just raised - the average pay for engineers at Netflix is something like $200k which is fairly competitive to the "total compensation" from other employers.
I might be wrong here, but being treated like an adult, a very liberal vacation policy, and 100% support for anything and everything I need to do my job; are more valuable than what most people consider perks...
And they're certainly not a "uncle scrooge" culture - I've never once had to justify a purchase and as far as I can tell unless you're asking for something odd or fairly expensive (>5k or so) manager approval isn't even needed.
Anyone's experience at Netflix is going to be heavily influenced by their manager, and sadly, Netflix doesn't seem to be much better than any other company at finding or growing good managers.
It is demanding, but management sets a good example of taking time off and allowing for a work/life balance. If you're there at 6pm on a weekday, the building is 1/2 empty and by 7pm almost no one is around. People do not work crazy hours.
Also, for the most part, no one is around for the next two weeks, other than being on call for critical issues.
As for the no bonuses and perks, that is deceiving. Yes it is true, but instead they pay us what they would spend on those perks. Then we can chose to spend it on that or anything else.
Also, there are no official perks, but management is really good about celebrating wins and making sure we feel appreciated.
This sounds sort of like a culture built around having lots of temporary contractors around; or perhaps employees who are treated as temporary contractors.
"We kept an eye on our IT guys, who were prone to buying a lot of gadgets."
You can filter for just engineers, if that's who you want to pay attention to. Netflix rates very low compared to Facebook, Google, etc. Those companies demand hard work from their employees, but are great places to work. They do a good job with hiring.
Netflix does not, they just grind through people very rapidly .. like they're cheap batteries. Thus the poor glassdoor reviews.
Fact is, Netflix culture is terrible for employees but effective for the Company.
I advise anyone before they apply for a job anywhere to study glassdoor carefully. Ignore ratings, read comments carefully. Reviews which balance positive with negatives are the ones to take as credible.
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.
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?
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.
Unsurprisingly, even though this happened less than three years ago, all the people I had been in contact don't work in Netflix any more.
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.
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.
Why do you call it a scam? It certainly can be, but it doesn't have to be. We used to have a fixed-PTO policy (3 weeks per year) at my company, and moved to an unlimited policy sometime in 2012. In the 2013 calendar year I've taken about 4 weeks off. I'm actually not sure of the exact number of days I've taken off, as we don't really track it so closely. I'm perfectly happy with this arrangement.
Do you have any evidence that it's a "scam" at a large number or majority of companies?
At the end of the day it'll come down to the personality of your manager and the dynamics on your day-to-day team.
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?
So once someone is not needed, the person is just sent off? I understand a generous severance is given. But, you couldN'T use that money to try to retrain the worker with another technology/task/job?
What about mentoring? Someone has to start somewhere. So if Netflix ONLY hires someone who's A grade, where do B and C grade people get their chance to learn and improve? Sounds like a very selfish way of hiring (granted every company is selfish).
I do agree with one thing in the article. The whole year-end or half-year end performance review is just a sham. No one in management cares until management decides to lay off someone. They start putting down C or D grade all of sudden when earlier it was mostly As and Bs. And next thing you know, you are let go.
Netflix has traditionally only hired very senior engineers. Mentoring, at least technical, isn't seen as necessary for these people. Further, if an engineer thinks mentoring would help them, the onus is on them to seek it out.
You need enough of a draw to get a competitive applicant pool, and enough people who have sufficient talent to judge it.
Most companies err by hiring based on specialty, e.g. "we need exactly 3 data scientists and that's it". If you're looking for generally good people and willing to accept the variability that comes with that, and you have a managerial environment that provides multiple avenues to success (which is the definition of a good management environment) rather than multiple ways to fail, I think it's not that hard.