Netflix isn’t afraid to fire people.
In fact, the company is very open about giving underperforming employees the ax when they are not part of Netflix’s vision for the “dream team.”
That pain is, however, eased by a “minimum” 4-month, full-pay severance package.
“If you think of a professional soccer team, it is up to the coach to ensure that every player on the field is amazing at their position, and plays very effectively with the others,” Netflix wrote in a new document outlining its company philosophy. “We model ourselves on being a team, not a family. A family is about unconditional love, despite your siblings’ unusual behaviour. A dream team is about pushing yourself to be the best teammate you can be, caring intensely about your teammates, and knowing that you may not be on the team forever.”
How does Netflix decide who works well on the team? One way is through what the company calls a “keeper test.” It’s pretty simple: “If one of the members of the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving.”
If an employee doesn’t pass the keeper test, they’re “promptly and respectfully given a generous severance package so we can find someone for that position that makes us an even better dream team.” Netflix adds: “Getting cut from our team is very disappointing, but there is no shame.”
One of the main reasons a Netflix manager might not fight to keep someone, and thus fire them, is because while they are working hard, they aren’t effective.
“Succeeding on a dream team is about being effective, not about working hard,” Netflix wrote. “Sustained ‘B’ performance, despite an ‘A’ for effort, gets a respectful generous severance package. Sustained ‘A’ performance, regardless of level of effort, gets rewarded. Of course, to be great, most of us have to put in considerable effort, but hard work is not how we measure effectiveness.”
For those who work hard but just can’t quite get it done, however, Netflix has a silver lining: a generous severance package. “We generally offer a minimum of four months of full pay as a severance package, giving our ex-teammates time to find a new company,” Netflix wrote.
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