Should You Take the Netflix Approach to HR?

Posted by SRA Admin on Dec 16 2015


It's no secret that hiring choices are one of the most important ways to ensure a company thrives. It is every hiring manager and expert recruiter's job to go out and find the best possible fit for a vacant position.

For their part, video streaming, rental, and production company Netflix has taken the idea of employee fit to another level. Their culture deck, entitled Netflix Culture: Freedom & Responsibility, is one of the most widely shared and referred to document in the world of corporate HR. Reading through the slide deck (124 slides in total) it's not hard to see why. Netflix CEO Reed Hastings and  Chief Talent Officer Patty McCord put into words the culture that most founders dream about.

What Did Netflix Do?

This post will not explore all 124 slides of the culture deck, though they are certainly worth reading, but we can try to distill some of the most critical points of the deck. First, let's highlight their seven aspects of the Netflix culture:

  • Values are what we Value
  • High Performance
  • Freedom & Responsibility
  • Context, Not Control
  • Highly Aligned, Loosely Coupled
  • Pay Top of Market
  • Promotions & Development

Of these seven aspects, the two we will focus on, which are highly relevant to hiring practices and processes are Freedom & Responsibility and Pay Top of Market.

Pay Top of Market

This is one aspect that appears straighforward but still needs a bit of explanation. The Netflix goal is to only have the best possible employees in every single role. While this may, on the surface, be the goal of any hiring department, many companies keep adequate employees for years, even if they are not performing at the top. In order to attract and retain top talent, Netflix executive compensation packages - and those for every employee - are at the top range of the market. This means that every employee (all of whom are expected to excel) will be making the top of what they could expect to make at any other company in a similar position.

Freedom & Responsibility

The title of the deck comes from this aspect of the Netflix culture. The idea, which again is the end result of hiring only excellent employees, is that the best employees thrive when they have freedom. This does not mean policies that allow them to work from home or an extra foosball table in the breakroom, but the freedom to innovate. Excellent employees are responsible and thrive when they are allowed to make their own choices -- from how many hours they spend in the office to how much they spend on a business trip. It applies to the processes of the office as well, with Netflix making every effort to distance itself from the corporate bureaucracy that is the fate of so many growing companies.

How You Can Apply the Netflix Methodology

Every company is different and the exact Netflix culture may not be applicable to every situation, but there are certainly ways to apply this methodology to natural products jobs as well as other industries. It starts with hiring. Finding the best fit for a job is only the start. Every manager should have employees that he or she would fight to keep. If a manager would not fight to keep an employee, then the Netflix culture dictates that employee gets "a generous severance package" in order to maintain talent density.

Beyond hiring only excellent employees, and getting rid of those who prove they are less than excellent, hiring managers can work to ensure that new hires are well aware of the expectations of the company culture and that they are able to work within the framework of freedom and responsibility.

Those who are steeped in corporate traditions may scoff at the idea that employees can decide for themselves how many vacation days they get. But one look at the Netflix successful story just may have even the most die hard traditionalists changing their tune.

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