How Netflix Reinvented HR

Article: https://hbr.org/2014/01/how-netflix-reinvented-hr

Published: January 2014

Notes

• John’s story: senior engineer lost 3 reports, and got happier because he didn’t like hand-holding less experienced engineers, and rather would quickly do the work himself.

• Laura’s story: Laura was an excellent worker, but her role became obsolete as the company scaled. Instead of finding her a new role, they fired her with a “rich severance package”.

• Rule 1: Hire, Reward, and Tolerate Only Fully Formed Adults. Adultlike behavior means talking openly about issues with your boss, your colleagues, and your subordinates. Examples: vacation and expense policies relying mostly on common sense, and conversations with a manager for exceptions.

• Rule 2: Tell the Truth About Performance. Instead of performance reviews, colleagues just either tell directly what person should stop, start, or continue doing. Otherwise, managers just fire people with a “great severance package”.

• Rule 3: Managers Own the Job of Creating Great Teams. Instead of trying to work with they have, managers should adapt the team to the task. Manager is supposed to envision a team that fits project perfectly 6 months from now, and compare it to the existing team. Then, they hire new people and let go of the unfit. Recruiting is the top priority. Other activities, such as coaching, mentoring and doing paperwork aren’t measured.

• Rule 4: Leaders Own the Job of Creating the Company Culture. When a leader doesn’t embody company’s values or just slacking, workers see it and lower their performance accordingly. Leaders need to clearly communicate how the company makes money and what behaviors will drive its success. Leaders must be aware how different subcultures require different management. For example, engineers vs sales, full-time employees vs hourly contractors.

• Rule 5: Good Talent Managers Think Like Businesspeople and Innovators First, and Like HR People Last.

Conclusion

• Back in 2014 Netflix had this unique common-sense culture.

• It was based on a high bar in hiring and quick way to fire people.

• The salary was above market and management actually encouraged workers to interview outside, so they can learn it for themselves.

• Judging from comments on HN, that culture is long gone by 2023. It’s a more traditional big enterprise management with Jira and semi-annual performance reviews.

• Most of the people who enjoyed the culture of 2013 left the company when the leadership was replaced.