6 ms·

I agree the whole family thing is ridiculous. However, the performance focus of Netflix is probably too far on the other end and ridiculous too. People are not

I agree the whole family thing is ridiculous. However, the performance focus of Netflix is probably too far on the other end and ridiculous too. People are not machines and performance will not always remain high. And also measurements of performance of people are often silly and useless. Performance will fluctuate and change with time. So a level a loyalty in the face of bad performance is still very advantageous even for businesses. Some happy medium between family and performance oriented needs to be found.

arcticfox 10y ago
The voting on your post implies people disagree, but the method you mention is the way the vast majority of companies try to operate because it intuitively makes sense. Even in a cut-throat industry like sports, athletes aren't cut or traded the instant they enter a slump (if they still have future potential).
- cyberpanther 10y ago
  As mentioned below, Netflix has the philosophy "we're a professional sports team". Yet they don't pay people millions of dollars like an athlete. If you really want to be cut throat, great, pay people like an athlete then. Otherwise quit the BS.
  - fossuser 10y ago
    They may not pay millions (as far as I know), but I've heard a senior engineer at Netflix can make upwards of $400k/year which is a lot relative to a similar position in other companies.
    - phamilton 10y ago
      It's actually comparable to league minimum in Major League baseball, roughly $500k. And I can guarantee that the average minor league player out there makes far less than your average software engineer.
      - pc86 10y ago
        Is your point that because an average software engineer makes 5-10x what a minor league baseball player makes, that a "major league" software engineer should also make 5-10x what an MLB player makes?
        phamilton 10y ago
        Nope. The original claim is that Netflix runs more like a professional sports team in terms of demanding performance. The argument against was that they don't pay like one. My argument is that they pay somewhere between a minor and major league team, both of which have a "perform or get out" mentality.
    - prdonahue 10y ago
      Some make far more than that. They pay 100% cash and let employees decide how much appetite for (equity) risk they want to take on. It's a refreshing model for those who've seen their significant equity stakes (on paper) become worthless, or those who prefer to know exactly what compensation they'll be getting upfront, etc.
  - freddie_mercury 10y ago
    Not all professional sports pay millions.
    - inopinatus 10y ago
      Most professional athletes don't earn big money. Rather like music, a very few make it in the big leagues. Of the rest, some find steady work in minor teams; many, many others struggle to get by combining their passion with casual day jobs. If your sport isn't one of the few that can command massive advertising dollars, then there may be no pay at all. The value chain is very clear: all high athlete salaries are ultimately funded by advertisers wanting access to consumer eyeballs. Overlay all this with the very short effective career, the near-absence of post-athletic marketable skills, and the devastating effect of injuries, and you'll find athletes are statistically underpaid over their lifetimes.
      - pc86 10y ago
        Statistically underpaid compared to what?
  - tempestn 10y ago
    They pay market rates, just like sports teams do.
    - btmorex 10y ago
      Sports teams don't actually pay market rates. Every sport that I can think of limits pay in one way or another especially for stars, ostensibly so that small market teams can compete with big market teams.
      - jzwinck 10y ago
        In sailing you can usually pay crew whatever you like. Here's one example: http://www.wsj.com/articles/a-sailors-salary-300-000-if-he-works-for-larry-ellison-1426013584 http://www.wsj.com/articles/a-sailors-salary-300-000-if-he-w... There probably aren't any $10MM/year sailors, but we can infer that $1-2MM/year should be possible for a few.
      - stevewilhelm 10y ago
        In English and European club football (soccer) there are no salary caps. "In English sport, there’s no draft; there’s no salary cap; there’s no revenue sharing, no parity. In the Premier League, it’s every team for themselves." [1] 1 http://freakonomics.com/podcast/leicester-city/ http://freakonomics.com/podcast/leicester-city/
        rmc 10y ago
        It quite funny how socialist American football is. :)
        tonyedgecombe 10y ago
        It quite funny how socialist American is. :)
  - aianus 10y ago
    > Yet they don't pay people millions of dollars like an athlete. They also don't fire you at 30 for being washed up and leave you with brain injuries and zero transferable skills.
    - douche 10y ago
      They wait until you're 40 to call you washed up /s
  - ttam 10y ago
    Netflix is actually known for paying some of the best salaries in the Valley.
- kmonsen 10y ago
  I don't know for sure, but I don't think Netflix cuts people right away either. I am sure they are looking for future potential before making a rash decision. If not there would be hardly anyone left and I know several that people that have worked there for many years.
Bombthecat 10y ago
As a company, why should you care about keeping low performers? Just hire new ones.
- eloisant 10y ago
  For many reasons: * Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer * Because your metrics might not be good enough to actually discriminate low performers from high performers * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company) And probably other reasons. So I have no problem with: * Letting go people because the company has to reduce man count, and choices have to be made * Letting go people because their behaviour is hurting the company However I'm dubious about the idea that you should keep churning employees perceived as "low performers" to hire new ones who may or may not later reveal to be better.
  - calinet6 10y ago
    Yep, the problem isn't deciding to keep low performers; it's that it's extremely difficult to identify them or separate them out from the performance of the system surrounding them. This is basic Deming management wisdom: most of the overall performance of your company comes from the system and environment surrounding individuals, including the individuals themselves. Optimize the whole, not the parts; focusing on individual performance is just a distraction that drives overall performance down the drain.
  - slgeorge 10y ago
    > * Because your metrics might not be good enough to actually discriminate low performers from high performers I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else). > * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company) See stack ranking! The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is. That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".
tim333 10y ago
We had a family like business run by my family for many years. It had a stable profitable business that allowed that though - it's harder in startup type companies. We eventually got bought by a US corp who fired everyone.
kbenson 10y ago
This part of the Netflix story jumped out at me: Five years later, McCord, her mentor, left. When I asked her why, she visibly flinched. She wouldn’t explain, but I learned later that Hastings had let her go. McCord being the manager who instituted the aggressive cutting of employees that weren't good current fits for a position, which makes this somewhat ironic. Having an employee flinch when a prior employee's name is brought up seems like a major red flag to me. One of the negatives of aggressively removing people from positions like they do might be that many existing employees stress about their employment, possibly to an unhealthy degree. It sounds like sometimes there is little or no feedback as to performance before these removals.

arcticfox 10y ago

The voting on your post implies people disagree, but the method you mention is the way the vast majority of companies try to operate because it intuitively makes sense. Even in a cut-throat industry like sports, athletes aren't cut or traded the instant they enter a slump (if they still have future potential).

cyberpanther 10y ago
As mentioned below, Netflix has the philosophy "we're a professional sports team". Yet they don't pay people millions of dollars like an athlete. If you really want to be cut throat, great, pay people like an athlete then. Otherwise quit the BS.
- fossuser 10y ago
  They may not pay millions (as far as I know), but I've heard a senior engineer at Netflix can make upwards of $400k/year which is a lot relative to a similar position in other companies.
  - phamilton 10y ago
    It's actually comparable to league minimum in Major League baseball, roughly $500k. And I can guarantee that the average minor league player out there makes far less than your average software engineer.
    - pc86 10y ago
      Is your point that because an average software engineer makes 5-10x what a minor league baseball player makes, that a "major league" software engineer should also make 5-10x what an MLB player makes?
      - phamilton 10y ago
        Nope. The original claim is that Netflix runs more like a professional sports team in terms of demanding performance. The argument against was that they don't pay like one. My argument is that they pay somewhere between a minor and major league team, both of which have a "perform or get out" mentality.
  - prdonahue 10y ago
    Some make far more than that. They pay 100% cash and let employees decide how much appetite for (equity) risk they want to take on. It's a refreshing model for those who've seen their significant equity stakes (on paper) become worthless, or those who prefer to know exactly what compensation they'll be getting upfront, etc.
- freddie_mercury 10y ago
  Not all professional sports pay millions.
  - inopinatus 10y ago
    Most professional athletes don't earn big money. Rather like music, a very few make it in the big leagues. Of the rest, some find steady work in minor teams; many, many others struggle to get by combining their passion with casual day jobs. If your sport isn't one of the few that can command massive advertising dollars, then there may be no pay at all. The value chain is very clear: all high athlete salaries are ultimately funded by advertisers wanting access to consumer eyeballs. Overlay all this with the very short effective career, the near-absence of post-athletic marketable skills, and the devastating effect of injuries, and you'll find athletes are statistically underpaid over their lifetimes.
    - pc86 10y ago
      Statistically underpaid compared to what?
- tempestn 10y ago
  They pay market rates, just like sports teams do.
  - btmorex 10y ago
    Sports teams don't actually pay market rates. Every sport that I can think of limits pay in one way or another especially for stars, ostensibly so that small market teams can compete with big market teams.
    - jzwinck 10y ago
      In sailing you can usually pay crew whatever you like. Here's one example: http://www.wsj.com/articles/a-sailors-salary-300-000-if-he-works-for-larry-ellison-1426013584 http://www.wsj.com/articles/a-sailors-salary-300-000-if-he-w... There probably aren't any $10MM/year sailors, but we can infer that $1-2MM/year should be possible for a few.
    - stevewilhelm 10y ago
      In English and European club football (soccer) there are no salary caps. "In English sport, there’s no draft; there’s no salary cap; there’s no revenue sharing, no parity. In the Premier League, it’s every team for themselves." [1] 1 http://freakonomics.com/podcast/leicester-city/ http://freakonomics.com/podcast/leicester-city/
      - rmc 10y ago
        It quite funny how socialist American football is. :)
        tonyedgecombe 10y ago
        It quite funny how socialist American is. :)
- aianus 10y ago
  > Yet they don't pay people millions of dollars like an athlete. They also don't fire you at 30 for being washed up and leave you with brain injuries and zero transferable skills.
  - douche 10y ago
    They wait until you're 40 to call you washed up /s
- ttam 10y ago
  Netflix is actually known for paying some of the best salaries in the Valley.
kmonsen 10y ago
I don't know for sure, but I don't think Netflix cuts people right away either. I am sure they are looking for future potential before making a rash decision. If not there would be hardly anyone left and I know several that people that have worked there for many years.

Bombthecat 10y ago

As a company, why should you care about keeping low performers? Just hire new ones.

eloisant 10y ago
For many reasons: * Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer * Because your metrics might not be good enough to actually discriminate low performers from high performers * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company) And probably other reasons. So I have no problem with: * Letting go people because the company has to reduce man count, and choices have to be made * Letting go people because their behaviour is hurting the company However I'm dubious about the idea that you should keep churning employees perceived as "low performers" to hire new ones who may or may not later reveal to be better.
- calinet6 10y ago
  Yep, the problem isn't deciding to keep low performers; it's that it's extremely difficult to identify them or separate them out from the performance of the system surrounding them. This is basic Deming management wisdom: most of the overall performance of your company comes from the system and environment surrounding individuals, including the individuals themselves. Optimize the whole, not the parts; focusing on individual performance is just a distraction that drives overall performance down the drain.
- slgeorge 10y ago
  > * Because your metrics might not be good enough to actually discriminate low performers from high performers I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else). > * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company) See stack ranking! The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is. That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".

tim333 10y ago

We had a family like business run by my family for many years. It had a stable profitable business that allowed that though - it's harder in startup type companies. We eventually got bought by a US corp who fired everyone.

kbenson 10y ago

This part of the Netflix story jumped out at me: Five years later, McCord, her mentor, left. When I asked her why, she visibly flinched. She wouldn’t explain, but I learned later that Hastings had let her go. McCord being the manager who instituted the aggressive cutting of employees that weren't good current fits for a position, which makes this somewhat ironic. Having an employee flinch when a prior employee's name is brought up seems like a major red flag to me. One of the negatives of aggressively removing people from positions like they do might be that many existing employees stress about their employment, possibly to an unhealthy degree. It sounds like sometimes there is little or no feedback as to performance before these removals.