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Netflix Termination Culture

JamItFast

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https://insights.dice.com/2018/10/29/netflix-company-culture-termination

Netflix has a culture where management continually reevaluates its employees.

Managers ask the question “If this person were to get an offer at another firm, would I fight to keep them?”

For those of you who have employees, do you agreee with this way of thinking.

As an employee myself I do like this way of thinking. If I’m not valued I wouldn’t want to be at the firm and we’d have a fresh crop of new people coming in when employees aren’t the best.

My only concern as an employer would be the struggle to fill positions. At my current job we seem to take a while to find people to fill open roles.
 

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MJ DeMarco

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Managers ask the question “If this person were to get an offer at another firm, would I fight to keep them?”
I like it! Forces you to "come clean" on your employee.
 

Jeff Noel

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Transparency in between employees and employers should be more straight forward nowadays.

But the "You got my feelings hurt" movement would become huge.
 
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lewj24

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I think GE had a policy years ago where they said every year the worst 10% of employees would be fired. Every single year.
 

JScott

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Once that becomes their reputation prospective employees will view them as too risky compared to other options.
This is actually a very common employer tactic in Silicon Valley -- I could name a half dozen very large tech companies that have similar views on culling the bottom of their workforce on an annual basis.

If you're an employee in the tech world in California, you expect that this is the case, and in my experience, any employee who is average or above really appreciates this culture. It raises the level of the entire organization.

And if you're a manager in the Valley, you definitely appreciate this, as it makes raising the bar for your team/organization much, much easier (firing people, even for cause, can be very difficult when it's not common in the organization).

That said, while it's a well known secret in the Valley, Netflix is the first to come out and admit publicly.
 

becks22

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I think GE had a policy years ago where they said every year the worst 10% of employees would be fired. Every single year.
Yes Jack Welch put this into place and GE rose to prominence but look at the stock prices now. Makes you think about what these type of decisions do long term to a company. Did it really help? Sidenote-- I know that GE's stock has gone down for a lot of reasons I just think that this may have changed their culture negatively and that could have impacted their profitably.
 

JScott

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Yes Jack Welch put this into place and GE rose to prominence but look at the stock prices now. Makes you think about what these type of decisions do long term to a company. Did it really help? Sidenote-- I know that GE's stock has gone down for a lot of reasons I just think that this may have changed their culture negatively and that could have impacted their profitably.
This isn't the reason GE lost prominence. Read the book, "The Innovators Dilemma" to understand the GE downfall...
 
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JamItFast

JamItFast

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Once that becomes their reputation prospective employees will view them as too risky compared to other options.
That could filter out employees who don’t believe they can be indispensable. But it could also trigger the “Imposter Syndrome” where indisepenable employees avoid it also, under the belief that they are not as qualified as they are.

This is an interesting contrast to Google’s policy, which seems to be - “Once we’ve hired you, that means you’re good enough and you don’t need to worry about job security.”
 

The Abundant Man

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This is actually a very common employer tactic in Silicon Valley -- I could name a half dozen very large tech companies that have similar views on culling the bottom of their workforce on an annual basis.

If you're an employee in the tech world in California, you expect that this is the case, and in my experience, any employee who is average or above really appreciates this culture. It raises the level of the entire organization.

And if you're a manager in the Valley, you definitely appreciate this, as it makes raising the bar for your team/organization much, much easier (firing people, even for cause, can be very difficult when it's not common in the organization).

That said, while it's a well known secret in the Valley, Netflix is the first to come out and admit publicly.
Is it really a secret if everybody in the valley does it
 

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becks22

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This isn't the reason GE lost prominence. Read the book, "The Innovators Dilemma" to understand the GE downfall...
I have read it-- thank you for mentioning it again though. I will re-read after I finish my current book.

I know there are SO MANY reasons why GE went downhill. I just think that Welch created such a culture where the bottom 10% were cut, the values in GE changed to match his vision. That's all. So much that could be discussed this is just is a very small part.
 

404profound

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This is actually a very common employer tactic in Silicon Valley -- I could name a half dozen very large tech companies that have similar views on culling the bottom of their workforce on an annual basis.

If you're an employee in the tech world in California, you expect that this is the case, and in my experience, any employee who is average or above really appreciates this culture. It raises the level of the entire organization.

And if you're a manager in the Valley, you definitely appreciate this, as it makes raising the bar for your team/organization much, much easier (firing people, even for cause, can be very difficult when it's not common in the organization).

That said, while it's a well known secret in the Valley, Netflix is the first to come out and admit publicly.
Interesting
 

JScott

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I have read it-- thank you for mentioning it again though. I will re-read after I finish my current book.

I know there are SO MANY reasons why GE went downhill. I just think that Welch created such a culture where the bottom 10% were cut, the values in GE changed to match his vision. That's all. So much that could be discussed this is just is a very small part.
Sorry, didn't mean to imply that the book was about GE -- I don't think it even mentions GE. The book is about why many corporate giants lose market share to innovative startups, and fail to maintain their competitive advantages. I personally think GE fell pray to this mistake (discussed in a lot more detail in the book)...
 

JScott

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Is it really a secret if everybody in the valley does it
I just meant that it's not talked about openly. Management at these companies knows it goes on (obviously). Employees either know or suspect. But, it's not common knowledge to those outside the industry...except now for Netflix...
 

LaraJF

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It's definitely prevalent. Cisco is quite open with their policy to get rid of 10% every year. And it's been in place over 15 years.

I do think companies lose their edge if they don't retain good workers. It's not always about the individual but also how well the team gels. If you get rid of the person who kept the team happy, then the team will fall apart.

So I did appreciate the question about whether or not this helps or hurts a company in the long run.

Yes I see bringing in fresh blood can be useful, but if management stays the same, then all that innovation is for naught. And I don't see them firing 10% of management.....

I just meant that it's not talked about openly. Management at these companies knows it goes on (obviously). Employees either know or suspect. But, it's not common knowledge to those outside the industry...except now for Netflix...
 

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