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Comment by jc4p | Hacker News Reader

This is so 100% on point. I think the Netflix NYT article from yesterday had a more realistic tone regarding the "family" aspect: http://www.nytimes.com/2016/06/19/magazine/can-netflix-survi...

> The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.”

Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.

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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.

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).

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.

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.

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.

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.

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?

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.

> 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.

They wait until you're 40 to call you washed up /s

Netflix is actually known for paying some of the best salaries in the Valley.

They pay market rates, just like sports teams do.

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.

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/

It quite funny how socialist American football is. :)

It quite funny how socialist American is. :)

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-w...

There probably aren't any $10MM/year sailors, but we can infer that $1-2MM/year should be possible for a few.

Not all professional sports pay millions.

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.

Statistically underpaid compared to what?

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.

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.

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.

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

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.

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.

> * 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".

If someone is always a low performer that makes sense, but the Netflix question is what do you do with people who have been good performers but aren't at the moment. Netflix philosophy is that you cut those people ruthlessly.

Here are some problems with that: A lack of loyalty to your employees can have a corrosive effect on morale. Employees can end up having very short term goals, or manage their careers in ways that they try to keep themselves in advantageous positions rather than the ones that serve the company. Why should a star take on a risky project, if failure results in termination? Firing can also be a lazy way to deal with a variety of management problems.

> cut smartly

I actually think this is important. Working with an asshole is a big problem, and I fully admire leaders who know when it's time to let someone go because the situation cannot improve. It certainly beats working in a caustic environment because people are afraid to fire someone.

Wasn't Netflix referring to cutting people when they became idle?

Their whole motto is "we're a professional sports team" so if you can't play ball (or there's no longer a ball for you to play with) then you're cut from the team. This was different from the family viewpoint where a company takes an employee and tries to grow them or find new work for them.

They're not really referring to "culture" fit, team compatibility, or even cutting assholes, just whether or not you can provide value to Netflix at that moment.

The problem I have with pro sports analogies is that productivity is much easier to quantify and track in sports than most businesses.

One usually must spend a decent amount of time/energy tracking and making the case for their own productivity, which of course, lowers their actual productivity.

They don't fire "assholes" though, they fire people with "adequate performance" (you need to be a "star").

alas, usually in cutting environments like this the caustic assholes are the ones who stay and the ones who haven't presented their output in the best way are the ones who will be cut.

Of course people have to be smart about cutting, and things are not going to go right if the leaders are themselves unable to identify actual negative net influencers.

But in my own experience, I've worked at one specific place that was very very good about identifying people who plainly didn't help and letting them go. It helped immensely over time: the culture was really good (people were really invested in their job, and loved working as a team) and the retention rate was about 6x higher than most places in the same field.

They didn't use bogus metrics or anything, it was always a "feeling" kind of thing. If several people said someone was not helping, they were most likely right. It was arbitrary I admit, but rarely wrong.

There's books about it (e.g. https://www.amazon.com/Asshole-Rule-Civilized-Workplace-Surv...) but personally haven't read them yet.

You're assuming that you have to be an asshole to get/make your results noticed. And yes, those who sit in a corner doing stuff nobody cares about will be fired, and rightfully so.

I think the implication was that those who sit in a corner doing stuff fundamental to the company's success, who don't present themselves well to the decision makers, will still get cut.

I just listened to recent old NPR clip on Netflix and the HR employee who created this slideshow. I'm planning on exploring this slideshow soon.

Keep in mind the employee who created the famous culture deck was herself let go.

We say co workers. Not family.

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