Netflix corporate culture
Unlike many other Silicon Valley corporations, Netflix states: “We are not a family, we are a team of cool professionals. They have formalized their principles in a document called Netflix Culture. During a meeting with one of the company’s engineers, we found out to what extent the employees comply with the principles of this document.
A company without HR.
One of the company’s employees told us “In all the time that I have worked here I have never met an HR person. Maybe we have them somewhere, but we’ve never run into them.
Netflix has an interesting HR system.
The company thought that spending too much money on Human Resource was not profitable, so they could save the budget by just letting people manage themselves.
Trust Policy
Netflix basically has a lot of issues handled by self-management, even though they don’t consider themselves a horizontal company. Any issues are handled with the team manager. It is with coordination, not by his decision.
The expense confirmation system works almost automatically. If an employee spends money on something they need for work, the company will refund them. Refunds are confirmed almost 100% of the time. The main rule to adhere to is:
Act in the best interest of the company.
For example, an engineer we talked to at the company told this story:
“I flew to a conference as a speaker and thought it was in the best interest of the company because I was representing our product and Netflix itself. Nobody checked me out, didn’t demand a report, didn’t send me there. I just flew myself. Then after the fact, I entered all the expenses for tickets, hotel, etc. into the system and the company refunded me.”
It’s a question of trust. It seems that with this attitude, employees will start abusing the system and taking advantage of their position. In reality, however, people know that the company trusts its employees, but they realize that trust is easy to lose and fly out the door. It’s much more profitable to act honestly and enjoy the benefits than to go overboard once and lose your job.
It’s not easy to get in and very easy to get fired at Netflix, so employees try to comply with the famous Netflix Culture Deck. Until 2017, it was a huge presentation of more than a hundred slides describing the company’s entire unique approach to building communications. In 2017, they re-released the document in a more user-friendly form.
There are a lot of companies that like to claim: “We’re family. It’s an honor to work with us. You have to get into our spirit!” Netflix says the opposite:
“We are NOT a family. We are a team of professionals. We all work here because we love the work.”
No one is going to say, “We’re not going to raise your salary, but just imagine the important and useful things you’re doing!” No one here cares what useful things you do, as long as you’re a professional.
It’s more accurate to compare Netflix to a basketball team. There’s a goal to win, and no one is going to say that everyone is here because they’ve become friends or family. It’s too big a company and too many employees to make that claim. Every professional contributes to the goals.
What, then, is Netflix Culture about? About the company’s approach to hiring and building communications. Netflix only hires strong, experienced people, such as engineers at least at the senior level. They say everyone is free to do what they think is right. They don’t control vacations here, they don’t keep track of a person’s presence-absence. If the work is done, no one cares if the employee is in the office or not.
Hiring
There are initial recruiters who find engineers and managers. And there are the team managers, and the managers of the managers are the higher level managers.
Each team has a different hiring process. Some might interview the whole team, some might give it to the manager. This is the first level interview. The second level is an interview with a few higher level people.
Candidates are asked a lot of soft skills questions.
For Netflix, this is very important because not everyone can work in a self-management paradigm. The basic idea:
“No one is going to tell you what to do.”
You can even come into the office and just sit around doing nothing for a month. But at the end of the month a manager will come to you and say, “Your process is broken here, it’s not working here. Come on, you’re fired,” and that’s the end of it. Netflix declares that everyone should be able to understand what needs to be done for their team, and if they don’t understand it, they should know who to go to for information.
Initiative and quality of communication are valued here. Often the work is structured in the format: someone said: “We need this kind of thing for film editing. No one will tell you how to make it, what we need to develop. You have to figure out which teams can do it, which people and systems are needed.
The ability to communicate is precisely what is tested in interviews. Specific questions are asked: “What situations did you have in your last job? How did you solve them? What would you do in this particular case?”
Salary
Netflix has a very specific approach to payroll. Most companies in the Valley pay salaries in several installments. The first part is base or salary. The second part is stock. The third part is bonuses.
Netflix doesn’t have any of that; the company only pays salary. They explain that: “We don’t want to affect people’s salaries with management’s work.” The fact that the company’s management worked poorly and the stock went down should not affect an employee’s salary.
The salary the company pays fully covers both stock and bonuses. The average pay here is higher than at other Silicon Valley companies.
If an employee wants stock, they can buy it through stock options, but they get that opportunity regardless of merit or any other factors.
There are no additional tangible or intangible incentives at the company. The company believes that if a person works with them, then they will perform at their best. If there is no good performance, it is easy to “drop out”, so the main motivator is to keep one’s job.
Another unique thing about Netflix is the adaptation of salaries to the market. Managers are constantly studying the market, and if a person is paid less than he would be at another company, his salary is raised without him even asking for it. For example, an engineer we talked to got a 15% raise last year.
This increase is given not on merit, but only at the dictate of the market, so that there is a competitive salary and the specialist does not go anywhere. It’s hard to get a raise on merit here, because by default Netflix expects all of its employees to work to the best of their ability.
Vacation
The company doesn’t have any specific vacation policy. You can go on vacation at any time and for any length of time. The main thing is that there should be no unfinished work, no open projects. If the team has finished its work, the whole team can go on vacation. If only one person has finished his part of the work and his competence is not needed by the team, he can also leave.
By the way, according to research done in the Valley, with unlimited vacation, people are much less likely and for a shorter period of time to go on vacation. Because with a fixed vacation once a year, they want to take the allotted time, and this psychologically pressures the person. There is no pressure with unlimited time off.
On average, employees at Netflix take 1-1.5 months off.
Firing
In America it’s not supposed to be easy to fire someone if you’ve already accepted them into the company. But in fact, America is the easiest country to fire legally due to the principle at will. Any employee can be fired with the phrase “You have 5 minutes to pack up, don’t touch the computer, turn in your pass.
You work as long as you’re needed.
On the other hand, an employee can also call his manager any day and say, “That’s it, as of today I’m off the job, I’m waiting for you to pay all financial arrears. Goodbye.” That’s the law.
But some companies have their own internal rules that make it hard for them to fire an employee unless he screws up quite substantially. For example, he won’t work properly for a month. This is from the fact that in the U.S. personal and corporate brand is important. After firing a person will look for a new job, and the future employer will definitely call the previous place of work to take a character reference. Conversely, a company that fires every other person won’t hire anyone over time.
At Amazon, for example, managers really don’t like to fire people. If a person can’t do his job, then the manager must put him in training, then write him a development plan and every week for three months write a report whether the person is doing well or not. And only if there is no improvement for more than three months, you can begin to raise the question of dismissal.
That’s why more often than not Amazon doesn’t fire people, they just move them to another team. It’s very hard to get out of Amazon. Getting fired from Netflix is nothing to do.
Netflix can afford to fire people easily because there are a lot of great people who want to work for this company. The pay here is above market. Plus, the company pays the former employee a salary of 4 months’ salary when he or she is fired. More than weighty compensation.
An employee who has been told “You’re fired” has no chance of staying. But this is usually hinted at beforehand, so that they can do something about their performance.
