> If your employees are fully formed adults who put the company first, an annual bonus won’t make them work harder or smarter.
The contrast painted here is astounding. It demands so much loyalty from the employee, and in return, offers no loyalty whatsoever from the employer.
As for the annual bonus, Netflix assumes that everyone is functioning at a high level and pays as if they were making the top-end of the bonus range at other companies. Which is part of the rationale behind the high base compensation.
To me, this is the problem - who determines this and what is their dataset? I worked at a company in the past that claimed to do this, but to do this they generally need some sort of data source. And the data sources for salary data are tough to use in this way - positions/responsibilities vary, regions vary, etc. Just tough to get this right - even with the best intentions.
As an employee, you don't get to see all of the requests for raises, all of the people negotiating salaries, etc. But there's people in the company who do. That's all the data you need.
Source: I have interviewed with them.
I have also not heard any stories about Netflix employees being underpaid, except one being lured away by FB for over $1M.
> so much loyalty from the employee, and in return, offers no
> loyalty whatsoever from the employer.
I disagree.
Netflix clearly says "interview elsewhere" and demands the opposite of blind loyalty to the company. They provide compensation at the top end of the spectrum and if employees want to go they let them (at least as far as I can tell from reading the article).
Where are you seeing the demand for "loyalty"?
"Our compensation philosophy helped a lot. Most of its principles stem from ideals described earlier: Be honest, and treat people like adults. For instance, during my tenure Netflix didn’t pay performance bonuses, because we believed that they’re unnecessary if you hire the right people. If your employees are fully formed adults who put the company first, an annual bonus won’t make them work harder or smarter. We also believed in market-based pay and would tell employees that it was smart to interview with competitors when they had the chance, in order to get a good sense of the market rate for their talent. Many HR people dislike it when employees talk to recruiters, but I always told employees to take the call, ask how much, and send me the number—it’s valuable information."
She says they paid market rate and no bonuses. She emphasizes here and elsewhere in the article the importance of hiring people who put Netflix first.
She was also devastatingly "moved on" herself: http://www.npr.org/2015/09/03/437291792/how-the-architect-of...
Encouraging employees to interview elsewhere seems to be the exact opposite of demanding loyalty. To my mind it is like saying "we are willing to compete for your loyalty"
If you look elsewhere in this thread it is estimated that senior engineers tend to make $400k ... which is 400% of the 75th percentile of the Canadian wage http://www.jobbank.gc.ca/report-eng.do?area=9219&lang=eng&no...
No bonus doesn't feel like quite as big a deal if you're paid a base-rate of many times more what a bonus would be.
I understand that salaries in SV are higher to begin with, but $400K is likely in the 200% range right?
That doesn't feel like demanded loyalty so much as loyalty purchased at a fair price.
I've been on a PIP. It was a place with an "up or out" mentality as a legit part of the business culture. The only mistake they had made was not being brutally honest about that when I'd gone there in the first place. And some of that was probably on me. You either went into essentially program management or out. I'd been looking for a job for about a year before I got laid off. It was disruptive, but it was for the best.
I could have gone for a Masters degree and possibly stayed, but towards what end? I'm already "overqualified" as it is. The logistics of that alone meant 120 mile round trips and there were actual financial risks involved.
Nearly everybody in the hiring cohort I was part of was let go.
I'd actually told a boss, face to face, that I wanted to stay technical - that my value-add wasn't in the more... clerical emphasis they were trying to pivot me to.
I worked a few contracts after that and made some of the best networking contacts to date. This worked out just fine.
Maybe Netflix could have figured out a way to make it work, maybe not. You pays your money and you takes your chances. They took a way out and at least ended it. The only thing that is suspicious about the story is that she wasn't perceived to be of value to the new automation scheme ( which I presume is the legendary Chaos Monkey ).
The phrase that ticks me off the most is "fire fast". Like seriously? You spent all this time on hiring the best candidate and now are going to get rid of them fast because they don't pass your smell test? I think many experienced/older people in tech have been burned by this at some point, and it makes them vary of working for startups.
But there are exceptions. I have a friend who is fairly senior ... he quit a cushy corp job for a well funded startup. My friend was working like crazy for some interim deadline .. the CEO saw what he was doing and said "this is a marathon, not a sprint. don't burn yourself out". Now, that is the kind of leader you want in a company. Hire self-motivated and technically competent people and realize that employees are humans. Tech is about speed but as an industry, we are letting quality and humanity slip in favor of speed. And that is wrong and foolish IMHO.
There's always a missing subtext to something like this - this really does have a "John Henry and the steam drill" feel to it. "Chaos Monkey is now the story. You are not of the body. GTFO." Bummer, man :)
I love your last paragraph. The Thing is the only one what knows when it will come to be. Over-grinding is a definite anti-pattern.
There is probably not a general theory of this - it's just going to be wrong a lot.
Sounds like they were loyal to her.
But I agree, none of this works without 2 way loyalty.
That said, there is a lot of good stuff in this article. Getting rid of formal vacation policies, not using performance bonuses as a motivator, relying on people to be adults instead of on HR.
Bonus for example: studies show that people are not motivated by performance bonuses. At least for professionals, compensation is a retention issue, not a productivity issue: high performers will be resentful if his buddy at another company is paid more for the same work.
They're in the exact same category of stupidity as combined sick and holiday days. It looks great on paper, until your office perpetually has sick people in it because no one wants to burn a vacation day.