If a company told you that you can take a vacation whenever you want, and for however long you want (paid of course), what would you say ? Unbelievable ? There can’t be a company like that ? Think again. There is a company like that. And a pretty successful company, so far. Welcome to Netflix.
Their logic is simple. People act responsibly when given the freedom. After all nobody tells you that you have to work for more than 8 hours; or on weekends. And yet you do. Netflix says if its not monitoring exactly how many hours you work in a day or how many days a week, why should it “monitor” how many days vacation you take. Interesting point of view, eh?
Netflix’s presentation called “Reference Guide on our Freedom & Responsibility Culture” found its way into the internet. Click here for a fascinating read. It’s a 128 slide long presentation – but don’t be intimidated by the size. These are simple slides and a quick read. Every company would do well to read it.
Here are some interesting aspects of their culture that makes you think
- Increase employee freedom as you grow. As companies get bigger, they add complexity and a plethora of rules and procedures get formulated. Netflix says that as they grow, they consciously try to give more freedom, and not chain people.
- Their policy on travel and entertainment – “Act in Netflix’s best interests”. That’s it. No 100 page policy document detailing entitlements. No checking of expense statements.
- Every year each employee's pay is reset to the market (whatever it takes if he were to be hired afresh). No % increases.
- Almost all salary is fixed. No bonus pool. Pay is not dependant on company’s performance.
A very interesting point of view. I am so struck by reading this, that I intend to post on company culture and HR policies all week.
Their logic is simple. People act responsibly when given the freedom. After all nobody tells you that you have to work for more than 8 hours; or on weekends. And yet you do. Netflix says if its not monitoring exactly how many hours you work in a day or how many days a week, why should it “monitor” how many days vacation you take. Interesting point of view, eh?
Netflix’s presentation called “Reference Guide on our Freedom & Responsibility Culture” found its way into the internet. Click here for a fascinating read. It’s a 128 slide long presentation – but don’t be intimidated by the size. These are simple slides and a quick read. Every company would do well to read it.
Here are some interesting aspects of their culture that makes you think
- Increase employee freedom as you grow. As companies get bigger, they add complexity and a plethora of rules and procedures get formulated. Netflix says that as they grow, they consciously try to give more freedom, and not chain people.
- Their policy on travel and entertainment – “Act in Netflix’s best interests”. That’s it. No 100 page policy document detailing entitlements. No checking of expense statements.
- Every year each employee's pay is reset to the market (whatever it takes if he were to be hired afresh). No % increases.
- Almost all salary is fixed. No bonus pool. Pay is not dependant on company’s performance.
A very interesting point of view. I am so struck by reading this, that I intend to post on company culture and HR policies all week.
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13 comments:
so a week long line up of some really interesting read is what im going to look forward to..
coming to ur post, Netflix's approach sounds normal and if they are acheiving what these 'relaxed' policies aimed to acheive then its fine..(im still to read the PPT).. guess everything should be done in moderation..because there are people who only want to exploit the loop holes and not appreciate the freedom..
@AJCL - You may be surprised at what people do when given the responsibility. My most rewarding experiences at work has been when I trusted and gave responsibility to people. Very rarely has anybody betrayed that trust and done something they ought not to have done.
Wonderful post Ramesh!! Going through the slides made me wish I was working with Netflix. Going to send this link to all in my office now, including the boss.
Just catching up on your blog after a 10 day vacation and the subsequent hectic week in office. Mailed you snaps from the vacation, by the way.
Thanks for sharing :)
Wow. What an approach! What I liked best about their nine behaviour and skills was courage--the freedom to say something you believe in even if its controversial. Does it ever happen in companies?
Really good post.
Cheers
preeti
General rule - Larger the company, the more 'process' oriented (read - crap being doled out) it becomes. In any large organization, people are reduced to numbers and the great "culture interventions" and 'people connect' initiatives are checklists for some boffin in HR to tick and puff up his chest at the end of the year. Companies like netflix do exist and work on the simple premise that many people would do well if given space.
kiwibloke
PS: I saw thru the 128 slide presentation - awesome!
Red rag to a bull, you mentioned that you are going to write about HR all of this week. That's one function I love to despise (Hate is politically incorrect)
kiwi
This is so cool!!!! I wish I work for such liberal company and enjoy lot of chuttis:-)
Ramesh, I subscribe to Netflix and trust me they are really reliable! Now I know why ... they have the freedom to decide which way they must work and that can bring out the best in anyone! Good one this!
@Ajay - Thanks. Wonder what the boss would say . Saw your snaps. Lucky you ...
@Preeti - Yes some places do encourage it. I suppose it depends on the maturity of the leader.
@kiwi - OMG ; I'll dutifully make the rag very light red !
@Adesh - :)
@thoughtful train - Yes I believe they do very well. They can't exist in my country though where they sell pirated copies cheaper than what Netflix might charge for renting !
Through all the years I spent in Stratus COmputer (and Lucent Technologies after being acquired) I never ever filed a leave application, never had to report at a particular time, no one cared where I was or what I did as long as I delivered results. All I had to do was email my boss and tell him - it was a courtesy that was never asked for but always given because of the permissive nature of HR policy. In the French outfit, I got a shock when I told my boss I was going home because my wife had misplaced her keys, and his admin asked me to fill in a form for "Reduction du Tariff Travail". Apparently all managers had to do this. I leave it to you to consider which business culture produces the more innovative companies. In Stratus one of our topmost engineers lived in a log cabin in Vermont. Always reachable on the phone. One of the most productive guys around.
@ Dada - better statement of the case than my post. Btw what on earth is a Reduction du Tariff Travail. If you take a call after office hours do you also have to file a Addition du Tariff Travail ?!!
Its the law that states that all employees must work 35 hours.
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