The cover of the July/August issue of Harvard Business Review (HBR) makes a bold yet astute assertion: “It’s time to blow up HR and build something new.” Sign me up.
It’s no secret that I loathe so-called conventional wisdom on anything. And, the modern human resource function at most companies is teeming with wisdom that’s stale, hackneyed and does little to advance the bottom line. In fairness, HR professionals mean well. By design, most have very little interaction with core business functions. Additionally, they’re tasked with having tough conversations when it’s often too late to impact the game. So much of the function has evolved to serve a purely legal purpose. It doesn’t have to be that way.
Netflix does it better. The same folks who lure us into binge watching House of Cards and Orange is the New Black have developed a superior approach to HR. Back in 2007, Netflix wrote what Facebook COO Sheryl Sandberg has dubbed “one of the most important documents to come out of Silicon Valley.” That bare bones document is 127 pages of Powerpoint goodness, nothing short of a manifesto for those of us who make things happen.
To read more, click here: https://hbr.org/2014/01/how-netflix-reinvented-hr
The centerpiece of Netflix’s approach is hiring “A” players. I know, I know…that’s a given, right? Not really. Today’s standard business organization is structured like the classic bell curve with the expectation that mediocrity prevails, and exemplary performance is in short supply.
Conversely, Netflix recognizes that acquiring the best employees money can buy is transformative. One A-level player can often do the work of many mediocre and/or sub-par players. Therefore, it stands to reason that a company full of “A” players is a smaller, more productive organization.
Moreover, “A” players not only have the absolute best skill sets, but they’re also fully formed adults. They act reasonably and always with the company’s best interest at heart. They don’t need a 200-page employee manual to define the company’s best interest. They’re the same people that don’t need to be reminded on deadlines, how to be collaborative or when not to take a vacation. They just get it. Netflix recommends that managers pose the following “keeper test” to identify “A” players: which of my people, if they told me they were leaving for a similar job at a peer company, would I fight hard to keep?
HR professionals spend significant time on employee morale programs. This includes everything from providing premium coffee to organizing employee carnivals to hiring on-site personal chefs. In a culture of “A” players, the caliber of player IS the perq. This is the same as an athlete like J.J. Watt preferring to play with the best players in the NFL rather than have his favorite flavor of Gatorade on the sideline. As Netflix eloquently puts it, “Great workplace is stunning colleagues.”
Here are five additional pointers from the Neflix playbook on creating a distinct culture where “A” players thrive:
- Give Generous Severance Packages. As part of evolving to an “A” player organization, you have to be willing to let go of employees whose skills don’t fit. That also applies to those people who have contributed historically and no longer fit the organization’s current needs. Awarding generous severance packages helps eliminate the emotion for everyone, and it gives people a positive and practical reason to move on.
- Eliminate Performance Reviews. Communication about performance between managers and employees should be organic. Conventional performance reviews are outdated, and they do little if anything to improve employee performance. Instead, consider implementing company-wide 360 reviews which tell an employee what her colleagues (supervisor, peers and direct reports) think of her and how she can improve. The companies with the highest performing and most collaborative cultures do these face to face rather than anonymously.
- Eliminate Performance Bonuses. It’s blasphemous, I know. But, most employees don’t know what factors drive their bonus and how they can impact it. If you’re disciplined about hiring “A” players and paying them at the top of the market, the performance bonus is unnecessary. “A” players play at the top of their game every day because it’s how they’re wired. A bonus doesn’t impact their performance.
- Emphasize Freedom and Responsibility. Cultures populated by “A” players don’t need incessant policies to govern behavior. For example, Netflix doesn’t formally track vacation for its employees. Their expense policy reads, “Act in Netflix’s best interest.”
- Don’t Tolerate Brilliant Jerks. Everyone knows at least one brilliant jerk. Maybe it’s the guy in your organization who’s been the number one sales person ten years in a row. He’s the definition of a rainmaker, but nobody can stand to interact with him. And, his emails…the epitome of obnoxious. Brilliant jerks are an enormous threat to high-performance, collaborative cultures. Resist them.