In 2009, Netflix released a slide deck called “Netflix Culture: Freedom & Responsibility”. The slide deck quickly went viral, with thousands of organizations reviewing their performance and HR policies, and millions of people watching Netflix’s next move. But why was this slide deck so revolutionary? Netflix took a completely different approach to managing and rewarding its employees, giving employees more control, freedom, and responsibility as long as they achieved their goals.
At Netflix, hard work isn’t relevant. Employees aren’t measured by how many hours they spend in the office, or how long it takes them to complete a project. Instead, they are measured on results: did the employee achieve the expected result, on budget and on time? Exceptional performance, despite minimal effort, is rewarded. Substandard performance, despite maximum effort, is not. This attracts Type A people who are interested in expending less effort for better results. The slides explicitly claim that “our high performance culture is not for everyone” (McCord 38). Netflix is creating a culture where they want to hire people Type A people, and Type A people want to work for them.
Netflix also recognizes the illusion of control. As organizations get larger, they attempt to put more control on their employees. Netflix, on the other hand, attempts to give their employees more freedom and more responsibility for their work. For example, the company no longer tracks vacation or the number of hours worked by employees. Neither of these metrics are relevant to employee or company performance. Employees can take unlimited vacation days and come in and leave the office at any time, as long as they complete their work effectively. Benefits, pensions, 401(k) matches, etc. are not provided by the company—they prefer to give their employees big paychecks, and the freedom to do what they want with their own money.
Netflix is a company that takes a hands-off approach to management, and has continually exceeded shareholder expectations by giving employees more freedom and responsibility. The company has been able to disrupt the entertainment industry, expand their presence into a Fortune 500 company, and now gets other large organizations to reevaluate their HR policies. Their principles and practices reflect the IMT ideas of no control, alignment, and minimal effort. According to the Netflix talent acquisition team, “the best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people” (McCord 80). Netflix is just one of many examples on how removing rules and aligning employees with their interests can lead to a company that’s very successful in their industry.