Netflix’s 5,400 employees are encouraged to give blunt feedback to one another online, in person — and, on occasion, over dinner.
The Wall Street Journal’s Shalini Ramachandran and Joe Flint spoke to more than 70 current and former Netflix employees for a report, published Thursday, on the company’s radically transparent work culture.
Not much is kept under wraps at the company. Higher-ups, including directors and executives, can view the salary and pay history of each employee. Workers use a software called “360” for annual reviews — they can review any employee at the company, including CEO Reed Hastings. Some executives choose to share their 360 feedback with their teams.
And teams sometimes do a version of these reviews in person.
Some teams at Netflix have dinners or lunches where coworkers take turns giving feedback or criticism to others sitting at the table, Ramachandran and Flint reported. Executives call it “real-time 360.”
“It can be intense and awkward,” Brandon Welch, a former talent executive, told The Journal.
Employees are encouraged to be as forthcoming as possible with feedback, and managers are expected to be honest about any skills needed. One of the most intense examples of this transparent culture is the “keeper test.”
Netflix’s company-culture webpage says: “We focus on managers’ judgment through the ‘keeper test’ for each of their people: If one of the members of the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving?”
Business Insider’s Nathan McAlone previously reported that those who don’t pass the test are given a severance package and dismissed. The Journal report said Hastings even used it to decide to fire his product chief and friend who had spent 18 years at the company.
The Journal said some managers felt pressure to fire people or risked “looking soft” to other executives.
Last year, Netflix’s involuntary departure rate was 8% rate, above the 6% US average, The Journal reported. But Netflix said it had an 11% annual turnover rate, lower than the 13% average for tech companies.
Netflix disagreed with characterizations of its culture as harsh, noting to The Journal that it ranked second on Comparably’s “Happiest Employees 2018” list.
In response to The Journal’s article, Netflix told Business Insider’s Travis Clark in a statement:
“We believe strongly in maintaining a high performance culture and giving people the freedom to do their best work. Fewer controls and greater accountability enable our employees to thrive, making smarter, more creative decisions, which means even better entertainment for our members. While we believe parts of this piece do not reflect how most employees experience Netflix, we’re constantly working to learn and improve.”