‘Netflix fires employees with adequate performance’: What Reed Hastings said on platform’s success

Here are top five reasons why Netflix is a success according to Reed Hastings:

1. Team but not family

Netflix aims to fill each position with the best person based on how well they can be a team player, Reed Hastings said. He said that this is “the energy driver because everyone around you is amazing, you learn so much, you attract other amazing people.”

2. Saying bye often

Reed Hastings said, “The reward for adequate performance is a generous severance package. We want people to feel like, ‘I’m trying really hard and I’m gonna give my all and if it doesn’t work out, I’ve got a parachute.’”

The company offers a minimum of four months’ severance in the US and above-average packages in other countries, he said, adding, “The fact that there’s a big severance package makes it easier for the manager to cut that person and try to find someone else who will be a rock star in that role.”

3. References please

Netflix makes sure to call the references that prospective candidates provide. Reed Hastings said that the process begins with a LinkedIn search for mutual connections. He added, “When someone’s on Zoom they’re much less likely to lie to me. I can ask a couple questions and they don’t feel like it’s being recorded and so it creates an appropriate intimacy but also a semi-anonymity.”

4. Keeping or letting go

Netflix pushes managers to take “keeper test” once every quarter or so, he said, adding, “If we wouldn’t fight to keep someone, we should proactively give them a generous severance package and try to find someone that we might well fight to keep.”

5. Remain open and honest

Reed Hastings said that for him “to disagree silently is disloyal.” He added, “Sometimes if to help them grow I’ve got to be willing to argue with my manager, then that’s okay.”