Coaching & Leadership

Netflix: Review and chill

Arne Van Damme

COO at intuo

We don’t have to elaborate on who or what Netflix is. The multinational entertainment company already made a name for itself worldwide. They did so not only by providing attractive media and video content but also by transforming their famous catchphrase ‘Netflix and chill’ into an actual pastime. And even though they're a fairly young company, founded in 1997, Netflix already made some significant changes in their performance management strategy!

This coaching culture does not only benefit the company but also the wellbeing of every individual.

Making the right changes

So Netflix is a company that already implemented several innovative elements in their performance management approach. And yet they felt that there was (as there inevitably always is) some room for improvement. You see, they also were one of those companies that still held on to the formal review system and only set annual objectives for their employees. Another thing that could also use an upgrade, was their feedback system. So what Netflix did was implement a new process in the following three performance domains: Hiring, salary, and conversation.

Hiring the right people

The first thing that Netflix introduced was a new hiring policy. They changed the setup of their job interviews so they are conducted by the people who would actually work with the job candidates. This way, they can immediately assess if the applicant is qualified for the job, but also, more importantly, if there is a cultural fit. Netflix recognised the importance of creating a good team and not just hiring skilled individuals. One of the most frequent reasons why people quit their job or leave a company is a bad fit with the values of the organisation. This can lead to a lot of turnover and costs for the organisation. The fix for this is rather straightforward. By letting job candidates interact with the people they would have to work with on the job frequently, Netflix is enhancing their recruitment process and thus potentially saving a lot of money by avoiding hiring mistakes.

Rewarding the right way

They have also made some adjustments to their rewarding framework. According to the leading visual entertainment company, annual bonuses are not contributing to harder or better work. Netflix knows what their employees are worth when they are hiring them, so they offer a salary that is in line with their market value. This way, the employees do not feel cheated and feel appreciated from the start. On top of this, employees are given the option to choose in which form they would like their compensation. Opting for a portion of the equity of the company is a possibility. This transparent and honest approach to their almost 4,000 employees helped Netflix to get where they are right now: Dominating the online streaming market.

Using the right review procedure

Even though we live in a time where we share everything on social media (our love affairs, what we had for breakfast, pictures of setting suns and sleepy cats, etc.), we’re still having trouble sharing direct feedback with each other. Netflix used to work with anonymous feedback among their employees, but this turned out to be very ineffective.

In addition to this, ranking people and assigning numbers linked to their performance didn't lead to better insights as well. Especially when you only disclose them to the employees at the end of the year. Two major reasons as to why Netflix decided to give their feedback and review procedure a complete make-over. Team members and team leaders at Netflix now have coaching conversations on a more frequent basis in a more honest and informal manner, which delivers better results. People's performances get addressed when the time is right or as close as possible to the behaviour that requires the feedback. Which, logically, yields much better insights instead of waiting for the official moment that could be planned months from now.

This coaching culture does not only benefit the company but also the wellbeing of every individual. Because their managers have a much better understanding of their situation, employees no longer have to stress about certain performance snapshots determining the whole picture. They already know what the one-on-one will be about and where they can improve. So they can just have a productive "review and chill."