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Netflix employees don’t have to meet or exceed expectations as part of a formal review. But they do need to prove they’re worth keeping.
The streaming company is now well known for its keeper test, where management must decide whether employees are worth keeping. On the “Pragmatic Engineer” podcast, CTO Elizabeth Stone described how these tests — along with promotion and compensation evaluations — replace traditional performance reviews.
“We don’t have formal performance reviews,” Stone said. “The way we approach it at Netflix is first trying to get to something that looks like continuous, timely, candid feedback.”
A constant flow of feedback doesn’t have to be negative, Stone said.
“If we’re living the Netflix culture well, that’s something that would be familiar and comfortable every day of the year,” she said.
Netflix is one of many companies ditching the traditional performance review structure. In 2023, Twitter founder Jack Dorsey told Block employees that the company would start “constantly evaluating” employees so that they could “part ways without delay.” Ongoing feedback is also popular with small businesses.
At Netflix, Stone said that the company has a “safety net” of an “annual 360 process.” During this period, employees interface with managers to set goals, she said.
“It’s not structured as an evaluation,” Stone said. “It’s structured in the context of feedback that helps people improve.”
There are two other moments that have “performance flavor,” Stone said, but are not formal reviews: evaluations for compensation and promotions.
“You naturally talk about performance as part of thinking about someone’s personal top of market, which is our compensation philosophy,” Stone said.
Then there are Netflix’s keeper tests, the company’s cutting metric for retaining a talent-dense team. Cheick Soumaré, a former Netflix HR director, told Business Insider that cutting low performers helps maintain morale among high achievers.
The keeper test previously asked: “If a team member was leaving for a similar role at another company, would the manager try to keep them?” If the answer was no, Netflix said it would cut the employee and offer them “generous severance.”
Recently, Netflix reworded its policy and added a disclaimer explaining that the keeper test may “sound scary,” but that Netflix encourages constant communication with managers to “avoid surprises.”
On the podcast, Stone said that there are checks and balances for managers who are conducting keeper tests, and that the tests can also be a two-way street.
“There’s a keeper test that goes from members of their team to their managers,” Stone said. “Do I want to stay? Am I excited about the work that I’m doing?”
The keeper test provides yet another way for employees to ask for feedback, Stone said. “Ideally, we do that in a way that feels like normal course of business,” she said.
Read the original article on Business Insider
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