Netflix separated pay and performance. Your performance was evaluated all year, and if you weren't a top performer, you were let go. In the spring we would do 360 reviews, where anyone could write a review of anyone else, to give candid feedback (although giving candid feedback was encouraged all year, but this gave you a formal outlet to do it).

In the fall, your pay was evaluated (and kicked in at the new year). You were paid on the assumption that you were a top performer (otherwise you would have already been let go), so they would adjust you to "how much would we have to pay them to get them in the door today". They needed data for that calculation.

One source of data was how much they had to offer new hires to get in the door. A second source was industry salary surveys. And a third source was your offer letters from other companies, if you chose to share them. If you get a huge offer elsewhere, they would maybe match it, or maybe tell you that you're better off going to that other offer.

It also served another purpose. It gave you a chance to look at that other offer (assuming you could get one) and really thing about whether you still liked your job at Netflix enough to stay. They wanted people to be happy about continuing to work there, and were supportive of you leaving if you weren't happy, because they know you do your best work when you enjoy it.

FWIW, my raises at Netflix were typically 20%+, and so were a lot of people, because they economy was on fire at the time.

>if you weren't a top performer, you were let go

If "top performer" is defined as, say, 90th percentile, does that imply >90% turnover?

No, not at all. You didn't have to be a top performer at Netflix, you had to be a top performer industrywide. Netflix basically tried to keep only people who would be rated as top performers at other companies.

Think of it like a sports team (which is how Netflix always described it). They wanted the best people in the league.

Didn't it make you feel as though there was a target on your back constantly? What happens if something in your personal life results in you having a bad quarter?

Yeah that sounds like a nightmare. Then again, I'm only a solid B+ (grading scale, not language) engineer and I'm happy with that. I'll let the gunners take the target-on-back jobs.

Btw, can Netflix please put some of that capital in to better programming, or at least in to adding a "Delete + never show me this or anything like this every again" button. Platform is a pile at this point. No offense

This has “grade inflation at Harvard” energy. It does seem reasonable to me, but at the same time you can see how it’s a little ridiculous.

Did you use that 700K offer for increasing the salary at Netflix?

I've heard about the culture of fear at Netflix - was this your experience as well? Who decides whether you are a top performer or not - only the manager, or the peers as well? Do they use stack ranking? How is the performance deduced, e.g. by nbr of commits? Thanks!

I took the offer to them and got a nice raise, but not to $700k. :) In part because the offers weren't comparable. Finance is usually a modest base and a huge bonus, Netflix is straight cash.

> I've heard about the culture of fear at Netflix - was this your experience as well?

At first yes. But you quickly realize that in most cases only the underperformers were let go. In cases where good performers were let go, it was usually by a bad manager, and then that manager would get let go and they would sometimes even offer the other person their job back (but they usually already had another one).

> Who decides whether you are a top performer or not - only the manager, or the peers as well?

You manager has final and single say on both hiring and firing. But they always ask for input from others as a matter of course.

> Do they use stack ranking?

Absolutely not. Stack ranking is the opposite of what Netflix believes. They operate on the assumption that if everyone were stacked ranked, everyone would be in top rank. Stack ranking is evil and a terrible way to run a company if you use it for determining compensation or firing.

> How is the performance deduced, e.g. by nbr of commits? Thanks!

Haha no, no metrics like that. It's much more holistic. Are you getting good work done, are you making a positive difference. Managers are pretty in tune with the work getting done. Most come from engineering backgrounds and at least understand the work being done by those that report to them. They also can see all the feedback in the annual feedback session. It becomes pretty obvious who is not performing.

> In cases where good performers were let go, it was usually by a bad manager, and then that manager would get let go

I guess this is rare - the detection of such cases, since the bad manager's manager has to be aware. Also, the holistic evaluation makes things hard to argue - subjective opinions prevail.

Thanks for sharing! The focus on paying top compensation is very different from anywhere I've worked.

I've never seen it anywhere else either! It was one of the many things I loved about working at Netflix.

I found this conversation pretty interesting. Where are working now if you don't mind sharing?

Netflix would increase the salary of employees if they had higher offers. This idea is supported by Reed Hastings and IIRC was mentioned in https://www.norulesrules.com/. To get a raise, you are encouraged to get a job offer with that salary to prove you're worth it.