Our article, "How Netflix Reinvented HR" by Patty McCord describes how Netflix has taken classical theories of organizational behavior and reinvented itself to work in a modern society. Patty McCord, the former chief talent officer of Netflix, learnt through years of experience that their company's approach to talent and culture worked for two reasons; success and common sense. Patty describes five key ideas that defined the way the company attracted, retained and managed its talent efforts.
The first key idea was to "hire, reward and tolerate only fully formed adults" (McCord, 2014). One of Netflix's mantras was, "hire only 'A' players to work alongside them. Excellent colleagues trump everything else" (McCord, 2014). The company learned to rely on logic and common sense rather than formal policies for better results, at lower costs. Their goal was to hire skilled employees that would move them forward. Which lead to another key element is the company's philosophy, "If we wanted only 'A' players on our team, we had to be willing to let go of people whose skills no longer fit, no matter how valuable their contributions had once been" (McCord, 2014).
The employees that were discharged were offered rich severance packages. To reward their employees, the company allowed standard paid-time-off policy, which worked on an honor system. If employees needed time off, they were required to remember when they took time off. Along with the time-off policy, Netflix departed from the formal travel and expense policy and decided to keep the policy in five short words, "[a]ct in Netflix's best interests" (McCord, 2014). This created a clear expectation of responsibility that they wanted from their employees.
The second key idea was "tell the truth about performance" (McCord, 2014). Instead of having formal performance reviews, they were asked to...