Ask HN: Do you work in a company that will fire you for average performance?

[kisna72]

I heard in NPR today that Netflix fires people that are average and only keeps those that are exceptional. Does any one have any experience working in such a company? When I heard about netflix, it seemed like life would be very stressful if you always have to worry about getting fired. But on the plus side, you get to learn a lot and work with exceptional people, which is a great way to learn. ANy experiences or opinions?

[Delmania]

In general, performance reviews are great in theory, but fall down in application. Theoretically, a review is a time to talk about the great work you did, what you learned, and what your goals are. Your manage can respond will honest feedback and a merit increase.

The reality is reviews are a part of a process, and your rank in them depends in part on the quota set by HR. Most of the time, HR wants employees to fit within a bell curve for rankings. In some extreme examples, people's reviews were based on a predetermined track and not on actual performance.

Netflix's policy is just HR marketing. If all you do is keep your 4 and 5, then what makes those people 4 and 5 will start to become 2 and 3. It's a moving goalpost, and sounds like an effort to increase productivity without increasing compensation.

I may be jaded.

[ssharp]

If you fire all the 1's, 2's, and 3's, you have to hire people to fill in those positions. And in one year, the whole group gets re-evaluated, including the new hires. I'd think it would take quite a few cycles before the people who were 4's and 5's became 2's and 3's, while maintaining their same levels of productivity.

I think GE was well known for doing a similar practice under Jack Welsch and they still had plenty of long-term employees. I don't think the system is particularly desirable though.

[yuhong]

Personally, I think the idea of turning "performance" into a number is just fundamentally flawed. Giving the same salary to an entire team is a better idea

[rhino369]

I work in a law firm that will fire great attorneys. It's part of the big law business model. Up or out and very few get up'd into partnership. So eventually you get fired (after 8-12 years depending on firm.)

So I know eventually my ass will get fired. It's just a matter of when.

I don't really understand it. But it's how the industry works.

Edit: 8-12 is for unambiguously great attorneys. A lot of decent attorneys get shown the door after 4-6 years. People who can't hack it (usually because they won't put up with be worked like a slave) will only make it 2-4 years. A lot of people quit.

[brianwawok]

At 8-12 years do you get paid more than a new hire? Seems a "good" way to keep costs down, having the bulk of work done by the new guys - and a few partners to oversee everything.

The downside is the average experience of your employee is going to be a lot lower, but that must not be the top goal of the law firms that employee this.

[gadders]

So Suits is more true to life than I realised..

[rayiner]

On the flip side, it seems pretty hard to get fired in the first few years (as opposed to laid off in a downturn).

[msh]

What is the carrer path then?

[throwawayyahoo]

Each quarter Yahoo employees are rated and placed into one of five categories: misses, occasionally misses, achieves, exceeds, greatly exceeds:

http://pastebin.com/KEQjYynr

A number of my boss's reports had landed in the achieves category for all of 2014, but nonetheless received a communication from HR this past April that they were in the bottom 5% of the company for 2014 and at risk for termination if their performance did not improve. This surprised my boss and the reports.

Obviously if you're in the bottom 5% you're well below average. The question is how you can consistently be ranked in the middle category yet nonetheless be in the bottom 5%. That would seem to make the quarterly ratings a rather pointless exercise for communicating to employees what their ongoing performance is.

[plonh]

>Obviously if you're in the bottom 5% you're well below average.

This is not true.

If the bottom 50% are all very close in absolute performance, you get exactly the situation described, which is exactly the steady state of the process you desribe. The process is working too well.

[michaelochurch]

[flagged]

[sjbase]

I worked in a company like that. Everyone was ranked against their peers, and if you were below ~40% more than two years in a row, you were "counseled out."

I didn't find it stressful. Partly because I was never in danger, and partly because I knew what I was getting into. But I think it's a bad practice, mainly because it just doesn't work. Empirically what I've observed is a bunch of people in the wrong role, not the wrong company.

It's expensive to fire people: companies could save a lot by making lateral moves easier, and doing better internal matchmaking. As in matching people <--> responsibilities, not like... dating :).

[plonh]

How did you find enough new hires to replace the massive attrition? Or did high achievers alternate between working hard and slacking off?

[shawabawa3]

Imo it's just marketing.

They want to be known as a place where only exceptional people work in the hopes that they'll get higher quality hires.

In reality they'll fire people for the same reasons any other company does

[ams6110]

All our programmers are above average. LOL. Garrison Keillor maybe helping with their PR?

[zerr]

Well, they miss a lot of higher quality experienced people (many with families) who just don't apply at Netflix because of this high turnover and risky experience.

[overgard]

I have a theory that the talent level at most companies has almost nothing to do with ridiculous HR policies, but rather two things:

1) Project/Field 2) Name brand recognition

The game industry has a lot of overqualified people on very poor salaries in poor conditions because games are sexy. Google has both sexy projects and name brand recognition, which allows them to recruit top level talent despite the fact that their interview process is absurd and frankly, pretty insulting to qualified professionals (can you imagine doctors or lawyers going through similar processes?). Reason being, having google on your resume opens a lot of doors, and there's a chance you get to work on something really cool.

So I don't know anyone that works at Netflix, but I would believe they have mostly above average engineers not because of this bizarre practice of firing "average" people, but because they have enough recognition to find above average people in the first place.

[analog31]

But on the plus side, you get to learn a lot and work with exceptional people, which is a great way to learn.

Exceptional at politics and boss management.

[rhino369]

That certainly colors the year long parental leave program Netflix just rolled out.

Yea take a year, no problem!

But remember, we fire average people! Do average people take a year? You decide for yourself!

[thearn4]

"average" with respect to the company, or the population of programmers as a whole? If normally distributed and sufficiently large, you'd be getting rid of half your company under the former. The latter seems like a tough thing to measure to begin with. I can't imagine either really being the case.

Though it does sound somewhat similar to the concept of "stack ranking", which a few companies (such as MS) are notable for having used as part of their annual review process in the past.

Stack ranking has always sounded to me like an absolutely poisonous thing to implement in an otherwise healthy office. But if the organization knows that it needs to implement a reduction in force regardless, then I guess it might make sense if management does not have a feel for who their best engineers are.

[Bartweiss]

This hints at a pretty interesting analysis of whether this benefits companies.

If you fire anyone below "market average", you can reasonably expect to sustain an above-average workforce as long as you compensate well enough to retain decent employees.

If you fire anyone below "corporate average", the results are more interesting. You'll bring up the average quality of current employees, but have to backfill the missing employees.

If your hiring is just a normal distribution on average skill, the result is that you quickly reach diminishing returns. You fire the vast majority of your new hires every year, while slowly turning over a few of the old ones in favor of new superstars. If your hiring is better than average, though, you can reach far high equilibrium points. In effect, it makes sense to fire all the employees up to your hiring midpoint, trusting that you can efficiently raise your average quality by doing so. After that, you'll have to cycle through too many employees per position to see speedy improvement.

Of course, all of this is crippled by training delays and the problems you'll face when "we fired half the employees last year" gets around. Interesting theoretical model, though.

[brudgers]

The advantage of stack ranking is that it's a formal process, and one in which managers' behavior is more measurable and reviews are definitively scheduled. It also aligns employee churn with performance to some degree, moving weaker hires out and encouraging better hires to stay, again via a formal process.

What it reduces is the tendency of less formal processes to give raises to those who ask and to stiff those who don't and to throw up the "your salary is confidential". All those things it avoids are known to create a high potential for bad company culture and moral.

[sixtypoundhound]

Stack ranking is a solution to a larger problem, which is the issue of growth in overall "size of the tribe" and political networks that shade / obscure / fabricate performance views.

By the time you're stack ranking, you're deep into large company territory... dealing with the above issues.

Medical equivalent: People taking cancer drugs have a higher than average likelihood of dying. However, that's probably a function of having cancer vs. the performance of the drug.

[kisna72]

I think you make a good point about how to define average. I am not sure what the npr people meant when they said average. I was assuming industry average. However, the questions then is - if the managers are used to seeing only high performance engineers, how do they gauge whether the engineer is really average performer. It seems like managers subjective views and their biases would matter a lot.

[bsg75]

If you eliminate the "average" segment of your staff, then the "exceptional" team members become the new average, and you terminate the next average group, you eventually wind up with one - maybe two.

[Eye_of_Mordor]

If you eliminate the "average" segment of your staff, then you fire good staff next time around.

Alternatively: if you eliminate the "average" segment of your staff, then you fire their "average" replacements next time around?

[Spoom]

The idea is that the exceptional people now need to become more exceptional later.

[rm_-rf_slash]

I work in academia, where things move slowly. When lag is expected, turnover is expensive. Also, it being a university, my employer is much more concerned with educating us and broadening our skill sets, rather than discarding employees like a half-eaten slice of pizza that didn't quite have as much pepperoni as you wanted.

[iimpact]

Looks like Intel sure does...

https://www.reddit.com/r/cscareerquestions/comments/3fvss3/r...

[johngalt]

Have you ever met someone who was a hobbyist or amateur engineer at best, but always has grand ideas about how things should work? But has no idea of the type of investment or execution it would take to pull off. That is what I think of whenever I hear management strategies like these. It is like the management version of the compost fueled cars guy:

https://youtu.be/DkGMY63FF3Q?t=10s

Deciding that you only want the best people is easy. Is there really a business out there who decides they want terrible staff? Determining who those people are is extremely difficult. Even if you are successful in identifying the best people, can you keep them? Whenever I find exceptional people, it takes more than 'not firing' them to keep them.

More realistically. Policies like these aren't designed with any idea of identifying or retaining talent. Instead they are usually a means to affect work culture. Like grading on a curve. It makes everyone work harder.

[ChuckMcM]

I would be worried that it make performance management of managers difficult. Which is to say a manager who fires people as a way of preventing themselves from being fired. The trick being "Yeah, last quarter did kind of suck but we fired that loser Bob, this quarter will be great." In fact there are a couple of reasons why the quarter was poor, it could have been poor Bob but it could also be the manager isn't cutting it. Unless the group has the option of voting the manager out of the organization, the whole "save the best, fire the rest" algorithm has problems. Or more accurately it has a blind spot with respect to management.

The interesting question for NetFlix will be how durable it will be as a structure. My impression is that it selects for the wrong attributes in management. But time will tell.

[brudgers]

Because there is a structure, I suspect stack ranking makes it easier to identify empire building. Highly ranked individuals should exhibit behaviors that correlate with their high ranking such as moving to more challenging work within or without the team and company. High ranked individuals should be the sort of people that the next couple of layers of management are aware of because they create value and solve hard problems. High ranked individuals should be the ones other managers are trying to poach sideways. High ranked individuals should be the ones that the manager relies on to explain technical detail to upper management layers. They should natural have a particular kind of visibility on email strings.

Any culture where a manager can explain away a bad quarter by blaming their underlings is already screwed.

[jondubois]

I think it's wrong. It creates an arrogant, elitist culture within the company. Also I don't think anyone in the world knows what an 'exceptional engineer' is - If there even is such a thing.

If you put too much pressure on engineers to produce lines of code, they will optimize for that at the expense of quality/maintainability of the project.

I have worked for a number of startups which advocated the practice of 'cutting corners'. I think it doesn't work in practice because technical debt tends to creep up on you much sooner than you think. Unless the whole company's future is hinging around meeting a specific deadline for a specific feature, then there is no excuse for cutting corners.

I think the personality of the engineer is much more important than their skills. I have worked at companies that fired people after the first month - This is ridiculous.

You wouldn't fire a business executive after 1 month on the job because of poor growth metrics - The downtrend is probably a flow-on effect from past periods of mismanagement. This is exactly the same in engineering. You can't measure the consequences of technical decisions until many months of even years after they are implemented.

While you might think you're firing 'bad engineers' - You are in fact just firing random engineers based on random events like market timing, which team they are part of, direction of the wind, phase of the moon, etc... Just chaos.

[PythonicAlpha]

The question is also very much, how performance is measured. I saw performance measuring that was on the level of "solved tickets" -- with some special cases: E.g. when you did all the research and somebody else closed the ticket (with minimal effort), it was his.

There where plenty of fraudulent abuse of this system and in the aftermath, I guess it would have been better to flip a coin!

In such a system, the performance measuring as such, is undermining the corporate culture.

[visakanv]

"Fire you for average performance" is a bit of a loaded term and implies a certain unfairness or vindictiveness.

I'd rephrase that to be– do you work in a team with uncommonly high standards? I'd imagine this to be the case at any cutting-edge company. Consider say, the special forces in any military. If you don't meet the grade, or you don't carry your fair share of the weight, you don't get to stay. That's just tha name of the game. I assume that this must be the case at all the exciting companies– Tesla, Google, Apple, Facebook, etc etc.

It's not stressful if the expectations are set in advance, and the precise conditions for firing are clearly stated, and you get the feedback and assistance you need to stay afloat.

I work with a small team that prides itself on being results-oriented, and I love it. As far as I can tell, everybody we hired is hired because they bring their A game.

I'd much prefer this to being a part of a team that "carries" people who don't perform.

Of course, we've all also heard horror stories by now of ridiculous young founders who come up with extreme ideas about productivity, 80-100 hour work weeks and whatnot. Sustainability is important.

[Simulacra]

My company will fire you for average performance. They do it quite pointedly. One day you're at your desk, and an HR rep with an armed security guard will come and get you. They'll escort you to an office, explain that you're being terminated, and remind you that you're an at-will employee. They'll give you some forms about insurance, and then the guard will walk you to the door. They do not let you clean out your desk. They not let you say goodbye to anyone. Sadly, this is the same procedure that my company uses if you give notice. They do not except two weeks notice. The same day you give notice, or perhaps a day or two later, you will go through this ritual.

To your point, I work for a sales organization. It doesn't matter if your performance reviews are outstanding. If you go more than a couple of weeks without results, the director of sales operations begin sending you nasty emails. Within a month after that, your escorted out the door.

This might be just the sales world, but at some point people deserve to be treated like human beings. Not like replaceable cattle.

[rwhitman]

The keyword you're looking for here is "topgrading". Basically it's management social darwinism that breaks down a team into "A Players" "B Players" and so on with the end goal being to weed out anything below "A-" by applying extra pressure on them until they either turn into "A players", or quit. Firing is a last resort. Netflix in particular is well known for encouraging people to voluntarily quit if they can't hack it.

The question is of course if all the "A Players" live and breath the company, voluntarily coming into the office on weekends, doing conference calls at 4AM etc - and you are the kind of person who values their family for instance, and wants a little work life separation, what score do you get? What happens if when offered a year long paternity leave, you actually take them up on it? How hostile will the environment be at the company when you return? Or what happens if you have a medical problem that impacts your job performance? And so on...

But, to answer your question... I once got sucked into a management overhaul at a company that used Netflix-style topgrading as justification for a wave of layoffs. The whole self-deportation aspect of it doesn't work very well - people dragging their feet in a job are often reluctantly there because they need things like medical insurance, have bills to pay and families to feed. Being able to just up and voluntarily quit a job because you're "not a good fit" is a luxury. So everyone who was a "B Player" (aka in a role that wasn't well defined) got put through hell for a month then fired, and then the remaining "A Players" lost morale and took up the voluntary quitting aspect. So basically it backfired into brain-drain and a chronic "A Player" retention problem.

[seiji]

Old but good post ("where everybody is above average"): http://googleresearch.blogspot.com/2006/03/hiring-lake-wobeg...

[BraveNewCurency]

Interesting post, I hadn't seen that before. Here is another factor to worry about: If you hire too many mediocre programmers, the good ones will leave. (Trust me, they can get jobs easily.) You'll be stuck with the mediocre ones.

http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...

I think the NetFlix strategy is partly a response to this.

People pretend there is a 10x difference between programmers. I assure you that is way too low. The difference is actually Infinite, because contributions can be negative (I've seen a bad programmer set back a project by 6 months). Even worse, a programmer can create a toxic atmosphere, causing good programmers to leave.

I like the NetFlix strategy. Some people are just a hell of a lot more productive than other people. (Example: http://bellard.org/ )