I mean, an employee is satisfactory, but only satisfactory, so they give him a generous severance package and go hiring somebody else. Really?
Netflix wants a high-performance team. That means that "merely satisfactory" in a sleepy, less demanding company would make someone an outlier.
You have to cut the "merely adequate" 4s and 5s if there's no way to turn them into 7+; what you should do is do it humanely. Personally, I think that a 3-5 month severance is (a) not that expensive, in the grand scheme of things, and (b) by far superior to the morale toxicity of the traditional PIP-- especially when you're talking about a good-faith employee who did nothing wrong.
The tricky bit is successfully hiring high performance people. You have to have a pretty high success rate, and low turnover, or else you'll just be constantly churning through the "satisfactory" people and getting an occasional gem in there.
I don't think it's that hard, if you have high-level people involved in the hiring process and you're not stingy with pay and benefits.
You need enough of a draw to get a competitive applicant pool, and enough people who have sufficient talent to judge it.
Most companies err by hiring based on specialty, e.g. "we need exactly 3 data scientists and that's it". If you're looking for generally good people and willing to accept the variability that comes with that, and you have a managerial environment that provides multiple avenues to success (which is the definition of a good management environment) rather than multiple ways to fail, I think it's not that hard.
Netflix wants a high-performance team. That means that "merely satisfactory" in a sleepy, less demanding company would make someone an outlier.
You have to cut the "merely adequate" 4s and 5s if there's no way to turn them into 7+; what you should do is do it humanely. Personally, I think that a 3-5 month severance is (a) not that expensive, in the grand scheme of things, and (b) by far superior to the morale toxicity of the traditional PIP-- especially when you're talking about a good-faith employee who did nothing wrong.