I recently had an interesting discussion with my wife regarding the issues that arise in the workplace over compensation and the perils organizations face without a clear pay structure with clear steps based on experience (at the hiring stage), performance (a metric to award excellence) and longevity (a by-product of performance). Organizations that fail to bring clarity to their team members pay structure open the door to allowing toxic team members to use pay as a blunt tool with which to sew division among team members.
(On that note, I just read the following article on Linkedin by Jack and Judy Welsch that is a good short read: Do You Have a Jerk Problem?)
Along this line, one of the most famous examples of an organization addressing its pay structure and culture can be found in Netflix CEO Reed Hastings’ renowned “Netflix Culture” presentation, in which he details, in 126 slides, how he hires, fires and rewards employees.This document (slideshare) has been quite controversial, but I think is insighful (but difficult to implement as a school leader.)
Here are some highlights:
Pay the top of the pay scale from jump street (Since they are committed to hiring the best, they pay at the top of the market. This is long term thinking as keeping good people is important and staff turnover is expensive.)
- No vacation policy (take as much as you want, as long as you’re doing a great job and covering your responsibilities).
- “Outstanding” employees only–doing an “adequate” job leads to your getting a “generous severance package,” so the company can hire an A-player in your place.
- “Freedom and responsibility” vs command-and-control: Good managers give their employees the right context in which to make decisions–and then the employees make the decisions.
- No “brilliant jerks” — Star performers who also happen to be hell to work with are sent packing.
Netflix has just released an updated culture and management philosophy, one that takes into account another two years of operating experience, as well as all the feedback the company got on its prior philosophy. Worth the read.