Talent Management - July 2008 - (Page 47)

My HR team is responsible for helping [hiring managers] maintain a constant candidate ﬂow, but they’re not responsible for hiring a great team. My recruiting department in the corporate headquarters is run like a boutique headhunting ﬁrm. The ﬁrst piece of our talent management philosophy is about ﬁnding them. Once we get the right person in and it looks like its going to be a good relationship, we treat people from the very beginning like the adult professionals that they are. The average salary in the corporate ofﬁce is beyond six ﬁgures. Because of the incredible leverage we have with salaries against the revenue of the company, we’re able to pay well. If you’re at Yahoo and your current annual base salary is $110,000, you have the possibility of making $20K a year bonus, and you have some stock options. I might say, “Well, I’m going to call your salary $130,000, and I’m going to round up how many options you might get in a year and see what that might be worth.” I’m going to call what you’re making $140,000, but I might make you an offer at $150,000, $160,000. I’m going to say, “Your total annual compensation is $150,000, and you can take it all in cash if you want.” I don’t do bonuses to achieve goals. I’m going to assume, if you’re capable, you’re going to achieve them. You can then take that $150,000 in cash or you can say, “I want to take home $130,000 and that other $20,000 I’m going to use for stock options.” I grant stock options monthly, fully vested. The amount of equity or cash you want, that mix is completely up to you. I’m not going to have people sitting around vesting because then how am I going to retain them? I don’t want you coming to work everyday because you’re vesting. I want you to come to work because you want to be here. Adequate performance in most companies gets you an average raise. We don’t want people to be average. We want people to be amazing. That’s Scene One. TM: McCord: Does that include the hiring managers? We tell them their job is to win. Their job is to put together the most amazing team they can. If you ﬁnd somebody that can do more, has more experience and more impact than somebody you already have, swap them out. Scene Two is during the ﬁrst quarter of your employment. If you’re a salaried employee, you come here and do a full-day session that we call New Employee College. Each C-level executive does an hour presentation on their part of the business. I call it “the bones.” That’s where you learn about the role of marketing, technology, ﬁnance, our investors. We go through all of the fundamentals of the company. I open and our CEO closes it. We don’t do traditional training and development. In fact, when I did my session recently I had a list of things I care about and things I don’t care about. The ﬁrst thing I said was, “I care about winning, but I don’t care about morale.” I’ve been in HR for so long. You know what makes employees happy? Success. We try to provide a culture and environment that provides employees with things they can only get at work. You can belong to a great gym, and that might be important to you. It also might be important to you to play with your children or to seek your spiritual journey. Those things are terriﬁc, but at work we provide people with great colleagues and really interesting challenges. That’s what we focus on. TM: McCord: Do you offer any training once the employee is on board? There’s training in customer service on how to be a callcenter rep. There’s training in operations on how to be an operations associate, but we don’t do training at (the senior) level. To ensure talent is fully effective here, I set context. If my metaphor is basketball and I’m hiring a center forward, I’m assuming this person has played pro basketball before. We can do drills and practice, but I don’t need to teach them the fundamentals of the game; I need to teach them how this team works. First, usually within the ﬁrst 60 days, in groups of six to eight, our CEO and I meet with them and talk about the fundamentals of the business, the values and the culture. We write down values as behaviors, not aspirational goals. We talk to employees about, “If you do these things and you do all of them well, you’ll make a bunch of money and get promoted. If you don’t, you won’t work here anymore.” We say adequate performance gets you a generous severance package. We make it edgy to make a point: I’m going to make a radical change in our 360 process this year. Usually once or twice a year we do a 360 process, meaning managers give feedback to subordinates and subordinates give it back to managers and peers to peers, and internal clients across functions and all that stuff. We usually have a pretty disciplined process where people select their raters, the managers review them and then everything is rolled up and graphed. This year, I’m going to open it up completely. Anybody can review anybody. The cultural value of that will be that the organization collectively gives each other feedback to make us a better team. TM: McCord: What performance management systems does Netﬂix use? We don’t have anything you would traditionally call a performance management system. How familiar are you with the work of engineering? INSIGHT continued on page 56 July 2008 TM: McCord: How have performance systems evolved? talent management magazine www.talentmgt.com 47 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - July 2008

Talent Management - July 2008 Editor’s Letter Human Performance Leading Edge Learning Connections Guest Editorial Passive Candidate Recruiting: Evolving with a Changing Workforce How Do They Feel? Sec Regulations and Executive Compensation Performance Management: A Retail Perspective Train the Non-Trainer Management-Go-Round: Developing Future Leaders Netflix Creates Its Own Script for Talent Management Intuit Spotlights Strategic Importance of Global Employee Recognition Make HR a Profit Center: Automate Technology to Gather Tax Credit Data Offshoring and the Impact on Talent Management Advertisers’ Index Editorial Resources Full Potential

Talent Management - July 2008

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