I've known people who've worked at Netflix and have complained about some toxic policies.
Some highlights I can recall:
Unlimited ESPP rewards already wealthy employees. If you can afford to not take any pay for six months, you basically get a big bonus.
I was told there was (and may still be) some kind of stack ranking system. Employees are fired if they're in the bottom x percent of performance reviews, even if they did a good job. In a company that's obsessed with everyone being exceptional, merely being adequate is considered failure.
Unlimited vacation time is like an Orwellian joke. What it really means is you don't accrue PTO, can't cash it out like at other companies, and how much vacation you really get to take is a constant negotiation with management. The net effect is nobody takes any because nobody wants to be the guy who takes too much vacation, for fear of being perceived as one of those lower performing employees that gets let go each year.
I've worked for a company with "unlimited" vacation time, and "Orwellian joke" really is a great way to put it. In addition to everyone being careful not to be the guy who takes too much vacation (oh, except the slackers, of course), the value of an individual vacation day drops in everyone's eyes (no scarcity) and the result is that management develops an attitude that it's more acceptable to veto specific vacation dates. I've never had a proposed vacation denied at any other job but I saw it all the time at the "unlimited" vacation company (not only for myself but I heard coworkers complain about it).
You can't just implement "unmetered vacation" and have it all work out -- it has to be part of a set of practices.
For example, at Netflix as a manager I don't "veto" any proposed vacations, because my engineers do not propose vacations -- they tell me what time they're taking off. It's their job to make sure that's not going to be a surprise to anyone covering for them, and it's not my job to check that they've done that work.
As for being careful not to be the guy who takes too much vacation ... putting aside the fact I have people reporting to me who aren't guys, there are people on my team who take two days of vacation a year; there are people on my team who take ~6 weeks of vacation per year. Nobody here seems to care much.
Why would an unlimited ESPP be a bad thing, especially to the point of being a "toxic policy"? Does it really matter if someone else takes more advantage of that than you?
I'd love that as a perk, even if it made someone else even more money. I care about me and my family, not how much someone else gets...
Because any company which rewards people with extra money for deferring 100% of their comp for six months is elitist. The vast majority of their staff can't afford that and are therefore paid less for being poorer.
But I can't think of any situation where an employee makes less money because the policy is available to them than if the policy weren't available to them. (Absent of course a decline in value of stock they bought under the ESPP and then held for the decline, but that's a risk inherent to investing, not a policy problem.)
At worst it seems to be a policy that's beneficial to all, and some people choose to/are able to take more advantage of it. Doesn't meet my bar for toxic.
But I can't think of any situation where an employee makes less money because the policy is available to them than if the policy weren't available to them.
That isn't the point. The point is it's immoral to pay people more simply because they are already wealthy.
I now understand your point, and I thank you for that. It was escaping me, because I so strongly hold the opposing point of view. Thank you for explaining it.
My view is that with an ESPP policy, Netflix helps align employee incentives with investor (and executive) incentives, and that makes those employees more likely to act as shareholders and take a pro-company mindset. It serves a legitimate purpose and is a hell of a perk, IMO.
Taking that perk away hurts the poor employees more than the rich employees. Rich employees can invest in other stocks, bonds, real estate, etc. Granted, the ESPP is an excellent investment vehicle for them so it's not a surprise they take advantage of it, but if you kill the program, you hurt the very people you're trying to help.
I'm not sure how removing a policy that "poor" employees can't take advantage of hurts them. The claim is that employees who can't afford to defer earnings are in effect denied access to the perk - it is therefore a regressive perk that widens the gap between those at the top end and those at the bottom end, regardless of how it shapes the overall incentive structure.
It definitely serves a legitimate business purpose, but the employees who can't afford to participate are relatively worse off. Taking away the perk removes one source of imbalance, at a slight cost to the people who could afford to take advantage of it. But like you say, "rich" employees have many other investment options.
You're focusing on the wrong side (IMO). Paying poor people a bonus on top of money they save is helping the poor, mathematically and psychologically.
I won't deny that rich can take more advantage of this program, but the working poor at Netflix also can.
If you allow someone who is poor to save even $200 in an ESPP and give them a 15% bonus on top of that, you both introduce them to stocks as well as give them $30.
True, if someone literally doesn't take any advantage of the program at all, taking it away hasn't hurt them. What I suspect instead happens (from having worked alongside good and hard-working "blue collar" workers) is that Bob figures out that if he just saves a little bit in this program that sounds too good to be true, he gets more money, then he does it and it works, then he tells Charlie and Dave about it (bragging about his maneuver, but also wanting his friends to get in on this), then Charlie tries it, then Dave is convinced, and they tell their two best friends at work, etc.
Don't focus on how much money Chad and Biff are making from this program when considering eliminating it. Worry about the warehouse/call center worker and don't screw them over by killing it just as they're getting started saving.
The warehouse worker or call center worker who started out saving just $200/yr in the program and spending that money on Christmas for his kids is way better off after a few years when he realizes he can start tightening his belt around a few 'little leaks' in his life and the cycle of pure paycheck-to-paycheck starts to get broken. Maybe he gets up to $200/quarter (about $3/workday), then $25/week...
I'm not suggesting that such a program should be eliminated. Instead it should be reformed to benefit the majority more fairly rather than disproportionately benefitting those who are already wealthy. If poor employees can only afford to contribute 10% of their salary to ESPP, then everyone should be bound by that same limitation. This is typical at many other companies.
Comments
I've known people who've worked at Netflix and have complained about some toxic policies.
Some highlights I can recall:
Unlimited ESPP rewards already wealthy employees. If you can afford to not take any pay for six months, you basically get a big bonus.
I was told there was (and may still be) some kind of stack ranking system. Employees are fired if they're in the bottom x percent of performance reviews, even if they did a good job. In a company that's obsessed with everyone being exceptional, merely being adequate is considered failure.
Unlimited vacation time is like an Orwellian joke. What it really means is you don't accrue PTO, can't cash it out like at other companies, and how much vacation you really get to take is a constant negotiation with management. The net effect is nobody takes any because nobody wants to be the guy who takes too much vacation, for fear of being perceived as one of those lower performing employees that gets let go each year.
The whole thing sounded icky to me.
I've worked for a company with "unlimited" vacation time, and "Orwellian joke" really is a great way to put it. In addition to everyone being careful not to be the guy who takes too much vacation (oh, except the slackers, of course), the value of an individual vacation day drops in everyone's eyes (no scarcity) and the result is that management develops an attitude that it's more acceptable to veto specific vacation dates. I've never had a proposed vacation denied at any other job but I saw it all the time at the "unlimited" vacation company (not only for myself but I heard coworkers complain about it).
You can't just implement "unmetered vacation" and have it all work out -- it has to be part of a set of practices.
For example, at Netflix as a manager I don't "veto" any proposed vacations, because my engineers do not propose vacations -- they tell me what time they're taking off. It's their job to make sure that's not going to be a surprise to anyone covering for them, and it's not my job to check that they've done that work.
As for being careful not to be the guy who takes too much vacation ... putting aside the fact I have people reporting to me who aren't guys, there are people on my team who take two days of vacation a year; there are people on my team who take ~6 weeks of vacation per year. Nobody here seems to care much.
It sounds to me like Netflix has this policy implemented better than the one I experienced and the ones I've heard nightmare stories about.
I really like Travis CI's take on unlimited vacation time [0]. Probably won't ever catch on in the US though.
0: http://www.paperplanes.de/2014/12/10/from-open-to-minimum-va...
That was a great article and I now have a good deal more respect for Travis CI. Thanks for posting. Seems like a very healthy way to look at things.
I very much hope that this article gets around more. Unlimited vacation is a very (very) deceptive practice.
Why would an unlimited ESPP be a bad thing, especially to the point of being a "toxic policy"? Does it really matter if someone else takes more advantage of that than you?
I'd love that as a perk, even if it made someone else even more money. I care about me and my family, not how much someone else gets...
Because any company which rewards people with extra money for deferring 100% of their comp for six months is elitist. The vast majority of their staff can't afford that and are therefore paid less for being poorer.
But I can't think of any situation where an employee makes less money because the policy is available to them than if the policy weren't available to them. (Absent of course a decline in value of stock they bought under the ESPP and then held for the decline, but that's a risk inherent to investing, not a policy problem.)
At worst it seems to be a policy that's beneficial to all, and some people choose to/are able to take more advantage of it. Doesn't meet my bar for toxic.
That isn't the point. The point is it's immoral to pay people more simply because they are already wealthy.
I now understand your point, and I thank you for that. It was escaping me, because I so strongly hold the opposing point of view. Thank you for explaining it.
My view is that with an ESPP policy, Netflix helps align employee incentives with investor (and executive) incentives, and that makes those employees more likely to act as shareholders and take a pro-company mindset. It serves a legitimate purpose and is a hell of a perk, IMO.
Taking that perk away hurts the poor employees more than the rich employees. Rich employees can invest in other stocks, bonds, real estate, etc. Granted, the ESPP is an excellent investment vehicle for them so it's not a surprise they take advantage of it, but if you kill the program, you hurt the very people you're trying to help.
I'm not sure how removing a policy that "poor" employees can't take advantage of hurts them. The claim is that employees who can't afford to defer earnings are in effect denied access to the perk - it is therefore a regressive perk that widens the gap between those at the top end and those at the bottom end, regardless of how it shapes the overall incentive structure.
It definitely serves a legitimate business purpose, but the employees who can't afford to participate are relatively worse off. Taking away the perk removes one source of imbalance, at a slight cost to the people who could afford to take advantage of it. But like you say, "rich" employees have many other investment options.
How is paying people who are already wealthy more than people who are poor helping the poor?
You're focusing on the wrong side (IMO). Paying poor people a bonus on top of money they save is helping the poor, mathematically and psychologically.
I won't deny that rich can take more advantage of this program, but the working poor at Netflix also can.
If you allow someone who is poor to save even $200 in an ESPP and give them a 15% bonus on top of that, you both introduce them to stocks as well as give them $30.
True, if someone literally doesn't take any advantage of the program at all, taking it away hasn't hurt them. What I suspect instead happens (from having worked alongside good and hard-working "blue collar" workers) is that Bob figures out that if he just saves a little bit in this program that sounds too good to be true, he gets more money, then he does it and it works, then he tells Charlie and Dave about it (bragging about his maneuver, but also wanting his friends to get in on this), then Charlie tries it, then Dave is convinced, and they tell their two best friends at work, etc.
Don't focus on how much money Chad and Biff are making from this program when considering eliminating it. Worry about the warehouse/call center worker and don't screw them over by killing it just as they're getting started saving.
The warehouse worker or call center worker who started out saving just $200/yr in the program and spending that money on Christmas for his kids is way better off after a few years when he realizes he can start tightening his belt around a few 'little leaks' in his life and the cycle of pure paycheck-to-paycheck starts to get broken. Maybe he gets up to $200/quarter (about $3/workday), then $25/week...
I'm not suggesting that such a program should be eliminated. Instead it should be reformed to benefit the majority more fairly rather than disproportionately benefitting those who are already wealthy. If poor employees can only afford to contribute 10% of their salary to ESPP, then everyone should be bound by that same limitation. This is typical at many other companies.
Yes, but are they poorer than if they worked at a different company doing a similar job?
I probably would not work for this kind of company, but I don't see it as 'wrong' just not the kind of company _I_ would work for.
if the intent of the hiring policy is to get elite employees, then being elitist seems like an excellent plan
s/elite/wealthy/