Netflix has just optimized its famous “Keeper test,” which is used to weed out poor performers

• Netflix has added a new line to its “Keepertest” in an updated version of its culture memo.

• The test is when a manager asks if he would fight to keep an employee on the job. If not, he gets fired.

• Netflix’s Culture Deck is known in the corporate world for its directness in presenting company values.

Netflix has revised its famous culture memo – among other things, it added a line about the “keeper test” that managers use to decide whether to fire an employee.

The Keeper Test was previously defined as follows: “If a team member left the company to take a similar position at another company, would the manager try to retain him or her?”

If the answer was no, Netflix said the employee received a “generous severance package” and job cuts were made to find a more capable replacement.

Netflix has long been known for running its business like a sports team rather than a family, and the goalie test is part of that culture. It also means that tenure there can be short, as the company looks for top talent and quickly fires underperformers.

The keeper test is now: “If X wanted to leave, would I fight to keep him?” or “Would I rehire X with all the knowledge I have today?” If the answer is no, according to the memo, it is fairer if everyone separates.

It’s the same idea, just worded slightly differently – but updated to include a disclaimer.

“In theory, the Keeper Test can sound scary,” says the latest version of Netflix’s culture memo. “In reality, we encourage everyone to regularly talk to their managers about what’s going well and what’s not. This helps avoid surprises.”

Netflix’s Keeper test was first introduced in a 100-plus page memo from 2009. Netflix encouraged its managers to conduct the test once a quarter, said co-founder and former CEO Reed Hastings. He reportedly used this to fire his product chief and longtime friend, who had worked for the company for 18 years.

The memo, which was originally considered too blunt for a public corporate document, has been revised several times since its initial release and is now only five pages long.

The story goes on

Greg Peters, co-CEO of Netflix, said in an interview with The Verge’s “Decoder” podcast that the memo was shortened because the company could “better articulate” its practices.

In the interview published Monday, Peters said the original memo may have falsely conveyed that Netflix was “a tough and perhaps unforgiving place,” which he said was not the case. In the three versions since then, Peters said the company may have swung too far to the other side of the pendulum and become too soft.

The co-CEO said that in later versions of the memo, employees misinterpreted the company’s statement on “freedom and responsibility” — which essentially said that Netflix employees were trusted to act in the company’s best interests and that they were not subject to micro-monitoring — and acted in ways that were inconsistent with the company’s goals. The company has since deleted that section and added a new one titled “People Before Process,” which says the company should hire “unusually responsible people who will benefit from that openness and freedom.”

The new memo also states: “Not all opinions are equal,” and given the company’s growth, it is no longer possible for everyone to have a say in every decision.

The latest memo took 12 months to prepare and received 1,500 comments from employees, Netflix said in a press release. It was made publicly available on Monday.

You can read the latest version of Netflix’s culture memo here.

Read the original article on Business Insider