"Keeper Test" at Netflix: A deep dive into its effects on employee retention

Netflix has always been known for its unique corporate culture, which emphasizes freedom and responsibility. One of the most debated aspects of this culture is the "Keeper Test." This policy requires managers to ask themselves a simple yet profound question: "If one of the members of the team was thinking of leaving for another firm, would I try hard to keep them from leaving?" If the answer is "no," that employee is let go. This approach, while aiming to maintain a high-performing team, has sparked significant debate regarding its impact on employee morale and job security.

The Origins of the Keeper Test

The Keeper Test is deeply rooted in Netflix's corporate philosophy, which prioritizes high performance and innovation. Reed Hastings, Netflix's CEO, and Patty McCord, the former Chief Talent Officer, introduced this policy to foster a culture of excellence. As McCord explained, "We wanted to encourage independent decision-making among employees, but also retain only those who were highly effective".

How the Keeper Test Works

The Keeper Test is straightforward but ruthless. Managers periodically evaluate their team members by asking themselves if they would fight to keep each employee if they were considering leaving. If the answer is no, the employee is terminated, often with a generous severance package. This method is designed to ensure that only the most effective and valuable employees remain at Netflix.

The Impact on Employee Morale

While the Keeper Test aims to maintain a high-performing team, it has significant implications for employee morale. The constant threat of termination can create a high-pressure environment where employees may feel insecure about their job stability. As one former Netflix employee noted, "Getting cut, when it happens, is very disappointing but there is no shame at all. Our former employees get a generous severance and they move on to other opportunities" .

Balancing Performance and Job Security

Netflix's approach to performance management is not without its critics. Some argue that the Keeper Test fosters a culture of fear rather than one of innovation and creativity. However, Netflix maintains that this policy is essential for maintaining a team of top performers. The company believes that by setting high standards and being transparent about expectations, they can create an environment where only the best thrive.

Employee Feedback and Adaptations

Despite the controversy, many Netflix employees appreciate the clarity and honesty that the Keeper Test brings. The company's 360-degree feedback tool allows employees to review their peers and managers, providing a comprehensive view of performance and areas for improvement. This feedback mechanism ensures that decisions are made objectively and transparently, aligning with Netflix's core values of openness and candor.

Netflix's Keeper Test is a bold and controversial approach to employee retention and performance management. While it aims to maintain a high-performing team, it also raises questions about job security and employee morale. As Netflix continues to evolve, it remains to be seen whether this policy will stand the test of time or if it will need to adapt to changing workplace dynamics.