Where there’s Smoke – there’s “Fire’…

Smoldering Personnel Problems can Lead to ‘Fire’…Just ask the Innovative HR Executives at Netflix

Dealing with difficult employees is part and parcel for human resources departments. Proactively trying to circumvent potential conflicts, before they become an issue, is an ongoing challenge for HR professionals and managers. Most of us at one time or another have had to deal with difficult managers, colleagues or employees; spending an inordinate amount of time and energy trying to deal with the situation – which becomes a distraction and source of stress. Dealing with a problem personality often goes on for years, much longer than it should, with managers never quite able to ‘pull the trigger’ and let the person go.

But there are better ways according to Erika Anderson, author of ‘Growing Great Employees’ in her Forbes column, ‘9 Ways to Deal with Difficult Employees,’ including attentive listening, giving clear behavioral feedback, documenting any issues, and setting consequences if things don’t change. “If you learn to use these ‘good manager’ approaches  when you have a difficult employee, then no matter how things turn out, you’ll end up knowing that you’ve done your best in a tough situation.  And that may be the best stress reducer of all.”

As it does in a great many areas, the ninety-ten rule applies when dealing with difficult employees as well; wherein the vast majority of time is spent on a minority of employees. However, a recent study from the University of California – Berkley Journal of Economy & Society ‘Industrial Relations’ might help explain why difficult employee behavior is so prevalent; citing that an estimated 18% of men and 16% of women have personality disorders. As quoted by HR author Rebecca Walberg in a Financial Post column titled ‘How to deal with a ‘Difficult’ Employee’, “These challenging people don’t meet the clinical definition of mental illness but, left to fester, their behaviors can cause workplace conflict, drama and wasted time and energy.”

Perhaps the best recent example of a company establishing a new approach to hiring practices, and dealing with difficult employees, is Netflix. The firm created a PowerPoint presentation explaining how they ‘shaped the culture and motivated performance’, and in effect, ‘reinvented HR’. The slide deck has been viewed online over five million times; prompting other organizations to sit up and take notice. Patty McCord, former Netflix chief talent officer, writes in the Harvard Business Review, “People find the Netflix approach to talent and culture compelling for a few reasons. The most obvious one is that Netflix has been really successful: During 2013 alone its stock more than tripled, it won three Emmy awards, and its U.S. subscriber base grew to nearly 29 million. All that aside, the approach is compelling because it derives from common sense.”

Netflix’s common sense approach to hiring includes the credos:

  • Hire, Reward, and Tolerate Only Fully Formed Adults
  • Tell the Truth About Performance
  • Managers Own the Job of Creating Great Teams
  • Leaders Own the Job of Creating the Company Culture
  • Good Talent Managers Think Like Businesspeople and Innovators First, and Like HR People Last

McCord explains, “Over the years we learned that if we asked people to rely on logic and common sense instead of on formal policies, most of the time we would get better results, and at lower cost. If you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing. Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause. Instead, we tried really hard to not hire those people, and we let them go if it turned out we’d made a hiring mistake.

At Netflix I worked with colleagues who were changing the way people consume filmed entertainment, which is an incredibly innovative pursuit—yet when I started there, the expectation was that I would default to mimicking other companies’ best practices (many of them antiquated), which is how almost everyone seems to approach HR. I rejected those constraints. There’s no reason the HR team can’t be innovative too.”