Netflix Alters 'Keeper Test' In Corporate Culture Memo: Managers Now Ask 'Would I Fight To Keep Them?'

Netflix Inc. NFLX has updated its famous “keeper test” in its culture memo, a tool used to identify and remove underperforming employees.

What Happened: The “keeper test” is a method used by Netflix managers to determine whether they would fight to retain an employee. If the answer is no, the employee is let go. This test, a key part of Netflix’s corporate culture, has been modified to include two new questions, reported The New York Times on Monday.

The first new question is: “If X wanted to leave, would I fight to keep them?” The second is: “Knowing everything I know today, would I hire X again?” If the answer to either question is no, the memo advises that it is fair for both parties to part ways.

The updated memo also includes a disclaimer, stating that the “keeper test” may sound intimidating in theory, but in practice, Netflix encourages open communication between employees and managers. The company also evaluates team members based on their overall performance, rather than focusing solely on mistakes or unsuccessful ventures.

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The “keeper test” was first introduced in a 2009 memo, which was known for its directness. Since then, the memo has undergone several revisions and is now only five pages long. The latest version, released on Jun. 24, has been through eight months of review and received 1,500 comments from employees, according to the report.

Why It Matters: The “keeper test” is a key part of Netflix’s corporate culture, which is often described as more akin to a sports team than a family. This culture has been credited with contributing to the company’s success and has been emulated by other organizations.

Netflix’s corporate culture has also been influenced by other industry leaders. For instance, Reed Hastings, the co-founder and co-CEO of Netflix, has acknowledged the influence of Jeff Bezos, the former CEO of Amazon, on his business philosophy. This demonstrates how the corporate cultures of major tech companies can influence each other and the wider industry.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote