Even in a cut-throat industry like sports, athletes aren't cut or traded the instant they enter a slump (if they still have future potential).
And I can guarantee that the average minor league player out there makes far less than your average software engineer.
The original claim is that Netflix runs more like a professional sports team in terms of demanding performance. The argument against was that they don't pay like one.
My argument is that they pay somewhere between a minor and major league team, both of which have a "perform or get out" mentality.
They also don't fire you at 30 for being washed up and leave you with brain injuries and zero transferable skills.
"In English sport, there’s no draft; there’s no salary cap; there’s no revenue sharing, no parity. In the Premier League, it’s every team for themselves." [1]
There probably aren't any $10MM/year sailors, but we can infer that $1-2MM/year should be possible for a few.
If your sport isn't one of the few that can command massive advertising dollars, then there may be no pay at all. The value chain is very clear: all high athlete salaries are ultimately funded by advertisers wanting access to consumer eyeballs.
Overlay all this with the very short effective career, the near-absence of post-athletic marketable skills, and the devastating effect of injuries, and you'll find athletes are statistically underpaid over their lifetimes.
Five years later, McCord, her mentor, left. When I asked her why, she visibly flinched. She wouldn’t explain, but I learned later that Hastings had let her go.
McCord being the manager who instituted the aggressive cutting of employees that weren't good current fits for a position, which makes this somewhat ironic. Having an employee flinch when a prior employee's name is brought up seems like a major red flag to me. One of the negatives of aggressively removing people from positions like they do might be that many existing employees stress about their employment, possibly to an unhealthy degree. It sounds like sometimes there is little or no feedback as to performance before these removals.
* Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer
* Because your metrics might not be good enough to actually discriminate low performers from high performers
* Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
And probably other reasons.
So I have no problem with:
* Letting go people because the company has to reduce man count, and choices have to be made
* Letting go people because their behaviour is hurting the company
However I'm dubious about the idea that you should keep churning employees perceived as "low performers" to hire new ones who may or may not later reveal to be better.
This is basic Deming management wisdom: most of the overall performance of your company comes from the system and environment surrounding individuals, including the individuals themselves. Optimize the whole, not the parts; focusing on individual performance is just a distraction that drives overall performance down the drain.
I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else).
> * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)
See stack ranking!
The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is.
That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".
Here are some problems with that: A lack of loyalty to your employees can have a corrosive effect on morale. Employees can end up having very short term goals, or manage their careers in ways that they try to keep themselves in advantageous positions rather than the ones that serve the company. Why should a star take on a risky project, if failure results in termination? Firing can also be a lazy way to deal with a variety of management problems.
Some happy medium between family and performance oriented needs to be found.