Article
16 min read
How to Run Employee Performance Reviews Like Netflix (Breakdown + Step-by-Step Guide)
Global HR

Author
Lorelei Trisca
Published
February 08, 2025
Last Update
February 13, 2025

"Ta dum"…Does this sound ring a bell? If you love to consume video content, you've probably heard this sound many times. Yes, it is the reverberating sound of the Netflix logo lighting up your screen. 'Ta dum' today is as iconic as the Fox Searchlights drumroll and trumpets, and the Metro Goldwyn Mayer lion's roar.
This corporate culture of standing out and doing something unique is not limited to the product. It's prevalent across all departments at Netflix. Especially in Human Resources.
With around 14,000 employees across six continents and multiple Emmy award-winning shows, it is no surprise that Netflix takes attracting and nurturing talent very seriously. So, what lessons can we learn from Netflix's stellar people management strategies?
Learn all about
- How Netflix' unique high-performance culture works
- Their rules for giving & receiving feedback
- What The "Keeper Test" is and how it works
- Breakdown of their 360 review process including anonymity settings
- Their learnings along the way
Netflix’s take on reinventing HR
"Netflix has not only captivated the attention of its customers around the world but also continues to grow its reputation as an attractive, sought-after employer."—Forbes, Incubating Culture: How Netflix Is Winning The War For Talent.
Netflix has completely bid adieu to the old-school yearly performance review, which caused much consternation and awkwardness. Instead, they’ve replaced the rating system with 360-degree feedback, the “Keeper Test,” and the 4A Principles of feedback. All of these foster the tenets of freedom and responsibility. Additionally, Netflix believes in recruiting quality talent to make the lives of current employees easier.
These elements shape an intense culture of high performance, where star players join and grow within the company, and the poor players are let go. While it may sound harsh, this combination works for them—80% of Netflix employees would encourage their friends to become co-workers.
While these examples summarize Netflix's unique people management process, let’s explore in detail how Netflix's innovation in HR practices has helped rewrite the archaic performance and people management playbook.
How does Netflix run performance reviews?
You might think that linking sports strategy with corporate leadership is an overused cliché. Yet at Netflix, this analogy still hits the bull’s eye when it comes to performance management. Patty McCord, the former Chief Talent Officer at Netflix, drew inspiration from the legendary tactics of hockey coach Scotty Bowman. So what were these principles of good performance management that Patty McCord found so valuable?
- Your ultimate goal is to help the player (the employee) and the team to perform better. Any process you set up should be oriented toward that goal
- You don’t measure performance for measurement’s sake but to learn and take action
- Aid the performance assessment process with an objective measurement of activities and results
- You should measure the player’s performance in the context of the entire team’s performance
- Collect multiple viewpoints of other players on how helpful the individual player is to the whole team
Rather than waiting for an annual checkup, employees engage in regular, candid conversations. Managers have shifted from being distant evaluators to active coaches, providing immediate, actionable insights that empower each team member to excel—just as a top sports coach fine-tunes a player’s performance on the fly.
By adopting this approach, Netflix uses data-driven metrics to illuminate what’s working and where improvement is needed, always with the aim of aligning individual efforts with broader team and company goals. Every piece of feedback is a stepping stone, ensuring that each employee is truly “taking one for the team” while also thriving on their own merits.
360-degree feedback rather than performance reviews
Netflix does not do performance reviews per se in the sense of a formal process where a manager retrospectively evaluates an employee's work performance.
Netflix ditched the annual performance reviews and replaced them with 360 feedback reviews. In doing so, they adopted a more holistic approach to performance management that considers input from an employee's peers, direct reports, and managers.
So, written 360-reviews are administered regularly, enabling Netflix employees to give feedback to colleagues, managers, and, if applicable, direct reports. Reviews are one text box that employees have to fill.
Each person can now give feedback to as many colleagues as they choose at any level in the organization - not just direct reports, line managers, or a few teammates who have invited input. Most people at Netflix provide feedback for at least ten colleagues, but thirty or forty is common. I received comments from seventy-one people on my 2018 report.
—Reed Hastings,
Executive Chairman and former CEO, Netflix
It is worth noting that Hastings himself stresses the need to encourage actionable feedback focused on development areas:
Positive actionable feedback (continue to...) is fine, but keep it in check. A good mix is 23% positive and 75% developmental (start doing...and stop doing...). Any non-actionable fluff ('I think you're a great colleague' or 'I love working with you') should be discouraged and stamped out.
—Reed Hastings,
Executive Chairman and former CEO, Netflix
This famework encourages employees to:
🟠 Continue doing anything good that adds value to the company, as they get positive real-time feedback for their efforts.
🟢 Start a new initiative that can contribute to company growth.
🔴 Stop something that is not helping the team or the company.
Why Netflix dropped traditional performance reviews
Netflix doesn’t use performance reviews to determine salaries—compensation is based on market value, not individual performance ratings. This is also one of the reasons why Netflix does not use rating scales.
We've been against performance reviews from the beginning. The first problem is that the feedback goes only one way—downward. The second difficulty is that with a performance review you get feedback from only one person—your boss. This is in direct opposition to our 'don't seek to please your boss' vibe. I want people to receive feedback not just from their direct managers but from anyone who has feedback to provide.
—Reed Hastings,
Executive Chairman and former CEO, Netflix
How does compensation play into performance reviews?
These reviews don't directly impact appraisals and current pay. The annual compensation review takes place in the fall and is the main determining factor for monetary compensation. However, the 360 reviews help Netflix's employees understand if they are a good fit or not in Netflix's corporate culture.
A recurring negative review may indicate that employees aren't learning from their mistakes.
Anonymity
When they first tested annual written 360s, Netflix implemented anonymous feedback. The company wanted to ensure that people could leave honest feedback without fearing retribution. Yet, to management's surprise, people preferred signing their feedback.
It just seemed backward to tell our employees all year long to give feedback directly to one another and then at 360 time to pretend that comments were coming from a secret source. Everything I was writing I had told them anyhow. I just did what felt natural given our climate. I put the feedback in writing and signed my name.
—Leslie Kilgore,
Board Member and former Chief Marketing Officer, Netflix
The "Keeper test"
How many of your employees would you fight to retain during a crisis? Or in the face of massive budget cuts? Netflix’s "Keeper Test" is a brutally honest framework designed to answer this question.
Managers have to ask themselves: "Would I go out of my way to keep this employee?" If the answer isn’t a resounding yes, then that employee may not have a future at Netflix.
The philosophy is both radical and simple at the same time. In Reed Hasting's own words:
If a person on your team were to quit tomorrow, would you try to change their mind? Or would you accept their resignation, perhaps with a little relief? If the latter, you should give them a severance package now, and look for a star, someone you would fight to keep.
—Reed Hastings,
Executive Chairman and former CEO, Netflix
The Keeper Test is a true litmus test to differentiate the high-value contributing employees from those that drain. This also ensures that your company's cultural DNA is that of High-Performance.
In his book, No Rules: Netflix and the Culture of Reinvention, Reed makes it clear: Netflix teams do not function as a "family"—a term often thrown around in corporate culture. Instead, they operate like an elite jazz band or a professional sports team. Each player or musician needs to be in top form and then come together to play a match-winning game or an award-winning symphony.
4A Principles of feedback
True to its radical nature, Netflix encourages a culture of radical, transparent feedback that doesn't just flow downward or upwards but also in a circle. Employees are encouraged to receive and give feedback to anyone and everyone.
While the open, non-anonymous 360-degree blunt feedback instigates valuable discussion, it was clear to Reed and co. that the feedback had to be:
- Clear
- Actionable
- In good faith
To this end, Netflix came out with the 4A Principles of Feedback, which meant all employees' (managers included) had to keep these in mind while giving and receiving feedback.
When giving feedback:
- Aim to assist
- Actionable
When receiving feedback:
- Appreciate
- Accept or discard
5 Reasons behind Netflix's current performance review system
In line with their cultural DNA
"A great culture that focuses on freedom & responsibility and tries to avoid the pitfalls of typical Hollywood. You work among the best and brightest. You're treated like an adult in terms of how & when to do your work– as long as it gets done and is done well."–Netflix employee, on Glassdoor
Over a decade ago, Patty McCord and Allison Hopkins presented a deck of slides to Reed Hastings, Netflix Founder and CEO.
The "Netflix Culture Deck" completely redefined Culture Building among Human Resource professionals. Many see it as the genesis of the unique culture we see at Netflix today. Sheryl Sandberg, ex-COO at Facebook, called the Culture Deck "one of the most important documents ever to come out of Silicon Valley."
The deck laid the foundation of Netflix's employee performance management system. And in doing so, it inspired several others to ditch archaic HR practices for ones that actually work. The deck is a great primer for Netflix to grow its people function as it scales across geographies, languages, and more, with ideas such as:
- Increasing talent density faster than business complexity
- Eliminating control and introducing context
- Promoting complete transparency and radical candor
- Adopting a code of conduct for ethical behavior
- Differentiating between "Good" and "Bad" processes to circumvent the pitfalls of market shifts and rapid growth
Unlike generic values listed by most companies' "culture" doc, the core values upheld at Netflix are as clear as crystal. These are the behavioral traits that decide:
- Who is hired
- Who is nurtured
- Who is let go
Performance management processes at Netflix stem from this deeply entrenched, thoughtfully articulated culture code. By doing away with ritualistic and irregular performance reviews, they eliminated the bureaucracy usually associated with obsolete formal performance review systems.
Instead, 360-degree feedback allows employees to identify which projects and behaviors they are to "Stop, Continue and Start." Thus, ensuring that each one aligns with the best of Netflix's interests.
Empowered resources = Increased engagement
The top 3 qualities of a great employee are:
- High and complete ownership
- Accountability and highly conscientious
- Innovative
However, these qualities are often suppressed by defining strict KPIs. When strict performance indicators bind an employee, they become a frog in a well. It's almost like giving them a green signal to only think about meeting their targets, ignoring long-term vision for short-term outcomes.
At Netflix, leaders allow their people to shape their careers instead of institutionalizing them with structured career plans.
"The way you develop yourself is to be surrounded by stunning colleagues. We surround people and let them develop themselves."—Reed Hastings, Executive Chairman and former CEO, Netflix, quoted in Tough Love at Netflix.
Hire and retain "Star" performers only
A hedge against a scenario where complacency kicks in and growth stagnates is to hire great people, pay them top-of-market, and give them the room to grow and learn from each other. All of Netflix's policies are aligned to hire and retain "Star" performers, which raise the bar for the entire company, year after year.
Moreover, Netflix has no centrally administered "raise pools" (i.e., bars of 10%, 20% appraisals, etc.) or traditional annual reviews.
Instead, they follow an Annual Comp Review, where managers align their employees' compensation based on market standards, answering three questions for all the star performers:
- Are they being paid top of the market for their skill set?
- Are they being paid as much as a replacement would cost?
- Are they being paid as much as they'd get paid to be retained if they had a higher offer elsewhere?
This yearly realignment in salaries means star performers get rehired at a higher salary, much more than a typical raise pool would warrant. Meanwhile, median and poor performers may move down or stay flat.
Salary is the #1 motivator for all, Patty and Reed agreed. And this unique way of rewarding monetarily ensures a transparent pay policy for all.
Employees are encouraged to speak openly about their pay, not just with colleagues but also by talking to peers at other companies. Moreover, talented people, who are handsomely rewarded, attract others.
"Too often, excellent workers are frustrated at having to work with others they perceive as average or worse performers."—SHRM, Tough Love at Netflix.
100% transparency
Netflix encourages complete transparency among all employees.
- If you are underperforming at Netflix, you will immediately receive the relevant feedback.
- If your team is not meeting the targets, you will know it.
Managers are not mired by having to maintain internal parity and are instead encouraged to call a spade a spade. The 360-degree feedback also encourages transparency, as the reviewers are never anonymous. Every employee gets a clear picture of how they are perceived and areas of improvement.
Netflix believes transparency helps reduce tension and counteract dirty internal politics.
The key to Netflix's performance review success
The unique cultural code and the resulting performance review system at Netflix have been largely successful.
In 2018, the firing rate at Netflix stood at 8%, lower than the average 6% in other US companies.
On the other hand, as Wall Street Journal reported, the voluntary churn rate stood at a mere 4%, a stark contrast to the 14% at average American companies.
So, what makes Netflix a dream company for the top 1% of talent?
Complete freedom
Netflix's workforce isn't just competent. They also get the space to grow, experiment and chart their paths. By doing away with binding KPIs and formal processes, employees can work on projects that truly matter and work in the collective interest of everyone at the company.
Radical candor
Netflix has a bunch of techniques embedded in its culture and way of doing things to enhance openness in the organization:
- The 360-degree non-anonymous performance peer review process
- The Keeper Test
- The 4A Principles of feedback
All of these policies aim at creating a culture of radical candor.
Leading by example, Reed himself states:
Only say about someone what you will say to their face. I modeled this behavior as best I could, and whenever someone came to me to complain about another employee, I would ask, 'What did that person say when you spoke to him about this directly?
—Reed Hastings,
Executive Chairman and former CEO, Netflix
A star-studded peer group
Bold decisions like letting go of underperforming employees may be controversial. Still, it works when you want to create a team of high-performers only. Netflix has a bold and transparent approach from the get-go, ensuring that the top talent is around the best peers to bounce ideas off of and grow with.
How can you run a performance review process similar to that of Netflix?
With Deel Engage, you can run a performance review process like the one pioneered by Netflix.
Here are a few ways to leverage Deel Engage to run a similar performance review process:
Run 360-degree feedback on Deel Engage
Deel Engage allows you to get 360-degree feedback from multiple directions with little admin hassle. Here is how you create a new feedback cycle:
1) Name your cycle and briefly describe it
Chose a clear name so all your stakeholders understand its purpose, e.g., annual 360 performance review.

2) Select the appropriate feedback types
You can choose:
When configuring the peer feedback survey, define how many peers can participate per employee and the rules for peer selection. Should the employee do it? Or should the manager?

Peer nominations on Deel Engage
3) Create questions for each feedback type
You can create all questions yourself or choose some from the available templates. You can implement the "Keeper Test" by using hidden questions and enabling the "Hide from reviewee" function. The reviewees will never be able to see the answers. Managers can answer questions relating to promotions, increasing compensation etc.
4) Add instructions for your reviewers
You can add instructions on how to give feedback. In case of using rating scales, you can explain the scale.
To replicate Netflix's model:
- Reaffirm the 4As of Feedback. Instruct reviewers to give feedback that is clear and actionable, aims to assist, and is given in good faith.
- Incorporate the "Start, Stop, Continue" framework for questions and answers.
- Only create comment questions to gather qualitative data. No need for rating scales.
5) Define your anonymity settings
Netflix is all about transparency and openness, so do not enable the "Share anonymously" feature.
6) Design the reviewer experience
What would you like your reviewers to see while writing and submitting feedback?
- Will your employees be able to see who will see their responses?
- Should they see whether their answers are anonymous?
7) Select the participants for your review cycle
Who will be under review? You could select specific departments, teams, or specific employees.
You could also choose everyone in the company with a single click. Simply select "All employees."
You also have the option to automatically add employees to 360 feedback cycles, depending on their job start date, or being added to specific groups.
8) Define the timeline
Set the deadlines for all the steps of the feedback cycle you configured.
Here are some examples of deadlines to consider for a 360 cycle:
- For employees submitting their self-reviews.
- For employees nominating their peers.
- For managers approving the peer nominations.
- For managers submitting downward feedback.
- For reviewing and calibrating the preliminary results.
- For sharing and discussions: When will the employees access feedback from peers and managers?
9) Your feedback is ready to go live
Double-check all the details and activate the cycle.

360-degree feedback on Deel Engage
Features that make Deel truly stand out from your run-off-the-mill HRMS
- Soon you'll be able to use survey templates created by our L&D consultants—these will accelerate process creation, preventing bias and collecting high-quality data
- With a highly customizable 360° feedback builder, it is intuitive for you to set up and build the feedback system of your dreams
- With the advanced anonymity settings, you can decide which feedback should be anonymous and which should not
- If a lot of your teammates are working remotely, you can use the Engage surveys module for measuring remote engagement as well as job satisfaction
- Moreover, feedback is directly linked with other features, like career paths, goal management, and development plans, to make it a more holistic and actionable experience for your employees
Run great performance reviews with Deel Engage
Book a free 30-minute demo to see how to craft the best performance review system that enhances your organization's productivity.
Disclaimer: The data outlined in this content is accurate at the time of publishing and is subject to change or updating. Deel does not make any representations as to the completeness or accuracy of the information on this page.

About the author
Lorelei Trisca is a content marketing manager passionate about everything AI and the future of work. She is always on the hunt for the latest HR trends, fresh statistics, and academic and real-life best practices. She aims to spread the word about creating better employee experiences and helping others grow in their careers.