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At Netflix, Manic Performance Gets Unlimited Time Off

Tuesday, 17 Aug 2010 | 1:31 PM ET

Do you work for a company that offers unlimited paid time off? Mind boggling but true for a whole 1% of U.S. employers as of 2010, according to a WorldatWork survey.

One of these companies is Netflix, who has had this policy in place for a decade. And this is where the paradox lies: How does a company better known for cultivating a culture of high performance and the motto "Smart people, hard problems," embrace unlimited vacation days?

Several points to consider:

1) Rewarding the Efficient: An NPR report yesterday, referencing the WorldatWork results, cited Netflix VP for Corporate Communications Steve Swasey saying, "We have engineers who work pretty much around the clock because that's the way they work. And then they take two months to go visit family in India. We have people who never take a vacation for three years and then take a 90-day trip someplace. But they've earned it." Sound fair?

2) Cultivating a Manic High Performance Work Culture: A slideshow featured in the Business Insider recently by Netflix CEO Reed Hastings allowed us rare insight into the company's corporate culture. And one that attracted a lot of controversy. The introductory slide proclaimed: "Great workplace is Stunning Colleagues, Not day care, espresso, sushi lunches, nice offices, or big compensation."

Third slide: "Unlike many companies, we practice 'adequate performance gets a generous severance package'."

Fourth slide: "We're a team, not a family."

The presentation goes on for another 10 slides that alternatively preached loyalty, dismiss hard work over effectiveness, and allege preference for compensating people for speed instead of hours spent, and finally a no-tolerance policy for "brilliant jerks." With a high premium on out-of-the-box geniuses, is there any room for the adequate, hardworking and loyal employee?

3) A lean organization which operates on openness, approachability and honesty: Netflix has been managed by the same talent chief since 1998—the same year Hastings founded the company. While her long tenure can attract questions on lack of new thought, old management style, etc., for Netflix, this has worked in their favor. And it is Patty McCord's emphasis on a lean organization that in part has helped make the movie subscription service a $1.6 billion (2009) company.

Her hiring standards were always nontraditional. Explaining that she only hired "fully formed humans," McCord expanded in an interview with Human Resource Executive Online:

"For me, fully formed adults are people who follow the business, understand what their companies' annual revenues are, follow the stock and follow the press. When I interview someone who's very smart technically but lacks intellectual curiosity, or someone who hasn't fully researched us prior to the interview, then that's a no-go. I need people who not only are functionally expert at what they do, but comprehend the business itself so they can plug their talents directly into the organization--reliable, upstanding adults who can talk straightforwardly about their contribution to the business. I also focus on their experience--what they learned and didn't learn."

Unlimited vacation days then fit right in for a company that values employees who can manage their own time. And sets a premium on efficiency and innovation. However, there is no one size fit all in the world of human resources, and offering unlimited time off might not result in increased productivity and a happy workforce for global companies with thousands in employee count.

Let's be realistic: There aren’t enough geniuses in the world to fill every job position. If that means giving a preference to employees who might be merely adequate but value hard work and loyalty, so be it.

As for our role as informed professionals, a premium on efficiency is hardly asking for too much. What makes it complicated is a world where thanks to social media, 24/7 connectivity demands that professional and personalbecome easily malleable.

One final thought for senior leadership: Would you be willing to risk possible misuse of unlimited days off in favor of increased productivity? Leave a comment, email In Good Company or connect with us on Twitter @VaultCSR.

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Aman Singh is the Corporate Responsibility Editor at Vault.com and the author of Vault's CSR blog: In Good Company. She is a New York University alum and previously wrote for The Wall Street Journal. Her area of work includes corporate diversity practices and sustainability, and how they translate into recruitment and strategic development at companies. Connect with her on Twitter @VaultCSR.

Comments? Send them to executivecareers@cnbc.com

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