When sports psychologist, culture coach and author Dr Pippa Grange was recently tasked with helping a tense team navigate a high-stress acquisition discussion, she intervened with a surprising activity.

“I took them trampolining. Everybody said it was ridiculous, but within 10 minutes they were all laughing. It broke the tension and helped them regain perspective,” says Grange, who is a keynote speaker at AHRI’s upcoming National Convention and Exhibition in Melbourne, and is also conducting a masterclass on identifying and leveraging deep wins at work.

“Fun is a form of release. It’s a neurological, chemical and hormonal reset, and an opportunity to rebalance from over-performance and stress.”

Grange has worked as a psychologist with high-level soccer, AFL, rugby league and Olympic teams, with extreme endurance athletes, and with businesses all over the globe. 

One of her career highlights was working with the England soccer team at the 2018 World Cup. 

“They got to the semis after a long period of underperforming and the nation celebrated with them,” says Grange.

No matter her client, she has one core aim: boosting performance while also fostering a healthy, supportive culture.

“HR and sports psychology complement each other. Both are about helping people find their best and perform well. In this way, leaders are like coaches, and vice versa – always seeking the balance between output and wellbeing,” she says.

She believes the key to high-performance cultures is building strong relationships through honest connection, storytelling and genuine feedback, whether on the sports field or in the office. 

“The quality and character of relationships that we have with each other will determine the level of performance that we’re able to output,” says Grange, who, after working in Australia for 20 years and Los Angeles for two, now lives in England’s Peak District.

She was originally attracted to sports psychology because she liked the idea of working with motivated people.

“I thought this would provide opportunities for both one-on-one and systems work. It felt like an opportunity to create real change.”

As she got into the field, she realised that motivated humans are complex. 

“Most of the work I’ve done is about the human being, not their performance. [I’ve helped] people understand who they are, how they operate best, what they want and how they can get there.”

It’s not about her coming in and being a performance “guru”, she adds.

“If you’re not focused on both the person themselves and the system they’re operating in, you won’t find high performance.”

Team bonding for improved performance

On the sports field and in the workplace, performance starts with teamwork, says Grange. But this can’t be imposed from the top; it needs to come from the ground up through mutual understanding and clear communication around goals.

“Start with understanding what actually motivates your teams. It might not be what you think. Motivation builders are communication, purpose and feedback. Discipline builders are clarity, feedback, clear methods and skill building.

“In sport, it’s not all about the end goal, it’s also about what we’re working on this week. And that’s a nice translation into some workplaces too. It’s about a group’s clarity of purpose over a block of time.”

Keeping a team on track requires regular debriefs, she says.

“The ‘hot debrief’ after weekly or daily performance and ‘emotional hangover work’ after big events both speak to strong, cyclical feedback cultures that normalise continuous conversations about performing and succeeding while being human.”

“We used to see resilience in terms of bouncebackability and grit. For me, it’s a lot more to do with adaptability and being allowed to be a whole human.” – Dr Pippa Grange, sports psychologist and author

Busting misconceptions about high-performing teams 

Over her career, Grange has sought to unpack, break down and replace some of the destructive narratives that shape our lives.

Part of that work has manifested in her book Fear Less: How to Win at Life Without Losing Yourself, which is about living with less fear and more freedom.

“Fear is amplified or lessened in cultures and environments as much as in individuals’ minds. There’s a lot you can do in systems and processes, and with symbols, language and power dynamics, to lessen it and build confidence,” she says.

Just as fear can hold us back, so too can a constant pursuit of productivity.

Grange maintains that high-performing teams shouldn’t come at the cost of wellbeing, and having good, caring cultures shouldn’t come at the cost of winning. High-performance and good culture aren’t mutually exclusive. 

“Workplaces are under so much pressure for profit or shareholder values, and this creates a downward flow where people can [feel like] never-ending productivity machines. The level of burnout we’re seeing is not random.”

To rejuvenate their minds and spirits, people need space to both rest and recover, which are two different things, says Grange. 

“Recovery is about finding the space to regenerate our creativity and curiosity, our humour and our energy.

“Creating ‘psychological space’ for people means they don’t have to perform constantly and can regenerate. Compromising on wellbeing is only a short-term gain for a person and an organisation.”

So how can companies help employees find psychological space to recover? It can be as simple as giving permission, setting good boundaries around working hours and allowing the sharing of stories and experiences, she says. 

“When companies start talking about what high-performance looks like, they need to recognise that it’s a triangle of work, rest and recovery. It’s not just a line between work and rest.”

What generates motivation, she says, is people’s ability to be authentic and share their stories with each other.

“Everybody who walks through the door of a workplace is asked to buy into a story, a vision and a purpose. Stories shouldn’t just come from the top, but also from the shop floor and the home offices. They should be an exchange. It’s making everyone feel like they genuinely belong and are part of something.

“You need practices that genuinely build on belonging, not just inclusion.”

Building more resilient teams

While some people may feel that ‘resilience’ has become somewhat of a buzzword that’s tightly linked to output, Grange says its meaning has evolved.

“We used to see resilience in terms of bouncebackability and grit. For me, it’s a lot more to do with adaptability and being allowed to be whole and human while performing, versus living in roles, categories and boxes. It’s about minimising drama [while] being real and honest, allowing emotions to arise, but still processing them.”

How do you help employees and teams foster resilience? 

“It’s principally about quality relationships that provide a social web for all challenges. Cultures that embrace courage, vulnerability, challenge, care and the will to change are resilient,” she says. 

Anticipatory guidance and foresight helps boost resilience, she adds. If something tough has happened, such as a round of redundancies, giving people space to ask questions, air concerns and share perspectives is important. 

“People find it much tougher to maintain resilience when they get ambushed by circumstances, or if they’re kept in the dark. Telling the truth about where things are at and allowing people to participate in being resilient makes a big difference.” 

Culture work is unlike other kind of organisational work, says Grange, and culture leaders often need different timescales, methods and measures to drive real change. 

“Culture, like ethics, should be a verb – a doing word. It’s daily work that lives in interactions and exchanges, as well as in big initiatives,” she says.

“It’s an ongoing effort to create an environment that supports psychological safety, trust and compassion, and it’s also building systems that actually reward and resist what you do and don’t want to see in the culture. Great culture is signified by an organisation that is present, observing, focused and active in considering ‘what ought we to do’ – and then actually doing it.”

A longer version of this article first appeared in the June/July 2024 edition of HRM Magazine.

Dr Pippa Grange will be speaking on  cultivating authenticity and vulnerability in the workplace at AHRI’s National Convention and Exhibition in August. Don’t miss the chance to hear from inspiring thought leaders and master practical strategies for now and the future. Secure your spot today.

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Businesses stand to gain a lot when they embed trust at their core. As well as being morally important, it’s an organisational enabler. 

Research conducted by Paul J. Zak, Founding Director of the Centre for Neuroeconomics, found that high-trust companies gain 76 per cent more engagement from their employees, 40 per cent less burnout and 50 per cent more productivity. Also, their employees take 13 per cent fewer sick days.

“Trust can bring a lot of additional discretionary efforts, increased creativity and innovation,” says Will Harvey, Professor of Leadership at Melbourne Business School. 

“Trust is also incredibly important in terms of retention. Once you’ve got people who feel a sense of belonging, and that they can be themselves, that’s the sort of organisation people are going to not only work harder for, but also want to stay with.”

On the flip side, a lack of trust can cause severe and long-term damage. On a macro level, economic instability, globalisation and industrial dislocation, combined with the rise of misinformation and disinformation, are all driving people from the establishments that have supported western societies since the Industrial Revolution. 

Businesses’ own internal practices are also introducing risk. There is no shortage of recent examples of high-profile businesses that have had their trustworthiness called into question. Whether they’re under the microscope for claims of price-gouging, widespread underpayments, the ‘moral blindness’ of certain leaders or unethical business practices, it’s safe to say trust in our institutions is eroding.

“There’s a polarisation effect in society that has always been there, but with social media and the algorithms behind it, reinforcing the content people are seeing, it has polarised us further,” says Harvey. “That creates a structural polarisation effect; more and more people are divided.”

Harvey points to geopolitical issues, climate change and the failed Voice referendum as examples of conflicts that could be spurring similar results in Australian workplaces. This can further impact work relationships, he says, which may already be under stress due to remote/hybrid work setups and tensions over return-to-office mandates. 

This means HR has an opportunity, once again, to use challenging global circumstances as its burning platform to encourage change. 

“In HR, there is the psychological contract between an organisation and its employees, and underpinning that is trust,” says Harvey. “If you build trust within an organisation, it enables individual employees [and] the wider stakeholders, as well as the leaders of an organisation, to be truly authentic in terms of who they are and what they stand for.”

Trust and psychological safety 

Trust supports collaboration and ideas sharing. It underpins a transparent, open culture and is critical to the pursuit of psychological safety at work.

Novartis Professor of Leadership and Management at Harvard Business School Amy Edmondson, one of the world’s leading thinkers on psychological safety, says trust is paramount due to the complexity of the contemporary business environment.

“Uncertainty is a given,” she says. “We lack a perfect line of sight on the future, so we are required to do things for which there is risk.”

She says trust and psychological safety are prerequisites for people to overcome the natural inclination to stay silent, and instead to speak up with a new idea, admit a mistake or provide potentially unpopular feedback.

“Performance in today’s environment of uncertainty and interdependence is very much dependent on psychological safety and trust.”

But this isn’t on employees to solve; organisations need to create the right environments. Take Icon Water, an Australian utility company, for example. In an attempt to break cycles of silence that often surround challenging topics impacting employees’ mental health, it developed the ‘building trust through storytelling’ initiative.

“Trust accounts for about 30 per cent of variation in performance. Dependability was a little over two times as important as benevolence-based trust.” – Rob Cross, Senior Vice President of Research for i4cp and Edward A. Madden Professor of Global Leadership at Babson College in Wellesley, Massachusetts

This allowed its workforce the opportunity to hear stories about mental health from keynote speakers from all walks of life. This has included fellow colleagues, a former politician, CEOs of local charities such as Lifeline and Menslink, former Australian Defence Force soldiers and mental fitness educators. 

Hearing stories from a diverse and broad network highlights the myriad issues faced by different individuals and communities and “injects ownership and empowerment to the workforce”, according to Icon Water.

After the initiative was implemented, many employees found the courage to speak up and share their own stories without fear of retribution, and felt more able to support others.

While this was an effective way for Icon Water to mitigate against polarisation in its workforce, efforts to embed psychological safety will look different in every organisation, says Edmondson.

“Importantly, psychological safety is not an organisational-level phenomenon; it’s a group-level phenomenon. There can be as many differences in psychological safety across teams within a company as there are differences between companies.”

Mapping patterns of high performance

Once psychological safety and trust are embedded into an organisation’s fabric, one of the greatest benefits to be gained is improved performance levels.

High-performance researcher Rob Cross is an expert on the intersection of trust and positive outcomes. As the Senior Vice President of Research for i4cp, and Edward A. Madden Professor of Global Leadership at Babson College in Wellesley, Massachusetts, Cross maps patterns of collaboration across organisations to analyse the effect of trust on high-performance teams.

His work draws links between who interacts with who to get work done, how they make decisions and who energises or blocks others.

“The team is the primary unit of value creation in organisations – but they’re not really managed,” he says. “Individuals are managed, they have feedback, and the units are managed. [There should be team] guidelines that people can follow on start-up practices and ways of establishing trust early.” 

However, findings from a recent i4cp study show that trust involves a fundamental trifecta of interdependent forms, says Cross. There is benevolence, or the feeling of psychological safety; competence, or knowing the person can do what they say they can do; and dependability, or integrity that comes with matching their words with actions. 

While all elements are necessary, he says, when it comes to performance outcomes, nothing beats trust in others’ competence.

“Dependability is the most important form of trust in predicting team effectiveness and market performance in the metrics we’ve looked at. Trust accounts for about 30 per cent of variation in performance. Dependability was a little over two times as important as benevolence-based trust.”

This recent finding – yet to be published – overturns some existing wisdom. Team cohesion and interpersonal relationships have long been considered the pinnacles of team effectiveness, he says. However, given changes to remote work and rapidly forming and changing teams, the priority has become trust in competence.

“We have all these teams being formed in an ad hoc way, very rapidly and with very little structure,” he says. “You build [trust] by putting structure into the work and holding people accountable for their deliverables.” 

This could involve guidelines for team communication and feedback, as well as processes for accountability that are followed consistently, he says.

It could also be a good idea to set up knowledge-sharing activities to further the positive effects of demonstrating competence.

This could involve show-and-tell-style presentations where employees present successful projects they’ve worked on, or setting up opportunities for colleagues to shadow each other for a short period of time.

How to respond when trust is broken

Organisational trust can be volatile. While there are myriad benefits to a business’s performance when trust levels are strong, it only takes one misstep to lose decades worth of trust deposits.

With strong leaders at the helm, trust can slowly be rebuilt. But with laissez-faire or absent leadership, employees can lose trust in the entire organisation.

A 2016 study of engineers who were deemed to have laissez-faire leaders, published in the Journal of Economics Finance and Accounting, found that, when a supervisor did not meet their subordinates’ expectations for presence and involvement, it significantly eroded the employees’ feelings of trust – not only in the boss, but also in their organisation.

“Performance in today’s environment of uncertainty and interdependence is very much dependent on psychological safety and trust.” – Amy Edmonsdon, Novartis Professor of Leadership and Management, Harvard Business School

The authors said that, because a leader was the representative of the organisation, the supervisors’ lack of consideration seemed to be “regarded by employees as a reflection of the organisation’s indifferent approach to themselves”. 

Rebuilding trust requires a strong and unwavering commitment from leaders and their teams, who have to buy into its importance, says Gauri Maini FCPHR, Founder of The Culture Advantage.

“A checkpoint for me is, ‘How often do we review performance against revenue and profit targets?’ We need the same disciplined protocols to review trust and lead indicators such as advocacy, brand health, stakeholder experience and reputation.” 

Even if a company or team is hitting its revenue or performance targets, they may still be dysfunctional and distrusting, she says.

“It’s more important than ever to have a robust metric to gauge our progress on the societal and planetary impacts of any activity we have stewardship of.”

HR as enablers of high-performance teams

Processes and cultures that support both accountability and trust must be established quickly once teams are created. This is where HR’s coaching and leadership development work is worth its weight in gold.

Edmondson suggests coaching managers to learn the skills needed to create transparency and clarity about the nature of the work or any challenges, such as active listening, accountability and clear communication. 

“HR’s job is to ensure growth and development opportunities for everyone, especially managers,” she says. “If there have been events or situations that have led to a climate of distrust, you need to talk about the elephant in the room.

“Often you will need help from a facilitator in the organisation, or outside the organisation – someone to come in and lead a fresh start and help people have difficult conversations,” she says. “You can’t do it for them. You have to help people get the skills they need to do it themselves.”

Teams with poor levels of trust and engagement will often require interventions.

Maini recalls a former client where previous toxic leaders had left a vacuum of communication and trust deficits. Rebuilding trust began with a discovery process to determine executives’ strengths, values and aspirations.

“We were aiding the communication because uncertainty and ambiguity are the enemies of trust,” she says. 

“The previous leader was someone who didn’t really encourage people to have dialogue with each other. So the executive team had got into a pattern of having meetings after the meetings, or meetings before the meetings, but never speaking up in the meetings.

“So, whether it was mistrust or just habit, people didn’t feel safe enough to talk to each other about things that are important for the organisation to move forward and perform.”

She says deep-discovery meetings – held over the course of a year – revealed the team was aligned on their aspirations, but diverged in their methods. That realisation was a
game-changer.

“For them to understand each other’s aspirations and values, it was just mind-blowing. Their engagement scores improved in a year,” she says. 

Other techniques included creating a buddy system to build shared investment in another team member, and creating safe environments for people to raise issues.

Overall, Maini says high-performing and high-trust environments deliver stronger outcomes because there is a culture of speaking up.

“It’s not that there are fewer mistakes… But people are calling them out and doing something differently,” she says. 

“For leaders who care about social impact and who want to contribute to the creation of an inclusive, equitable and just society, [organisational] trust is a critical enabler.”

A longer version of this article first appeared in the April/May 2024 edition of HRM Magazine.

Develop the necessary skills to build and sustain a high performing work team and tap into the full potential of team members with this short course from AHRI.

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There’s a good reason we don’t drive our cars at full speed down the highway for thousands and thousands of kilometres without stopping. Okay, there are two reasons. One, that would be illegal. Two, it would seriously damage your car’s mechanics.

During the pandemic, many of us were those cars speeding down the highway. We were stuck in a culture of hyper-productivity and panic working from dawn to dusk to help our businesses survive once-in-a-lifetime business challenges (and in a bid to prove ourselves valuable enough to retain).

But driving at that speed was never something we could sustain. And now, instead of zooming down a highway, we’re navigating complex, winding roads that require us to slow down and determine new routes. But many people can’t move forward at all because they have no petrol left in the tank.

“We’re seeing incredibly high rates of burnout and mental health issues across workforces,” said Aaron McEwan FAHRI at AHRI’s 2023 National Convention and Exhibition (NCE) last week.

Gartner research, which surveyed 2280 employees across a variety of regions and sectors with strong representation from Australia, shows that employees performed well during the height of the pandemic.

“In 2022, 96 per cent of HR leaders said the vast majority of their employees were meeting or exceeding their key performance targets, but this came at an enormous cost.”

Meeting targets is great, on the surface, but McEwan says the issue lies in how they were meeting those targets.

“We’ve got 45 per cent of HR leaders who are at least moderately concerned about unsustainable [workloads and] overwork. And then there’s 14 per cent of HR leaders who are really concerned about their employees who are both complacent and completely overworked. That’s a pretty dangerous combination.

“We can’t continue to perform like we did during the pandemic.”

AHRI NCE delegates can access a range of helpful resources from the event here.

Employees can’t keep up

Developing high-performing teams is a foundational aspect of working in HR, says McEwan.

“We find high performers, we want to keep them in our organisations, we want to learn from them, and we want to teach the rest of the organisation what high performance looks like,” he says.

However, Gartner’s research shows that only a third (29 per cent) of HR leaders are confident that their organisation’s current processes are effective at helping employees achieve and sustain their current workloads.

Less than half (41 per cent) of employees described themselves as being in the optimal stage of work – that is, an environment where they feel they can give their best efforts and do so in a sustainable manner.

“There are 24 per cent of people who are sitting in the ‘at risk’ area and 21 per cent are already feeling damaged. So there’s a significant percentage of our workforce that are worried about whether or not they can keep pace.”

“I think we will talk about the pandemic being the point in time that changed people’s relationship with work dramatically.” – Aaron McEwan FAHRI, VP Research and Advisory, Gartner

This results in a loss of enterprise contribution, says McEwan.

“About 50 per cent of employment value comes from individual task performance and the other half comes from what we call ‘network performance’, which is working through others.”

Enterprise contribution drops by around a quarter and intent to stay drops to just 14 per cent when less than half of your organisation is considered to be ‘high-performing’, he says. 

So what can leaders and HR do to pull back performance gains? At AHRI’s Convention, McEwan shared four things he believes could be working against organisations.

1. A lack of clarity

The key to a high-performance culture is clarity.

“You know what to do. You know how to get there. And you’ve got all the resources you need to make it happen,” says McEwan.

Without clarity, people can still perform, he says, but they’re less likely to perform well over time.

“We liken it to somebody going on a hike. You know the conditions when you start out, you can see everything in the pathway ahead, but if the weather changes and a storm rolls in, all of a sudden those conditions aren’t quite as clear. We think this is where a lot of employees are currently sitting.”

2. Employee complacency

Almost a quarter of HR leaders are at least moderately concerned about employee complacency, found Gartner. There’s an overall sense of a lack of ambition and drive among some employees at the moment after a sustained period of running on empty.

This is felt in things like the ‘quiet quitting’ phenomenon, which may just feel like a passing trend, but could actually be indicative of a longer-term shift in how employees – especially younger people – feel about their work. 

“In a few years time, we’re not going to be sitting here talking about ‘quiet quitting’ or ‘the Great Resignation’, but I think we will talk about the pandemic being the point in time that changed people’s relationship with work dramatically.

“People want to work to live, rather than live to work.”

Some employees are drawing a line in the sand and putting boundaries around the discretionary effort they’ll offer.

“And I think that around 95% of organisational strategies are built on the assumption that [employees] will go above and beyond. So when they don’t, we don’t meet our organisational targets because we built that assumption into our forward planning.”

3. Change fatigue

The average employee experiences nine changes on a day-to-day basis, says McEwan. These could be operational/task changes, new processes, not having access to your colleagues or the resources that you need, etc.

“Change fatigue is at its highest rate that we’ve ever seen before,” he says.

“As a result of that, 64 per cent of employees are experiencing changes that mean they now have to work harder. And that fatigue is not just from working harder, it’s from working in more complex ways, where lots of changes are happening each day.”

4. Work has become too complicated and time-consuming

Not too many people’s job descriptions would align with the work they’re doing today, says McEwan. In many respects, that’s a good thing. It allows for fluidity and fresh opportunities to keep employees engaged in their work. 

However, this is also indicative of the unforeseen complexity that our jobs have taken on in recent years. And when we encourage employees into this unknown territory without enough guidance, we’re setting them up to fail.

“I think that around 95% of organisational strategies are built on the assumption that [employees] will go above and beyond. So when they don’t, we don’t meet our organisational targets.”

“What we end up doing is creating work to do work,” says McEwan. “That’s doing significant work outside of formal workloads and goals. What that does is reduce our ability to sustain our performance by 12 per cent.”

This means that instead of having enough time to tackle our increasingly complex workloads head on with an appropriate level of clarity and pace, we get stuck in a hamster wheel of unproductive busyness, which has knock-on effects for performance.

So what’s the solution?

The solution isn’t to place a range of prescriptive measures in place or impose too many guardrails, says McEwan. 

“We need to guide employee agency and clarify the conditions so employees can make better decisions without constraints.”

HR and leaders can do this by utilising different cues. The first being a ‘performance cue’.

“It’s about providing context to your decisions, so employees can determine an efficient pathway towards high performance.”

As culture export and author Shane Hatton put it in a previous article for HRM, “Put the pin on the map to show people where they’re going, but let them choose the route to get there.”

McEwan uses the example of a Canadian financial services company called Laurentian Bank.

“They’ll give employees context and background that helps them better understand and predict the implications of their work-related decisions.”

For example, when rolling out its approach to hybrid working, employees watched a video defining Laurentian’s suggested approach, which outlined the scope of decisions for teams to make. Employees also completed a survey that guided them to choose a work preference persona, which were designed to represent the major ways of working within Laurentian.

“They focus on proactive rather than reactive information, so employees have all the information they need before they have to make a decision about where they’re going to put their effort.”

McEwan says HR and managers can also use ‘pace cues’ that don’t simply encourage or promote wellness, but build it into the work itself.

“Don’t get employees to do yoga over their lunch break to recover from burnout. It’s about simple things like having a prescribed time each day where people put down their tools.”

The last example is a ‘progress cue’ – that is, how do we recognise high-performance actions in the moment, rather than waiting until the end of the year to tell employees they did a good job?

“We need signposts and rewards all throughout the year. By the time an end-of-year bonus lands in their bank account, an employee might not even remember what it was for.”

He refers to an organisation that pays small progress bonuses when employees hit key milestones on a goal, rather than waiting for the goal to be completed.

It’s also important to be cognisant of what you’re rewarding. For example, are you calling out a worker who is consistently staying back late for their ‘loyalty’ and ‘dedication’ to the business?

Not only is that reinforcing that individual’s potential work addiction, it also signals to those around them that in order to be rewarded and acknowledged for your efforts, you need to be working yourself into the ground.

Instead, think about acknowledging people for their efforts in new ways. For example:

• Call out someone who was able to develop an efficient process to reduce time spent on a task.
• Celebrate a team that has figured out a better way to communicate with each other, rather than filling people’s diaries with endless meetings.
• Acknowledge the manager who is an expert at fairly and evenly delegating tasks among their team.
• Reward the person who is making the most strategic relationships rather than working the most hours.

“If you move towards guiding employee agency, you end up with 63 per cent of employees in the optimal workers category [as opposed to 41 per cent without].”

It’s about shifting away from simply supporting employees to make the right moves to subtly guiding them to do it, he says. That’s when you unlock truly high-performing teams.

Improve your ability to recognise the signs and symptoms of mental health conditions and learn effective strategies to manage health and wellness in the workplace with AHRI’s short course.

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Organisational transparency is generally considered a good thing for workplace culture. It helps to ensure the right people are recruited and fosters a culture of inclusion and trust. But is it possible for transparency to go too far, and lead to ritualistic and cult like practices?

This is what Netflix has been accused of. The organisation has experienced rapid growth over the last decade and has added 2000 employees to its ranks this year alone.

“As you scale a company to become bigger and bigger how do you scale that kind of culture?” asked Colin Estep, a former senior engineer at Netflix in a Wall Street Journal (WJS) expose (paywall) – featuring insights from 70 former and current staff members. In other words, can the high performance tactics used to get an organisation off the ground be viable when the company balloons in size?

The answer: perhaps, with some difficulty. Another intriguing question is whether, given Australia’s workplace laws, the streaming giant could export its culture to this country.

Questionable practices

The specific aspects of Netflix that might not work down under are a few of their stranger policies.

The first is the practice of ‘sunshining’. In June this year, Netflix’s chief communications officer Jonathan Friedland made the news for using the ‘N-word’ in a meeting, while trying to make a programming point about the use of offensive language. To make up for his transgression, Friedland participated in sunshining – which is where employees publicly admit to misdeeds and apologise in front of a group of people. Unfortunately for Friedland, the sunshine didn’t absolve him and he was fired.

Then there is the performance management technique, the ‘keeper test’, where managers are asked to assess employees by whether they would fight to keep them. Managers have said that they felt pressure to be harsh with this test, or risk “looking soft”.

Netflix CEO Reed Hastings has reportedly applied the keeper test several times. Former chief product officer Neil Hunt, one of the company’s first employees, creator of the program curation algorithm, and decades long friend to Hastings – succumbed to it just last year. Hastings told Hunt that as the company had grown and expanded, someone else was more suited to the position.

According to the WJS, in a recent meeting attended by Netflix public relations executives, one such executive says he fears being fired on a daily basis. When asked how many people felt the same, a number of people concurred.

One of the more common transparency practices of Netflix is around pay. The streaming service entrusts executives at or above the director level with very sensitive information – including subscription data, contracts and the salaries of each employee. To Netflix’s credit, they reportedly offer double the standard pay rates for new recruits and grant raises per annum of the six figure variety.

The organisation has offices throughout the US and Asia, as well as two European bases in London and Amsterdam. The Netherlands-based arm, however, encountered problems trying to import the culture and make it work with local laws.

Legally speaking

So, if Netflix was to open shop down under, would the culture align to the Fair Work Act? HRM asked Trent Hancock, principal lawyer at employment law firm McDonald Murholme, to weigh in on some of their practices.

Netflix’s bluntness in the delivery of feedback about performance and conduct can be a good thing, says Hancock. “It allows employees to know where they stand in terms of their employment and how they might improve on any deficiencies that the employer perceives,” he says. “That kind of blunt feedback can also serve as defense in a termination related claim.”

But, says Hancock, blanket policies like sunshining can be dangerous, as they don’t cater for employees with mental health issues. Putting vulnerable employees under that type of pressure could leave the organisation open to a worker’s compensation claim if the feedback isn’t provided in a reasonable way.

The sunshining practice could also constitute bullying if a direction is being issued that employees must participate in the process. “In Australia, workplace bullying is essentially comprised of three elements: repeated behaviour that’s unreasonable and that poses a risk to occupational health and safety. So the practice could certainly delve into this territory,” says Hancock.

In terms of the keeper test, Hancock says that the organisation could be at risk of exposing manager bias. “If a manager wants to dismiss an employee for a reason that is unfair or unlawful, and speaks about it openly in the workplace, the employee could rely upon this information in a termination-related claim,” he says.

Cultural fit also isn’t reason enough to dismiss an employee – but there are some concessions. “The idea that an employee is not a good culture fit needs to be related in some way to their conduct, for example, if they don’t comply with policies and procedures, which can give rise to a valid reason to dismiss,” says Hancock.

“Similarly, if an employee is not a good cultural fit because they interact poorly with their colleagues, that then becomes a performance issue, which can also be grounds as a valid reason for dismissal.”

If the dismissal for reasons of culture fit were to happen during the first six months in a large business of first 12 months in a small organisation, this could be permissible as an employee can’t submit an unfair dismissal claim during this timeframe.

Hancock also says the apparent immediacy in which employment is terminated could lead to a heightened level of unfair dismissal claims. He cites an example of this from the WSJ article, where a former employee claims to have been perceived as a star performer one day, and out the door the next  – seemingly without warning and without being granted the opportunity to improve their performance.

But, as the organisation appears to pay generous severance payments, this could serve as a saving grace. “Ordinarily the condition to a receipt of a payment like that is the execution of a release agreement, in which the employee agrees not to take any action against the company, which could reduce the liability in claims made against Netflix,” he says.

Similarly, the reportedly high paychecks that Netflix pays seems to suggest that employees will tolerate more. “In Australia, most employees who earn over $145,000 per annum aren’t protected from unfair dismissal. Under those circumstances, for the employees that Netflix would have in Australia that earn over that amount, the company wouldn’t need a valid reason to terminate their employment, as they can’t raise an unfair dismissal claim.”  

A culture where some work in fear is kind of counterintuitive to one of the usual aims of transparency – to establish trust. Netflix’s culture may currently be one of high performance, but as the organisation continues to grow, they may just need to change tack.

Photo credit: Helge thomas

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