I really like Netflix’ approach…here is Harvard Business Review’s “Executive Summary” of the article (my comments in parentheses):
Hire, reward, and tolerate only fully formed adults. Ask workers to rely on logic and common sense instead of formal policies, whether the issue is communication, time off, or expenses. (If you’ve hired well, your employees won’t take advantage of you. If you worry about them taking advantage, maybe it’s your hiring methods that are lacking.)
Tell the truth about performance. Scrap formal reviews in favor of informal conversations. Offer generous severance rather than holding on to workers whose skills no longer fit your needs. (Natural conversations will bring out the truth more than stilted, programmed “checkoff” box attributes. Also, I’ve worked in enough places to see that often, those employees that aren’t fully-formed adults are treated the same and promoted the same as those who do act properly and professionally: how is THAT good for morale?)
Managers must build great teams. This is their most important task. Don’t rate them on whether they are good mentors or fill out paperwork on time.
Leaders own the job of creating the company culture. You’ve got to actually model and encourage the behavior you talk up.
Talent managers should think like businesspeople and innovators first, and like HR people last. Forget throwing parties and handing out T-shirts; make sure every employee understands what the company needs most and exactly what’s meant by “high performance.”