retail news in context, analysis with attitude

by Kevin Coupe

It was just a few weeks ago that Netflix was being applauded in certain circles for announcing a new benefit for its employees - up to a a year in paid leave for employees who have given birth to a new baby.

Which sounded highly progressive.

But now, Netflix is being criticized for not extended the policy to the approximately two thousand employees who work in the DVD rental division - you know, the folks who stuff the red envelopes - that actually generates more than half the company's revenue.

The Associated Press reports that "protesting groups contend Netflix is unfairly favoring the mostly high-paid computer programmers and other technology specialists working in its Internet-video service over the lower-paid employees who sort through discs and stuff envelopes in the distribution centers that get and send DVDs." And the argument is that the lowest-p[aid employees would actually be the ones who would benefit the most from the liberalized leave policy.

Netflix has responded to online protests by saying that its "DVD employees get bigger paychecks and better benefits than people in comparable jobs. 'We are regularly reviewing policies across our business to ensure they are competitive and help us attract and keep the best employees,' the Los Gatos, Calif., company said in a statement."

I do think there are two lessons here. One is that especially (but not exclusively) for high-profile companies, treatment of employees can become a highly public issue ... perhaps even a spectacle. Companies need to pay attention.

The second lesson is that perhaps companies need to construct personnel policies by thinking first about the people on the bottom, not the people on top or even in the middle. In part, that's just because technology often gives those people a bigger and louder voice than they used to have. And in part, it is because the people at the bottom often are the ones who provide the foundation on which a business is built ... the people on the front lines, responsible for doing the work and implementing the strategies and tactics decided decided upon at higher organizational levels.

I'm not sure Netflix was being malicious is how it structured the policy change. I think they probably were just being traditional in how they thought about the company structure.

The Netflix case, I think, is an Eye-Opener.
KC's View: