Netflix is arguably one of the most forward-thinking firms on the Big Tech scene. And the company has pioneered numerous management innovations – giving it a reputation for forward-thinking practices when it comes to performance management.

Business Insider reported that Netflix encourages employees to interview at other companies for their own research purposes. I do wonder if this is taking innovative leadership a step too far – and what, if any, are the ethical implications of such a practice?

Former Netflix talent chief Patty McCord says the company actively encourages employees to take part in job interviews at other firms to:

• gauge whether they’re being paid enough in their current roles
• refocus on their professional aspirations
• reaffirm their loyalty to the Netflix brand

One of McCord’s predicted outcomes of this exercise is that Netflix employees will come to learn that “the grass isn’t greener”.

In her new book Powerful: Building a Culture of Freedom and Responsibility, McCord offers further insights into this somewhat unusual approach.

Being honest

“My experience is that you’re more honest with a perfect stranger than you are your own manager, after a while,” she says.

“You know what management wants to hear. But you go to talk to a perfect stranger and they’re like, ‘What do you want to do?’ And you’re like, ‘Well, actually, I’ve got a couple of ideas…’

“Let’s say you don’t really want the job, but you really like the people you met. Now you have a source of candidates for your company. It’s all about networking.”

Initially, there would seem to be something rather dishonest about this approach. At the Institute of Leadership & Management, we are constantly exploring what authentic leadership looks like and honesty is certainly part of our expectation.   

A good role model

Authenticity lies at the heart of the Institute’s five dimensions of leadership – alongside Achievement, Collaboration, Ownership and Vision. 

Integrity is associated with honesty, decency and high ethical standards. And authentic leadership recognises that honesty and fairness underpin ethical decision-making.  

As far as going for a job interview is concerned – if you have to pretend that you want a job because you’re effectively being a ‘mystery shopper’, then on the surface that does appear to demand a certain degree of duplicity.

If an organisation is encouraging its employees to engage in duplicitous behaviour, can it really purport to have ethically sound leadership? And does suggesting employees engage in interviews for “networking” purposes actually contravene rules against staff poaching?

An open approach

But there is a more optimistic way to look at this, which draws upon Adams’ equity theory.  Essentially, employees are less likely to be dissatisfied in their roles if they feel they’re being rewarded for their efforts at least as well as peers who are similarly rewarded in terms of input and reward ratio.

In that sense, the Netflix policy McCord advocates is wonderfully open – communicating the message: “Look, we think this is a terrific place to work. If you’re not so sure, by all means test us against other companies.”

Ultimately, Netflix wants to hang on to its best people. All of this demonstrates that the company is hugely confident in the relationship it has with its staff.

But in terms of poaching staff from other employers, it’ll be up to the individuals that the Netflix employees encounter on their interviewing rounds to check their contracts and assess the terms they have agreed with their firms on approaches from other companies. The response of these individuals to such an approach from Netflix might well present them with their own ethical dilemmas.

For more information about our research, visit our Institute of Leadership & Management website and join us on Twitter @InstituteLM