Netscape's Work Culture
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NETSCAPE'S CULTURE contd...Netscape offered a
wide range of on-campus services to its employees. Apart from the standard
package of health and vision benefits (See Exhibit III), Netscape also
offered a ‘Total Health and Productivity'plan. The on-campus services
program was introduced through an agreement with a San Francisco based
service provider, LesConcierges[14].
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Under the program, employees were able to get some of
their routine work done like dry cleaning, paying bills, getting the oil
changed in their automobiles, etc. They could also consult a dentist or
even have a massage. The program also helped employees to plan for
holidays as well as order gifts. Sick children of employees were also
looked after at a child-care facility near the campus for US $10 a day.
Since employees worked for long hours, Netscape gave them paid
vacations. Employees were given a six week paid sabbatical[15] after the
completion of four years of full-time employment. Incentives were given
to employees at all levels, not just senior employees. Employees earned
bonuses on the basis of individual or group performance. Senior
executives were entitled to bonuses in the range of 1-30% of their
annual salaries. |
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There was also an annual company-wide bonus plan based
on revenues per employee and customer satisfaction figures. Employees also
qualified for bonuses based on their manager's discretion, for specific
projects/assignments.
Netscape developed innovative methods of reducing employee stress and
preventing them from shifting to rival companies. The company was one of the
pioneers in introducing the ‘canines-in-the-cubicle'policy, which allowed
employees to bring their dogs to work. The company believed that this policy
increased productivity by reducing stress. The company also felt that pets
were good icebreakers for shy workers, and that they forced employees to
take breaks from their work.
Another element of Netscape's success was its quick recruitment process. The
company's employees strength had increased from 2 to 330 in just 15 months
between April 1994 and July 1995. The company attracted promising student's
fresh out of college by offering them a lot of incentives including beach
parties, free clothes, signing-on bonuses and free computers.
Once they joined, to keep up morale, employees were offered stock options,
which translated into huge profits when the company performed well. Netscape
launched an aggressive recruitment campaign: it went to some of the most
popular campuses like UC Berkley, MIT, Stanford, Cornell, Michigan, and
Carnegie Mellon in the US.
Netscape's efforts to build a flexible and supportive culture seemed to have
motivated employees and made them highly productive. According to an
analyst[16], employee retention is the key to success in the IT industry.
Compared to the industry attrition rate of 30%, Netscape's attrition rate
was 20%. Netscape's management believed that more than the pay check,
employees were interested in meaningful work, independence, flexibility, and
a desire to learn on the job.
Tim Garmager, principal of the Human Resources Strategies Group at Deloitte
& Touche LLP in Chicago, confirmed this belief: “There is less emphasis on
pay today than ever. In today's job market, employers need to look closely
not only at the benefits they offer but at the culture they engender.”
THE SETBACK
EXHIBIT I - NETSCAPE – CHRONOLOGY OF EVENTS
EXHIBIT II - NETSCAPE TIME
EXHIBIT III - BENEFITS FOR NETSCAPE EMPLOYEES
EXHIBIT IV - NETSCAPE CONSOLIDATED STATEMENT OF OPERATIONS
[14]
LesConcierges, founded in 1987, offered a comprehensive range of business
and personal services to corporations as a work/life benefit for employees.
[15]
A leave sanctioned for advanced study and research.
[16]
Jeffrey Pfeffer, a professor of organizational behavior at Stanford
University's graduate school of business in Palo Alto, California, and
author of The Human Equation: Building Profits by Putting People First
(Harvard Business School Press, 1998).
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