How Do You Keep Your Best Employees From Quitting

I was recently asked the question, “What should I do to keep an employee that has quit from leaving.”

I was happy to answer the question because I have a perfect batting average as CEO of keeping employees from quitting.

That’s right. 0.00%.

Employees, in my experience, have usually made up their mind when they resign. It’s become an emotional issue, and it’s very difficult to overcome emotion. Thus my perfect batting average.

My view is simply, “Don’t let employees get to the point where they want to quit.”

We unabashedly stole our company culture from Netflix with a little bit of Zappos and Sandy Koufax thrown in. We were thieves and robbers, but I’d like to think we were just being smart.

I’ve always felt you can take inspiration from many different sources, not just from your industry.

I was fortunate to be exposed to Reed Hastings’ (CEO of Netflix) wonderful culture manifesto (Culture) right after we started operations, and many parts of it resonated with me. I shared it with our executive staff, and they liked it as well.

How do Zappos and Hall of Fame Baseball Pitcher Sandy Koufax fit in? We’ll get there. For now let’s focus on the six things we stole, er, borrowed from Netflix.

I want to emphasize again that I think Netflix’s culture is fantastic, but these six things really stood out to us:

A. Adequate performance gets a generous severance package.

That translates to 5% of your workforce being ineffective, so that one person can really wreak havoc. Hiring mistakes will happen, and you need to take quick action. That being said, handle these terminations with class and grace.

B. You don’t want brilliant jerks.

Hiring pressure can push you to hire a jerk, and you will likely regret it. We did hire a couple of jerks along the way. Shortly thereafter, they were given a generous severance package.

C. Responsible people thrive on freedom, and are worthy of freedom.

Instead, make the bold decision that Netflix made to increase employee freedom (shown brilliantly in slides 43 and 55). We did, and it paid off for the team. Do it, and your team’s motivation will go up big time.

D. There is No Vacation Policy, or said another way, take as much vacation as you want as long as you get your work done.

Hire the right people and this policy is self-correcting. By the way, a hidden benefit is that you don’t have to financially reserve for vacation when you go to a no vacation policy.

E. Act in the Company’s Best Interest.

Our theory was that it’s self-correcting. Employees that continually abused the policy would be given a generous severance package.

I do remember one employee who tried to expense a one-mile car trip to interview a candidate. Can you imagine receiving a $0.55 expense report? I couldn’t. We talked about it in our staff meeting, and one of his peers set him straight.

F. No Fixed (raise pool) Budgets.

We quickly gained a reputation for fairness by working this way. Employees knew we rectified any pay inequities, and it helped build employee loyalty and employee retention.

Okay, so you want to know how Zappos and Sandy Koufax Fit in. Here you go.

We loved Zappos’ customer service model of no scripts and letting the customer service team make the decisions, and we modeled our customer service organization after Zappos’. We regularly received accolades from our customers about our tremendous customer service.

We embraced Sandy Koufax’s “Keep it Simple” Mantra. Koufax was a two-pitch, and on many days only a one-pitch, starting baseball pitcher for the Los Angeles Dodgers. Most starting pitchers throw at least four pitches. Koufax dominated baseball by honing just two.

It worked brilliantly in baseball, and simplicity in business is a huge key to success. Take notice whenever you hear someone say, or, better yet, you hear yourself say, “It’s complicated”. Building a business usually isn’t that complicated.

All of this is great, but there is one more thing you, as a leader, need to do, no you MUST DO, to retain employees:

You need to really care about your team.

How to do it right: My Mom was diagnosed with cancer in 1998 when I was working for Maxim Integrated Products. Maxim’s CEO, the late Jack Gifford, made his personal physician, who I believe was a board member at Stanford Hospital, available for me to consult with. You bet that built loyalty.

How to do it wrong: I was working at another company as a senior executive when my daughter was born. I took a little time off to be with my wife and daughter.

The CEO of this company, “Bob”, was pissed that I took even one day off, and he made it known. Not just to me, but all the other senior executives. I left the company within a year.

By the way, my Mom is still going strong.

I love you Mom.

For more, read:

I work with startup CEOs to help them grow their businesses . I built several businesses from $0 to >$100M. Learn more at

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