Counterintuitively, paying employees significantly more than the market rate can be more profitable. It attracts A-players and changes the dynamic from a zero-sum negotiation to a collaborative effort to grow the entire business. This fosters better relationships and disproportionately larger outcomes where everyone wins.

Leaders struggling with firing decisions should reframe the act as a protective measure for the entire organization. By failing to remove an underperformer or poor cultural fit, a leader is letting one person jeopardize the careers and work environment of everyone else on the team.

Instead of an extremely difficult hiring process, Netflix casts a wide net and uses the first year to assess fit, resulting in a high (~20%) attrition rate. The company is transparent about this, offering the chance to work on hard problems with great people in exchange for less job security.

When facing emotionally difficult decisions like firings or reorgs, it's tempting to optimize for making people happy. The correct mantra is 'serve the business, not the people.' A successful business ultimately benefits everyone involved. This principle provides clarity and helps you make the right, albeit painful, call.

To clarify difficult talent decisions, ask yourself: "Would I enthusiastically rehire this person for this same role today?" This binary question, used at Stripe, bypasses emotional ambiguity and provides a clear signal. A "no" doesn't mean immediate termination, but it mandates that some corrective action must be taken.

To manage the fallout of the failed Adobe deal, Figma offered a voluntary exit package (3 months pay) to anyone no longer committed. This 'Detach' program filtered for motivation, ensuring the remaining team was fully bought-in for the intense period ahead, with only 4% taking the offer.

After the Adobe deal collapsed, Figma launched "Detach," letting any employee leave with severance. This filtered for commitment, reset the team for a "hard-charging startup" mentality, and provided a graceful exit for those who were tired or had joined expecting to work at Adobe.

Firing someone feels adversarial until you reframe it as a win-win. The employee wants to be successful and valued; if your team isn't the right place for that, helping them move on is a service to their career, not a disservice. This mindset changes the entire dynamic.

Employee retention now requires a customized approach beyond generic financial incentives. Effective managers must identify whether an individual is driven by work-life balance, ego-gratifying titles, or money, and then transparently tailor their role and its associated trade-offs to that primary motivator.