Netflix HR Philosophy and High Performance Work System: A Case Study

This case study analyzes Netflix's HR philosophy in shaping employee attraction, retention, and firing policies and practices. It also examines how the company maintains its hiring and reward practices globally and its high-performance work system based on sustainable and ethical HRM.

Case Study Netflix case study

Executive summary
Human resource management is the strategic approaches that have the effective and efficient
people or management in organization or company such they can help for developing the
business competitive advantage. It is also designed to maximize the workforce performance in
services of an employer with having strategic objective and goals. It also helps the organization
for coordinate, plan, direct the administrative function. This kept the business for working with
better coordination and serves the link between an organization and its employee. This examined
various key theory and practice of HRM and also about the ethical expectation in practice that
meet with contribution in organization. The report analyzed organization relating to some
relevant business strategies in performing the ethical, effective and efficient with having human
resource management in given organization context.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Netflix HR philosophy in shaping the employee attraction, retention and firing policy and
practices.......................................................................................................................................1
How Netflix maintain its taken hire and reward practices globally............................................3
High performance work based on sustainable and ethical HRM system....................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Human resource management refers to the proper utilisation of skilled employee and also
make the use of efficient existing human resource in companies. It is also known as primarily
concerned with the management of people within their given organization, focusing towards the
policies and system. This play the effective role in organization and human resource department
are responsible for employee benefits, employee recruitment, training and development, rewards
management and industrial relation etc (Wu, 2021). Netflix was created in Scotts valley, by Marc
and Reed Hastings. In past time, they work together which is known as pure software. The
company websites, which was launched with more traditional pay pre-rental method. The ideas
were about Netflix when he forgot to return the move by its due data and ended to pay for movie.
The company delivered the one billion DVD, but still began to move away from their original
core business models and introduce more about the video through using internet, live streaming.
Netflix which worked through licensed and distributed independent films through using the
division that is known as Red envelope entertainment. This report will explain about the human
resource philosophy that helps the organization employee shape in retention, attraction and firing
the practice and policies. Along with this also about how the organization maintain its talent in
hiring and rewards their employee globally, that same thing offered as differ globally set.
Moreover, discuss the organization maintain the high performance based on the sustainable and
working towards the ethical conduct of human resource management system.
MAIN BODY
Netflix HR philosophy in shaping the employee attraction, retention and firing policy and
practices
Attracting and retaining and candidates: One of the most interesting HR policy of Netflix for
hiring the candidates is that the company do not care about the educational qualifications of the
employees. The company believes that as long as an employee has the capability and ability to
perform job better than others, the qualifications do not matters. This is the most attractive policy
for the job seekers as the company prefers knowledge to solve over the qualification and
experience of the candidates. The company hires candidates which can culturally and technically
fit the company (Raju and Reddy, 2020). Even in the interview process, the company do not ask
any technical questions, rather it asks questions which helps in assessment of personality of the
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job seeker. Another attraction to job seeker is that the company is ranked in one of the best
companies to work for in the world. The company hires and retains the employees who put the
company and its norms before anything else.
Retention and Firing policy: Netflix have a HR philosophy of hire and fire culture. Hire and
fire policy is the approach in which a company hires an employee on the temporary basis with
but the clear understanding that there is no job security for their work in the company. In simple
words, it is the HR policy which hires employees on an agreement that they can fires at the drop
of a hat. The company have a worldwide business and a reputation to maintain. The company’s
HR policy is such that it does not hires the fresh candidates i.e. the candidates who do not have
any experience in their work (Al-Jabri, Allawzi and Abushmaes, 2021).
The company retains the employees who are high performers and high achievers. The
employee who do not work as per the company’s standard they are fire with a severance
package. Even though the company have this “hire and fire” policy which is not much popular
besides US, the company have not received any negative effects of this cultures. The HR policies
of Netflix and unique and may seem negative, but the company is still considered a one of the
most preferred places for job by job seekers. Apart from this policy, the company do not hire
candidates who work from remote locations. As per the Product Manager of Netflix i.e. Neil
Hunt, the company wants better access to its employees. He wanted the access to all the
employee under 90 seconds. He also believed die this access the company can have a better
product management team.
Impact of HR policy of Netflix in United States: Even though the culture of hire and fire is
considered normal in United States, most of the parts of globe do not consider this culture right.
The policy is acceptable in US. The company’s policy of centralised location and hiring
candidates who live by have been successful in US (Jaworski, 2021).
Impact of HR policy of Netflix Globally: The policy of hire and fire is practice widely in US, it
is still unclear if the same practice is followed in other parts of the world such as Asia. Even
when the result was unclear, the company expanded into international market through following
the same policies. The other HR policies of Netflix such as hiring only experienced candidates
and hiring employees on the basis of technical abilities have been considered as major success
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for the company even outside US. There are many candidates who believe that they possess the
abilities and did not get jobs due to their lack of qualification. Netflix, in this culture have
provide the job seekers the opportunity to prove themselves.
However, the company’s policy of hiring employees who live nearby and not hiring
candidates who live on remote areas have received negative consequences especially since it
have expanded in all over the globe. In some countries the culture of hire and fire is not
acceptable or they do not understand this policy completely yet (Agnihotri and Bhattacharya,
2021).
How Netflix maintain its taken hire and reward practices globally
Netflix do not have any formal reviews and it does not provides employees with bonuses.
Even when the employment laws differ globally, the company follows its HR policies for hiring
and retaining employees just the same in all over the world. These policies are applicable in all
over the world and applied in all the countries even when there are different employment laws in
distinct countries. Netflix provides the basic employment policies just same as the other
companies. However, some of its HR policies are unique, but are acceptable internally.
Netflix works in the best interests of its employees. It can be explained better with the help of
AMO (Ability, motivation, and Opportunity) model. The theory states that there are three work
system components such as abilities, opportunities and motivation which shape the
characteristics of employees as well as shapes their contribution towards the company. As per
AMO theory, the organization can attain its goals more effectively when it is served by a system
which attends towards the Ability, motivation, and Opportunity of employees (Humble, 2018). It
means if the company is able to enhance the ability of employees, motivate them and also
provide them with the opportunities to contribute and grown in the company, they will give their
best in the company.
Netflix’s hire and reward policies are just the same. The company hire employees on the
basis of their abilities and retains the employees who are contributing well towards the company.
The company do not have formal reviews as it believes these formal reviews are ritualistic and
infrequent. The employees are motivated by the informal reviews such as 360 review. Also the
company have very transparent pay policies. The transparent pay policy allows the employees to
view the compensation earned by their colleagues. It motivates the employees to perform better
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and earn more. The company provide better job opportunities to employees which encourages
their growth and development.
High performance work based on sustainable and ethical HRM system.
Netflix is the highly recognised firm in their market field; their productivity is increasing day by
day. CEO of the company believes in the policy to hire those who compliment their company’s
environment. Human resource team of the company conducts the weekly based survey instead of
annual survey for improving their work place performance. Company’s HRM panel is highly
knowledgeable and possess a good skill that makes them to hire the talent who fits their work
place environment (Werner, 2021). Netflix policy can be explained with the help of HPWS
framework:
High performance work system:
This theory states that it is the system which enhances the involvement of every
individual who are working in the particular organisation. This theory is the specific part of the
HR practices, which is used to enhance the employee engagement with the company or to
increase their knowledge and skills. Netflix company also focus on their employee knowledge
based training, therefore they provides the suitable training which aims to enhance their
employee’ skills and knowledge about their work.
To ensure the employee security:
HPWS model guides the businesses to develop trust worthy relationship with their
employee so that they retain to them. Netflix Company believes in providing the safe and secure
work place environment to their employee, so they will carry out their firm operation effectively.
Netflix company offers the high pay to their employee as compared to other organisation,
therefore for high pay they also wants their employee to work in a manner that will helps them to
achieve their goals and objectives. It is also found that company have the policy for transparent
pay which helps them to implement the inclusive working culture with this employees are able to
know what their peers are earning, this transparency is beneficial to develop the trust worthy
relation with their employees.
Selective hiring:
Hiring that makes to fulfil the requirement of job post makes good sense as compared to
the simple hiring. HR team always hires those candidates who possess good knowledge
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regarding their business. Therefore HR team of the Netflix conducts the interview which nearly
runs for more than 3 hours, they look the personality and knowledge of the candidate who
complete fits their work culture. It helps them to develop the environment, in which the
employee communicate with each other or to carry out the work by working as a team.
Training with commitments:
Every HPWS firms conducts the training with commitments which involves the focused
and object based training, that mainly aims to develop the knowledge of the employee to solve
the critical problem or to enable them to develop the sense of responsibility towards their work.
This HPWS system helps the Netflix Company to conduct those training that are required for
their employees, which also account the goals and objective of their company, so that employee
develop more focus to adapt the knowledge to complete their job role with maximum efficiency.
Timely organise the rewarding activities:
It is the most efficient practice which the organisation ever does; retention of the
employee depends on their trustworthy relation with their firm. Workers always work for the
organisation who appreciates their work or to give them appraisal, which enable the workers to
work with the company for longer period. Therefore, Netflix also believes in this policy they
appreciate their employees work at good extent, also allow them to give their feedback so that
they will provide better working environment to their employees (Wisshak and Hochholdinger,
2018). HR team of the company consider all the ethical practices to be followed at their work
place, they ensures that there should be no discrimination takes place. Such practices and
regulation helps the company to generate good revenues.
According to the contingency theory, it is the organisational practice which aims that
there is no such other way to structure the corporation or to take the effective decision. It can be
understood with the help of example as – if the employee of the company keeps coming late,
then in such manager has the responsibility to converse with the employee to know the reason, if
the rationale behind this found improper or irrelevant, then contingent manager allow to take
strict action towards the employee (Lewin and Teece, 2019). It will help to develop the discipline
in the work place system, so that every employee will practice organisational policies and rules.
Therefore Netflix also found to believe in such policy as CEO of the company states that there
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should be good discipline so that every employee practices their company’s policies in order to
maintain the supportive organisational culture.
CONCLUSION
From the above report it had been concluded that, organization which do not carry about the
educational qualification for their hiring in employee. Basically, the company believes that
employee performance and efficiency for working is only important for them. Along with this
shape employee in such a way that keep attraction, retention, firing policy and practice that could
keep the organization for working with more effective manner. The organization also keeps
working towards various countries through which they can effectively keep hiring for their
employee. In working with globally business this could keep the organization for having the
huge profit and growth towards the business activities. While also examined about the hiring and
rewarding function in organization and how they keep their employee for working with more
effective manner. The company follow the laws differ through which they are being more
applicable for working with various huge sector. This also explained about how high
performance activity in organization and ethical system for working towards the human resource
management. Moreover, ethical system which must be important for the organization in keeping
their employee for working and keep them motivated. AMO theory, which helps the organization
for rewards function. Contingency theory and high performance work system that needs to make
organization for working with effective things. This theory helps organization for working with
globally and keeps their estimated towards the huge hiring for workforce.
Recommendation-
Organization need to improve the high performance activity for their employee. While this seems
to be important for the organization in having the best contribute to the succession of team.
However, having such type of part in organization this means that employee are always being
expected for working with better strategies and ensure them for working with more effective
manner. Along with this it might be important for improving the employee performance level
from which, organization can easily earn some huge amount of profits and keep their better
market position. In Netflix worker that earn with top-market payment and having no bonuses
and long term incentives and they are being responsible for their own development. Freedom and
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responsibility that also required for improvement, which help the organization for working with
some innovative, be smart and creative ideas. Moreover, this keeps the organization for working
well and makes the employee for having some responsibilities towards their work. It is stated
that Netflix Company has good work place culture, but they also have the policy to not hire the
college passed graduate. HR team of the company ensures the good on boarding experience for
their employees. Company can also proceed to undertake such policies which allow their
employees to show their contribution in firm’s decision making process. It will enable the
workers to develop the responsibility towards company’s goals. If the employees are allowed to
give their views over particular strategy then it will give them sense of satisfaction as they are
important to their company.
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REFERENCES
Books and journals
Agnihotri, A. and Bhattacharya, S., 2021. Netflix: The Firing Machine?. SAGE Publications:
SAGE Business Cases Originals.
Al-Jabri, H., Allawzi, A. and Abushmaes, A., 2021. A comparison of euphemistic strategies
applied by MBC4 and Netflix to two Arabic subtitled versions of the US sitcom how I
Met Your Mother. Heliyon. 7(2). p.e06262.
Humble, J., 2018. Continuous delivery sounds great, but will it work here?. Communications of
the ACM. 61(4). pp.34-39.
Jaworski, B.J., 2021. Netflix: Reinvention across multiple time periods. AMS Review. pp.1-14.
Lewin, D. and Teece, D.J., 2019. Human resource management strategy and practice: from
individual motivation to dynamic capabilities. In Handbook of research on strategic human
capital resources. Edward Elgar Publishing.
Raju, M.K. and Reddy, A.R., 2020. Need of ‘Hire and Fire Policy’with Individual Pay Structure
for Improving Quality of Education System in India.
Werner, J.M., 2021. Human Resource Development: Talent Development. Cengage Learning.
Wisshak, S. and Hochholdinger, S., 2018. Trainers’ knowledge and skills from the perspective of
trainers, trainees and human resource development practitioners. International Journal of
Training Research. 16(3). pp.218-231.
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Wu, X., 2021. Research on Human Resource Management System Based on Internet of things
technology. Journal of Frontiers of Society, Science and Technology. 1(6). pp.7-11.
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