HRM Practices at Netflix: Challenges, Opportunities and Recommendations

This report analyses the HR practices followed by Netflix, including its HR philosophy, hire and reward practices, and ways to maintain a high-performance workplace. It also discusses the challenges and opportunities faced by the company and provides recommendations for improvement.

Human Resource
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Discussing the HR philosophy of Netflix...................................................................................4
Explaining how Netflix maintains hire and reward practices.....................................................5
Analysing ways in which Netflix maintains high performance workplace................................7
Recommendations.......................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

Executive summary:
The aim of the report was to identify the importance of HRM practices that are followed
in any organisation. Also, the report had analysed the HR practice that are being followed in the
Netflix in United states and other parts of the world through especially analysing the hire and fire
policy that has been adopted by the firm over the year’s. Moreover, the report had analysed the
hiring, retaining and training at the Netflix through use of various models and theories. Further,
the challenges and opportunities in creating the best policies of HR at the Netflix had also been
discussed through this report. Lastly certain suggestions for the improvements in the current HR
policy had also been covered under this report.

INTRODUCTION
Human resource management is very important part of the any firm as it allows in
selecting hiring and retaining the best of the employees for the workplace. The present report is
based on the Netflix that is subscription based online platform that allows the individual to enjoy
variety of TV shows, film, series and much more. Moreover, the report will discuss the
philosophy of human resource that is followed by the firm over period along with hire and fire
policy that selects only qualified individuals and not pass out graduates.
Also, the study will discuss the difference in Netflix HR policy that is being followed in
United States and other regions around the globe. Moreover, report will identify the reward
systems and workplace practices that are followed in the company by taken into the
consideration various employment laws that are different while working globally. Also, the study
will critically analyse the current HRM systems that is being followed by Netflix to hire certain
employees through using the appropriate theory and models. Thus, this would allow quoted firm
to develop better policies in the future. Also, certain challenges in the current HR policy along
with the available opportunities of the firm in the future will also be covered under this report in
detail. Hence, it would allow the firm to make certain changes in the current policies that are
being followed by all the employees at the workplace. Lastly, certain suggestions will also be
given in this report so that work culture could be made more stress-free.
MAIN BODY
Discussing the HR philosophy of Netflix.
Netflix is the fastest evolving online platform that allows individual to watch several TV
shows and film by paying the certain amount of fee known as subscription. Thus, it can be said
that through this platform large number of people are able to watch their favourite shows and
series with no adds feature (Colbjørnsen, Hui and Solstad, 2021). Further, it is seen that Netflix
has remained the top most choice of entertainment especially during the times of pandemic in
which people were not able to go outside and enjoy. Moreover, in context of HR philosophy it
can be said it is based on assumption of management beliefs about the people that are working in
the company that defines how people should be treated at particular time. Netflix is concerned in
managing and taking care of all their employees so that right people could be hired and all the

goals could be achieved in the systematic manner. Furthermore, the company is active in
making changes in HR policies so that workplace could be made efficient and best employees
could be retained through building the co-operative behaviour. Also, it is seen that Netflix is
focused on building up the culture that helps the individual in making independent decisions,
avoids certain rules and share all the information openly without any kind of fear or hesitation.
In United States Netflix hires those individual who are able to think more in strategic
manner and are hard-working. Also, the quoted firm hires only those individual that are highly
skilled and possess technical knowledge so that all tasks could be carried out in smooth manner.
Also, the company follows “hire and fire practices” in various parts of United States.
According to this policy it does not like to retain the employees that are not performing up to the
mark and is not interested in hiring those candidates that are fresh college graduates. The reason
behind its policy is that it believes that these candidates does not have the required amount of
experience and thus they lack in the technical knowledge that is very essential for company like
Netflix that is operating on the large scale (Yang and Arthur, 2021). Moreover, Netflix does not
encourage employees to work from remote areas as it feels that it affects on the quality of output.
However, most of the employees resists to such policies that were prevailing in the Netflix in
United States as they believe that employees are not being valued. Further, the company was
using 360 degree and keeper test that allowed the firm in evaluating employees and further assist
Netflix managers in deciding whether to retain the employee or to fire. Also, this technique was
used by the firm so that effective leadership could be created within the team. Thus, hire and fire
policy according to the management encouraged healthier workplace competition among all the
employees working in United States.
When Netflix planned to expand globally it changed certain ideas such as it focused now
more on high performance so that every individual is able to contribute towards the success of
the team. Also, it allowed more freedom and responsibility all its workers so that people are able
to take certain ownerships and become smarter and creative (Chen and et.al., 2017). It does not
control on the staff that is working rather it helped them in positive manner so that best results
could be generated. Moreover, the company has set common goals for all the employees so that
proper alignment could be done. Also, to enhance cooperation managers of Netflix maintain
regular interaction with employees so that performance could be evaluated in better ways. Thus,
through adopting the new HR practices quoted firm is able to boost the overall productivity of

the team so that business goals could be achieved in well-defined manner. Thus, it can be said
Netflix while working globally had made major changes in HR policy along with following the
standard HR polices that was followed in United States.
This concept can be linked to the human capital theory that believes that individual
could be able to increase the performance through better trainings and skills so that better outputs
could be delivered in the future (Human capital theory, 2019). Thus, Netflix also needs to
develop proper training systems so that less skilled employees could also gain the opportunity to
work in company and develop new skills and deliver grater output for the company.
Explaining how Netflix maintains hire and reward practices.
It is very important for any organization to follow employment laws that helps in
maintaining better relationship between employers and employees. Furthermore, it can be said
that Netflix was very much concern about the HR Practices that it has developed initially and
thus it adopted same HR strategy while expanding into new regions. However, Netflix managers
found out that similar culture could not be adopted for all the employees while working in
different cultures (Wang and et.al., 2021). For example: In Japanese culture people do not have
the practice of expressing direct feedback either good or bad in large number of groups that is
common for all the employees that are working in United states. Furthermore, it can be seen that
Netflix is very transparent about the pay policies. Also, in certain reports it was seen that Netflix
was the highest paying among all the employers in the industry. However, many employees said
that earlier it has adopted standard paid time off policy where employees maintain record of
leave days and informed manager about the same but later eliminated such policy where
employees feel problems in co-ordinating with the supervisors about the leaves. Further, HR
policy based on hiring certain employees is done through a panel of 8 members where each
employee is interviewed through each panel member and if any of them rejects individual than it
is not further considered (Silva and et.al., 2019). Also, for all the new joining members Netflix
offers hand book named as cultural deck that is in form of manual that defines the work culture
in which the individual needs to work.
Also, in context of reward practices, Netflix does not provide any kind of bonus to the
employees apart from the basic salary that is being provided. However, it can be said that
company do reward those employees who have performed extraordinary well in accomplishing
any particular tasks at the workplace. Further, apart from this reward the company allows the

employees free lunches, coffee and flexible schedules so that it could develop self-motivation
among the individuals to work harder in this company. Moreover, in terms of reward systems
Netflix has developed new compensation systems for all the content that are running on this
platform so that best show, film or series could be awarded in the form of bonus. Although same
practice need to be developed as per the employees view but the company is not ready to
introduce such systems even while working globally as it feels that it is offering more salary than
the other competitors available in the market (Verma, Singh and Bhattacharyya, 2020). Also,
rewarding through 360 degree performance system also creates the feeling of disappointment and
feeling of inferiority among the employees that are working harder to achieve personal goals and
objectives. Moreover, having better reward system allows in better teamwork and collaboration
among the employees.
This concept of Netflix of reward giving could be better linked to Vroom expectancy
theory that believes that even when individuals have different set of goals but motivation among
them is derived only when it is known that continuous efforts will result in desirable rewards. It
is based on three components such as valence, expectancy and instrumentality where valence
refers to emotional attachments in terms of intrinsic or extrinsic motivation, expectancy is based
on the efforts that are given for specific performance and instrumentality is directly linked to
rewards (Nishii and Paluch, 2018). Thus, according to this theory Netflix should develop a
policy where employees satisfaction and loyalty is taken into considerations through developing
proper reward systems to keep them motivated and delivering the best outcomes.
Analysing ways in which Netflix maintains high performance workplace.
Netflix is majorly concern for delivering the high performance through developing
effective HRM systems that are often criticize by the other employees that are working in the
company. For instance, the manager of Netflix encouraged employees to rely more on common
sense and logic rather than the formal policies so that money could be spent wisely (Othman and
Lembang, 2017). Moreover, another critic is that there is no formal HR policy regarding travel
expenditures and employees were often questioned about certain lunch and purchase of
expensive equipment’s. Thus, such practice not only creates problems in better employer
employee relationship but also affects the performance at some point of time. Some challenges in
the HRM systems of the Netflix are as follows :

Recruitment policy : The major demerit of the company is having is hiring only experienced
employees and not newly pass out graduates that limits growth of the firm as certain benefits
remain unexplored.
Hire and fire policy: Also through this policy Netflix is not able to retain good employees for
long period due to not giving them second chance to prove themselves in case if any mistake is
been committed.
Technology: Through continuous change in the technological environment it would be very
difficult for Netflix to give training to the old employees that are less tech efficient. Hence, it
needs to give chance to all other candidates that willing to work in the company without having
any kind of experience (Zreen, Farrukh and Kanwal, 2021).
Culture of termination: Netflix is also adopting process like keeper test that allow the
management to terminate those employees who are not performing best according to these tests.
Such would be challenge for the firm as it might lose the most productive employees.
Change management: It is also seen that with changing environment there might be cases
where there is requirement of change in role among the employees so that work could be
performed easily. Also, for this purpose the firm need to provide proper training programmes to
all the employees to make them more flexible and creative while working in complex
environment.
However, there are certain opportunities that are available to the firm if needs to work
globally in various regions. Some are as follows:
Performance improvement plans:
Through developing proper performance plans Netflix would be able to improve the
productivity of those employees that are less efficient. Also, these plans would be able to create
motivation among those employees who have not performed well in due course of time.
Centralization of workplace:
Netflix also aims in increasing the performance of the workers through making the
workplace central and not allowing the individuals to work from the remote areas that impact the
overall efficiency of the workers (5 HR strategies you should learn from Netflix, 2021). Thus,
this would help in more team building and cooperation among the workers while working at the
central workplace.

From all the above points of opportunities and challenges it can be linked in better ways
to the high performance work systems that is based on creating the environment where all the
employees are able to take greater responsibility and involvement so that competitive advantage
could be gained in systematic manner. Also, through applying this model Netflix employees
would be able to voice certain opinions and suggestions so that better HR policies could be
adopted in the future. Also, this system would allow Netflix to follow the standard HR practices
along with ensuring them continuous growth and developments.
Recommendations.
It is to be suggested to the Netflix that it should develop more formal HR policies so
that better workplace environment could be developed among all its workers. Also, such policies
will have certain criteria on how particular decisions are made at the workplace beside the old
policy of hiring and firing that terminates the employees based on other views and opinions.
Moreover, formal policies would reduce the frequent performance reviews that creates the sense
of work pressure and dissatisfaction among the rest other employees (Iqbal and et.al., 2020).
Furthermore, it is to be recommended to quoted firm that it should conduct more training
programmes so that skills of old employees could be enhanced on the larger level and also those
workers who are less efficient also have the relative opportunity to prove in areas that are earlier
not being explored. Also, it would help in developing the best work culture for the Netflix as it is
working amongst the most diverse and larger groups around the globe. Also, it will help in
creating the self-managed teams that would also allow job security to all the employees.
CONCLUSION
From the above report it can be summarized that Netflix is the most popular among all
other online platforms and is successful in providing entertainment to large number of people
around the globe. Further, the report had analysed HR Philosophy that quoted firm had adopted
to attract, hire and retain major qualified individuals to achieve the various goals of the company
in timely manner. Also, the study had closely identified the HR policy that is been followed in
United States and other regions of the world and is supported through human capital theory that
aims at enhancing the skills of the individual through training programmes.
Furthermore, the study had analysed Netflix HR practices that includes hiring and
rewarding the employees for all the works that is been done. However, the report had also

critically pointed out the cons in the current HR policy of Netflix through linking to Vroom
expectancy theory that is based on identifying the three components that motivates the
employees to deliver certain output. Also, problems of implementing such policies globally in
regard to the different employment laws had also been covered under this study. Further, the
report had critically analysed the ways through which Netflix maintain high performance using
the HRM system that it is currently followed at the workplace. Lastly, two recommendations had
been given under this report so that Netflix would be able to retain the old employees and attract
new potential candidates that would further help in growth and development of the firm.

REFERENCES
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practices and strategies in streaming media services. Journal of Media Business Studies,
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Iqbal, S., and et.al., 2020. Impacts of HR Practices on Organizational Commitment: The
Mediating Role of Organizational Culture. Journal of Asian Business Strategy. 10(1).
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attributions and employee reactions. The International Journal of Human Resource
Management. 32(16). pp.3339-3369.
Zreen, A., Farrukh, M. and Kanwal, N., 2021. Do HR practice facilitate innovative work
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