Critical Analysis of Human Resource Management Practices at Netflix

This project critically analyzes the HRM practices at Netflix, including the Hire and Fire policy and recruitment strategies. It discusses the challenges and opportunities for sustainable HRM systems and recommends solutions. The project also covers the first HR policy used by Netflix in the USA.

Human Resources

Executive Summary
Human resource management is said to be the strategic approach to an effective
management of the people of the organization which helps the business in gaining competitive
advantage. HRM can also be said as the design which helps the business maximize the services
of the employee towards the strategic objective. Netflix is a world-famous organization which is
based in USA and has the business model of online subscription of streaming film, TV series and
documentaries. Hire and Fire policy is the HRM practice in which the business hires the
individuals which are the best in production and fires those which are lacking behind in the
productivity.

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Application of Hire and fire policy by Netflix and discussion on the first policy used in USA. 3
Analysation of recruitment practices of Netflix...........................................................................5
Critical analysation of the challenges and opportunities for sustainable in HRM system...........6
CONCLUSION................................................................................................................................7
Recommendations............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Human Resources of a business is that division which is charged with the finding,
screening, recruiting and training job applicants as well as the employee benefit administration.
HR plays a very important role in the helping the company towards dealing with the fast
changing business environment and a greater demand for the quality of employee in the 21st
century. This project is about the critical analysis of Netflix which is USA based organization
with the business model of online streaming platforms with paid subscription. This organization
was founded in 1997 in California by Reed Hastings and Marc Randolph. In this project the fire
and hire policy of Netflix will be highlighted and how its application has made this organization
successful. The first HR policy used by Netflix in USA is also explained in this project. This
project also provides the analysation of the recruitment practices of Netflix. With the help of this
organization the critical analysation of the challenges which will be opportunities of
effectiveness and efficiency are also highlighted in the following project. The analysation of the
HRM system will include the discusses on the relevant theory for the identification of the issues
and problems and then linking those issues and problems to the theories for developing the
solutions which can be effectively utilized by the HR management. This project will also provide
recommendations to the HRM of the organization Netflix with four strategies which it can utilize
for improving the possible solutions in their HRM policies and practices.
MAIN BODY
Application of Hire and fire policy by Netflix and discussion on the first policy used in USA
The hire and fire policy which the HRM of Netflix has utilized with effectiveness
suggests that the managers hire people internally or externally depending on whom they are
intending on firing within the year. These people which are hired by the organization helps the
company in meeting the annual turnover targets which can be used for analysation of the targets.
The goal of this company has been to fire certain percentage of employees on a yearly basis. This
is basically a process of screening through which the individuals are fired and hired
simultaneously (Yin and et.al., 2017). Hiring and Firing both are two main aspects of the
business. Hiring and firing in the organization occurs on the daily basis which sometimes is
considered to be the reason of which is helpful for the hiring of the employees.

In this policy of Netflix it practised Hiring policy which is centred around hiring only the
best individuals which are best fit for the performance of the organization. This has allowed
Netflix to ensure its quality which is helpful in the high-performance at the workplace. Netflix
always wants to work with the best as it is considered to be the way through which the business
achieves success and also develop new strategies. It is said to be helpful for the organization as
hiring strong individuals can result in increased productivity and also develop the brand image of
Netflix. For the selective hiring of the organization it is important for the organization to also fire
the individuals so that it can maintain the balance between the hiring and firing of the employees
in the organization. Firing of the less productive individuals can also be helpful for the company
to reduce the company to be more sustainable towards tits business operations.
Netflix has been successful in USA for the last decade. There has been multiple reasons
behind the success of this organization. The HR of this organization has utilized different
policies for gaining the success. The first policy which was used by the organization was
regarding the hiring process of the organization. Netflix in the first year of its business realized
that some of its services providing film were able to get a Grammy award which was very
effective towards its success (Schultz and et.al., 2018). Netflix identified this as an opportunity
for the development of the organization. As a result of this the Netflix utilized this as the HR
strategy of the organization to hire only the best performers in the organization. For balancing
out the number of hirings made in the organization the decision towards the organization HR
practice. It then had to fire the less performing individuals.
As a result of this strategy Netflix HR practices continued this procedure and continued it
to the extent that it resulted in famous policy which is now known as hire and fire policy.
Another one of the most shocking aspect to this policy was that as the part of hire and fire policy
there are no training and development for the employees. The main motive of this company is to
hire the best individuals which can develop the organizational image and productivity. These
practices of HRM has increased the competition between the workers to work hard in order to
gain an advantage in their productivity and quality for being selected as an employee for the
organization. This strategy will work very well in the global market as it is also a very
competitive platform and the tendency of Netflix for hiring the best in the business will help of
the organization gain competitive advantage and also develop be effective as well as successful
in the international business (Ababneh, 2021).

Analysation of recruitment practices of Netflix
Netflix is a very successful and larger organization which has the business model of
online streaming platform. Thus, the hiring strategies of this organization is also very different to
that of the organization. In order to get revolutionized in the entertainment in the business it is
important for this company to make sure that it is hiring the best employees. This has been the
strategy of Netflix for more than a two decades. It has been said that the recruitment practices of
this organization is very remarkable. The employees have to face very difficult technical
interviews. Along with that it is also very important for the recruitment practices fitting the
culture of the organization. The culture of Netflix influences the company to be productive and
have the best products and services in its market. There recruitment practices turn out to be very
important for making of the best decision regarding the workforce which leads the organization
to success. In the recruitment practices of Netflix it has to take subjective decisions which can
allow the business to improve the performance of the organization (Suharti and Sugiarto, 2020).
For ensuring that the hiring made by the company is fitting the hiring decisions of the
organization it is important for them to ensure that the hiring is needed to be done with the help
of asking the individuals about the interview questions. Netflix has understood the importance of
having strong decision-making as the interpersonal skill thus most of the question asked in the
interview section of the hiring process would be that to understand the compatibility of the
individual towards the hiring of the individuals.
The hiring policy of Netflix has always been centred around the hiring of only the best
adults. Thus, Netflix ensures that they would only hiring those individuals which are the best fit
to their operations for supporting the desire of high performing work place (Cater and et.al.,
2019). Netflix does not offer the hirings any bonuses as its classic perk can make the
organization a very desirable process. However, they offer their employees unlimited holidays.
In comparison to the other organizations the HRM of this organization do not waste time
screening resumes and job application forms. They directly look for the best and approach them
with great offers and image of the Netflix. For them superstars are the best options which
provides Netflix strong image and is a way of promotion of the business marketing. The hiring of
the best people by the organization is said to be the best way of inspiring, motivating and also
pushing for the better and best performance.

The benefit Netflix develop from these recruitment practices are, to inspire, motivate and
push towards better actions. Hiring of such individuals for this organization has the multiplying
effect on the right talent management and for the establishment of the high standards, Along with
that it develops an unusual culture in the organization (Signoretti and Sacchetti, 2020). The best
always want to work with the best therefore hiring of the best employees motivates the existing
employees of the organization. This is also another way with the help of which the best
employee help the other individuals to perform the best and also inspires the people with
successful techniques. In the recruitment practice of this organization it is important for the
business to hire the people as quickly as possible for ensuring the best people will always take
priority over filling the gaps in the resources. It is also important for the organization to also
increase the motivation of the individuals which are hired with the approach of ensuring that
every individual joining the team are of this company are best and most productive.
Critical analysation of the challenges and opportunities for sustainable in HRM system
The culture of Netflix is considered to be very unsentimental due to which it faces certain
issues and challenges. Most of these issues are regarding the happiness of Netflix and how
effective they are in comparison to other company employees. The approach used by this
organization for cutting of the staff for hiring new employees have developed fear in the hearts
of the employee which are not sure about their Job security (Silvester, Sarip and Hassan 2019).
This policy of Netflix has lacked some context as terminating of employees for hiring of new
employees. Due to this the company does not themselves witness any loyalty from the
employees. Constant hiring and firing of employees also result in increase of the HR operational
cost which could be reduced heavily if a strong relationship with the employees can be
developed. The following theories can be used for resolving the issues faced by HRM of Netflix,
Human Capital Theory :
Human capital as a term explains the educational attainment, knowledge, experience and
skills of the employees. According to which the application of human capital is said to be
relatively new and very effective specially for the management of the human capital. This theory
also suggests that inclusion of the greater training, skills and education can be very important for
increasing the productivity of the human capital. For Netflix it is essential to understand that
increasing of productive capacity through greater education and skills of training is also a way in
which this company will not only increase the productivity of the organization but also ensure

that it develops strong relationship with the individuals. As per this theory it is also very
important for Netflix to treat its employees as assets which after the firing of Netflix can result in
them being hired by the competitors of Netflix (Aagaard, 2017). Losing a hard-working
employee to the competitors can result in the loss of customers for this organization.
Contingency theory :
Contingency theory is the organizational theory which claims that there is no better way
of organizing the corporation for leading the company for making a decision. It can result in the
optimal course of action. This theory basically explain the leadership style which can be relevant
towards the different situation which are described as the task of relationship which helps in the
motivation of the employees for the planned aims and for reaching the pre-determined between
the leaders and follower. The motivation of the leadership is considered to be prominent towards
the staff members which provides clear and obvious direction towards the required customer
services. For working towards the goal and business profitability it is important for the
organization to have task motivated leadership which can help the business with prominent staff.
In this theory suggestions have been made towards finding the best individual which can effect
the individual's responsibility and also be able to correct the managerial decision and improve the
business. The leadership style of contingency theory is said to be pertinent for finding the right
individuals for the business which can also outline the task that are efficient and effective
towards the completion of the personal matters (Yasir and Majid, 2020).
The implication of these theories on the business of the organization will influence
Netflix and its employees to develop strong relationship with the customers which can provide
effectiveness to the business and also stay motivated towards the job performance. It will help
Netflix to plan strategies for development of the good relationship with the employees which will
increase the employee retention policy of the company and also develop the organizational
strategy for the company.
CONCLUSION
With the help of this project it can be concluded that the Netflix policy of hire and fire is
said to be very effective towards the performance of the company. In this project the analysation
of the different strategies which can be used by the organization are discussed. This project
highlights the first policy which was used by Netflix for the development of the HRM practices

for successful implementation on the workforce. In this project the importance of the Hire and
Fire policy and its application has been very successful for being used in the management of the
human force as it allows the organization towards being successful in the development of its
quality of products and services. This project is also successful in the analysation of the
recruitment practices use by Netflix. In this project different theories has been discussed for
being implemented towards the identification of the issues which can be used for the analysation
of the opportunities which can be effectively and efficiently used for the development of
sustainable HRM systems and focusing on the performance of the ethical practices. This project
will also provide recommendation towards the ethical practices and linking the theories with the
identified problems of the case which can be implied for the issues which are identified in the
future.
Recommendations
Netflix with its HRM practices being Hire and fire policy have utilized this HR practice
to hire the best individuals and for making room for them hire the less productive individuals for
influencing the sustaina7 ways Netflix reinvented HR, 2020ble development in the organization.
Following recommendations can be made to Netflix for improving their performance and also
retaining employees,
 For the achievement of the high-performance it is important for this organization to
ensure that the employees are a part of a team which work together for better
performance. Netflix should also ensure that the individuals which are not cost effective
should not be a part of their team even if they are brilliant (Likhitkar and Verma, 2017).
 Providing the employee freedom will also be very effective policy for this company as
the employee will develop responsibility and also work harder considering eh
competition which they have to face.
 Because there is very low job security for the employees of Netflix it is essential for this
company to ensure that its employees are paid the most in comparison to the market.
 For increasing the productivity more Netflix can also influence the employee with the
application of promotions and development strategies which will increase the competition
within the organization as well (7 ways Netflix reinvented HR, 2020).

REFERENCES
Books and Journals
Aagaard, A., 2017. Facilitating radical front‐end innovation through targeted HRM practices: A
case study of pharmaceutical and biotech companies. Journal of Product Innovation
Management. 34(4). pp.427-449.
Ababneh, O. M. A., 2021. How do green HRM practices affect employees’ green behaviors?
The role of employee engagement and personality attributes. Journal of Environmental
Planning and Management. 64(7). pp.1204-1226.
Cater, J., and et.al., 2019. HRM practices and effectiveness: a comparison of US Hispanic and
non-Hispanic family firms. Journal of Small Business and Enterprise Development.
Likhitkar, P. and Verma, P., 2017. Impact of green HRM practices on organization sustainability
and employee retention. International journal for innovative research in
multidisciplinary field. 3(5). pp.152-157.
Schultz, C.A., and et.al., 2018. Prescribed fire policy barriers and opportunities: a diversity of
challenges and strategies across the West.
Signoretti, A. and Sacchetti, S., 2020. Lean HRM practices in work integration social
enterprises: Moving towards social lean production. Evidence from Italian case
studies. Annals of Public and Cooperative Economics. 91(4). pp.545-563.
Silvester, Y., Sarip, A. and Hassan, M. A., 2019. The relationship between green HRM practices
and organizational citizenship behavior toward environment (OCBE). Journal of
Management and Operation Research. 1(18). pp.1-7.
Suharti, L. and Sugiarto, A., 2020. A qualitative study OF Green HRM practices and their
benefits in the organization: An Indonesian company experience. Business: Theory and
Practice. 21(1). pp.200-211.
Yasir, M. and Majid, A., 2020. High-involvement HRM practices and innovative work behavior
among production-line workers: mediating role of employee's functional
flexibility. Employee Relations: The International Journal.
Yin, D. A. I., and et.al., 2017. Causality between economic policy uncertainty and exchange rate
in China with considering quantile differences. Theoretical & Applied
Economics. 24(3).
Online
7 ways Netflix reinvented HR, 2020[Online]. Available through:
<https://www.sage.com/en-gb/blog/7-ways-netflix-reinvented-hr/>