SHR018-2 - Netflix Case Study: HRM Practices, Policies, and Ethics

This case study critically analyzes Netflix's Human Resource Management (HRM) practices and policies, particularly focusing on its 'hire and fire' approach, talent acquisition and retention strategies, and the maintenance of a high-performance workplace. The report evaluates how Netflix's HR philosophy shapes employee attraction, retention, and termination policies, both in the United States and globally, considering varying employment laws. It examines Netflix's talent hiring and reward practices, emphasizing experience over fresh graduates and the challenges associated with its transparent pay policy. The study also assesses the company's commitment to sustainable and ethical HRM practices, including paid-time-off policies and employee motivation strategies, while addressing the impact of technological advancements and the centralization of the workplace. Recommendations are provided for improving Netflix's HRM policies to enhance employee motivation, provide sufficient training, and address criticisms related to remote work and hiring practices.

HRM PRACTICES AND
POLICIES

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Explaining Netflix HR philosophy that are help for retention, attraction and firing etc........2
Analysing how Netflix maintaining its talent hire and reward practices...............................4
Critically analysing the high performance workplace based on the sustainable and ethical
HRM practices........................................................................................................................5
CONCLUSION................................................................................................................................6
RECOMMENDATION...................................................................................................................7
Recommending Netflix for improving its HRM policies and practices.................................7
REFERENCES................................................................................................................................9

EXECUTIVE SUMMARY
The study is highlighting the challenges faced by the Netflix in regard to hire and fire
policy. The opportunity for the company is to hire the experience holder over the graduates and
centralization for the workplace. Further, recommended motivating the employees and provides
sufficient training for the same.
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INTRODUCTION
Human resource management (HRM) defined as the practices and policies required to
execute the routine of human resources such as staffing of employees, development of staff,
compensation management, performance management and also involvement of employees
in decision-making (Zhdanov and Mikirtichan, 2021). HRM practices and policies are refers
to all the activities which are includes routine of human resources in organization that is
staff development, employee staffing, compensation management, performance
management that are involved in decision making. This report is based on the case study of
Netflix, which was established in 1997 in Scotts Valley, California by co-founders Marc
Randolph and Reed Hastings. It is the world's leading Internet subscription service company
and offers documentaries, TV series, and feature films across a variety of genres and
languages.
The growth rate of the company is higher than compared to others because company has
overwhelming and great features that attracting the customers very well. There are regular
transformation helps to brings innovations and also creating ease for its subscribers (Veth
and et.al., 2019). It introduced the pay policy in order to this every employee may easily
view compensation that earned by other employees and top authorities of firm. They also
has termination policy through which they can terminate any employees period. The main
purpose of the report is to face the challenges and overcome the problems of the company.
The present report will critically analysis the HRM practices of Netflix regards to 'hire and
fire' policy. Further, the study will discuss the recruitment practices used by the cited firm.
Lastly, it analysis the opportunities and challenges of the company that focused on ethical
performance.
MAIN BODY
Explaining Netflix HR philosophy that are help for retention, attraction and firing etc.
Human resources policies are different according to the workplace and it is very essential
framework that can be used for smooth functioning. The policies helps in making environment
safe and secure through their procedure that perform function effectively. In US there are
various types of policies are uses such as, employment contracts that is used by firm when the
employee start job in company that helps in maintaining legislation and follows laws properly
that covers under it(Student, 2020). The policy related to leave is plays key role in determining
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the clear image of leaves that taken by employees on yearly basis. It has covered all the
information related to casual leaves, planned leaves, sick leaves etc. There is also another policy
that is in relevance to the employment termination policy, it is related to career and essential to
move ahead in career, through this policy employees cannot leave job according to their desires.
It has been critically analyses that employment termination policy bound the employee
when they got new opportunity in order to change the job for better life. Due to this, there are
various policies that are not working well for the employee in their job (Shah and et.al., 2020).
It revolves around the belief and assumption in management which are related to needs,
nature, value and their approach for work. All the belief and assumptions are help for
determining about how should be people treat. The main agenda of Netflix is related to the
people over process that helps them in work with dream team together by their way of doing
work effectively and the approach has become more flexible,collaborative, successful,creative
etc. Netflix has very popular for unique human resource practices and there are various types of
challenges faced by the employees related to the hire and fire policy. This policy is widely
practiced in US for expansion of their business as well as infrastructure.. Beside this, Netflix did
not hire fresh graduates or those who are working from remote locations.
According to Neil Hunt, is has been clarify that there are fix timing for employees in
order to work together and that is the reason there are many employees who were criticized due
to remote location (Setiawan and et.al., 2020). The human capital theory is helps the human
being in order to increases the productive capacity which are help in the skills training and
greater knowledge. On other hand, it has been argued that this theory is refers to overly
simplicity, flawed and confound on the basis of capital. In the year 2018, organization has
follow the transparent posy policy so that employees get motivated and compensation earned
which are also included the top managements. In the global market there are so many employees
who were contributed in order to doing the work more efficiently. According to survey it has
been identified that it generates revenue by pay policy. Beside this, there are so many employees
who were demotivated while they have seen the other employees pay scale (Madanat and et.al.,
2018). Employees are start comparing themselves with each other as recruitment and
termination policy are not working well for the Netflix because they are only hired those
candidates who are experienced and purposely not hire those who are fresh graduates. On other
hand, this policy is not cooperate with those fresher students who are like to join the
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organization which are are already popular in the global markets. In order to this, freshers are
not able to use there skills and knowledge for the firm, because of this hire those peoples who
belongs to the same culture in order to they fit into organization easily.
Analysing how Netflix maintaining its talent hire and reward practices
There are various kind of practices used by the Netflix in order to hire talented
employees who are able to fit in organization and also help increasing the productivity. For
hiring the best candidate it is important to create the standard high so that when the person apply
for the job get prior information regarding there criteria (Iqbal and et.al., 2019). Then it is
important to creating realistic job requirement, and another way is to ask those employees who
are already known and refer those who are connected to their company. Netflix is not focused on
qualified people because the main focus is on the experienced people. On other hand, there
hiring process is going to be tough for because they are focus on people who can be fit for the
culture. Secondary, it is focused on those who have technical knowledge and the interview
process is almost 8 hours and there are more than 8 members who are taking the interview.
Although the final result is in the core team hand and they are hire accordingly.
Beside this, it is analyses that there are various employees who have less patience that
are not able to crack the lengthy interview and also there are many peoples that don’t have
technical knowledge ,due to this they also not hired by the company. This is important to focus
on the reward policy so that employees get motivation in order to increases the capability of
work (Hauff, 2021). This policy is help for motivating the employee so that they can work
freely in office and enjoy at home or vacation. These type of practices are help for attracting the
professionals who are likely to success in the performance based environment. On other hand,
Netflix are also not believed in distributing bonus to the employees because they believe in other
reward by offering them vacations and holiday. Health and safety measures are one of the best
reward that can be provided by the organization.
Theory related to the requirement policies:
The Herzberg's motivation doctrine defines the two factor that are essential for company related
as motivators and hygiene factors as that lead in enhancing satisfaction level of employees. The
Netflix motivate their employees by appreciating their efforts and giving achievement to them in
terms of perks and appraisals (Assi and Effanga, 2021). The senior’s executives of the company
recognized the work of their subordinate and give recognition to them such as parsing them, the
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firm also provide with the interesting work to the candidates as they can choose the work
according to their choices. The organization also motivate their employee with the advancement
such as promotion according to their work.
The company look after the factors of hygiene such as company policies, supervision,
relationships, work condition, salary and security all these factors are maintained by the firm in
order to motivate the employees
Critically analysing the high performance workplace based on the sustainable and ethical HRM
practices.
On the basis of capability theory there are three essential factors of it such as ability,
motivation and opportunity. These three are the employee characteristics that are help for
contributing in the success. According to Adam smith, it has been analyses about people's
capability and functioning so that they can get the opportunities regarding resources and public
relations. There are different ways that are help to motivate the employees and with this theory
there re different opportunities given by the employees so that they can work efficiently.
Sustainable HRM practices are related to Paid-time-off policy, Netflix has launched this policy
for employees to take 10 days holidays and also provides few sick leave, it kept days off by
informing their managers (Alrawahi and et.al., 2020). This is the opportunity for worker as well
as for the company because it helps to stay them motivated and provides healthy work
environment. Hence, HR of Netflix must have to work on such aspect so that it generates the
positive impact over the business performance and stay employees motivated towards a firm as
well.
Recruiting system of Netflix- By using organization behaviour theory it has been
analysis that Netflix did not hire graduates from the colleges or those who wanted to work from
remote locations. There are Few employees criticized Netflix’s policy of not permitting
employees to work from remote locations, especially the situations it was expanding into global
markets.
Ever changing technology- Advanced technology tends to reduce the number of jobs in
Netflix which require less skill and to increase jobs requiring high skills. The shift from ‘touch
labour’ to ‘knowledge workers’ has resulted in retraining of employees on higher
responsibilities. Knowledge based training has become very important. As routine HR activities
done quickly and efficiently through computerization, HR managers can concentrate more
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effectively on the firm’s strategic direction such as forecasting personnel needs, planning for
career and promotion and evaluating impact of firm’s policies.
Act in Netflix’s best interest- The Netflix HR policies is described with only these five
words. It encouraged employees to rely on logic and common sense rather than any formal
policies. Human resources emphasizes that employees should spend company money frugally,
treating it as if it was their own (Al-Jedaiah and Albdareen, 2020).
Centralization of workplace- The Netflix has its unique service offering strategy from
other tech companies. It allows employees to give their suggestions regarding planning and
decision-making within the company. This activity helps to motivate their employees.
Change management- Netflix's HRM practices have to concentrate on responsibilities,
job assignments and work process whenever change occurs. It has play a vital role in
overcoming resistance to change through effective communication and counselling. They have
higher responsibilities to envision the future, communicate the vision to employees, set clear
expectations for performance and develop capability to execute by reorganizing people and other
resources.
Managing Human Capital- The management of human capital of company is
depending on the skill, knowledge and capabilities of individuals that can be an economic value
to the organisation. Moreover, it is analysis that dynamic capabilities theory helps the
company to face the rapid changes towards technologies it also improves the management of
human capital.
Unique culture of Termination- Netflix has organized the “keeper test” which is helps
to measure performance of the employees. In this test manager supposed to ask about the
preference of employees for leaving the firm, if employee's reply is now the team member will
out from the organization.
Performance development- Netflix eliminated formal reviews as they felt the
employees were too ritualistic and too infrequent. The managers and employees of company
converses about the performance as an organic and continuous part of their work. They also
provide the training lowing performers.
CONCLUSION
The above mentioned report concluded about Human resource management of Netflix
and how this help in success of organization specially hire and fire policy. This policy says that
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Netflix only hire experienced people and candidates whose goals are aligned with objectives of
the firm. Along with this the report also conclude how these policies work in US and how will it
work globally and how the company use human capital theory in relation with hire and fire plan.
In addition to this, report also shed light on the negative and positive impact of recruitment
process on the employees and company and the theory which is firm use in relation to
requirement is Herzberg’s motivational theory which talks about the two factor which company
can use.
Further, the report critically analysis the challenges and opportunities of effectively and
efficiently developing sustainable HRM systems focusing on performance and ethical practices.
Issues such as requirement system, changing management, every changing environment, unique
culture of termination and performance development. The report also consists of
recommendation and opportunities the which company can use to improve the policies. The
opportunities such as paid time policies and centralization of workplace. Lastly, the report
conclude the Netflix should focusing collecting measures of employee performance from
customers. Organisation can provide an adequate training for new technologies because it
allows to improve the internal environment of the organization. Netflix can be change the work
life balance of the employees through strong motivator in many instances of money
RECOMMENDATION
 For improve productivity of an individual and organizational effectiveness, it is
recommended to Netflix that looked not only at task performance, but also adding the
value and encourage their employees. The higher productivity ensures the lesser cost of
production and this creates a positive impact on the business performance.
 It is to be recommended that to the Netflix to focusing on collecting the feedback from
customers. This strategy can be provided to the employee and used for developmental
process. All this type of multi-source feedback is only effective when the organizational
culture is ready to improve the appraisal and the values process (7 human resources
practices, 2021).
 It is to be suggested to Netflix for adding the personal development session on regular
intervals so that employees can to improve the skills which depending on the goals. With
the help of this strategy, company can improve the performance of a company and also
raise the performance so that defined aim can be attained.
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 In order to High performance work system ensures that the HR of Netflix can provide
an adequate training for new technologies which are very popular according to current
and digital world and to their employees because it allows to improve the internal
process of the company, relevant markets, core competencies and structure of the
organization as a whole. This will lead to improving the efficiency and effectiveness of
the HRM practices for the organization.
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REFERENCES
Books and Journals
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Intensive Development of the Company. In International Scientific and Practical
Conference “Russia 2020-a new reality: economy and society”(ISPCR 2020) (pp. 436-
440). Atlantis Press.
Veth, K.N. and et.al., 2019. Which HRM practices enhance employee outcomes at work across
the life-span?.The international journal of human resource management. 30(19). pp.2777-
2808.
Student, S. B. M., 2020. Do HRM Systems & Practices Influence the Start-Up Organisation?-A
Critical Review.SMS Journal of Entrepreneurship & Innovation. 6(2). pp.83-93.
Shah, N.,and et.al., 2020. The Influence of Electronic Human Resource Management Use and
Organizational Success: A global conceptualization. Global Journal of Management and
Business Studies.10(1). pp.9-28.
Setiawan, N., and et.al., 2020. Recruitment Analysis on Employee Performance With Variable
Control As Moderating On Manufacturing Company. Ilomata International Journal of
Management. 1(3). pp.102-111.
Madanat, H. G. and et.al., 2018. LEVEL OF EFFECTIVENESS OF HUMAN RESOURCE
MANAGEMENT PRACTICES AND ITS IMPACT ON EMPLOYEES'SATISFACTION
IN THE BANKING SECTOR OF JORDAN.Journal of Organizational Culture,
Communications and Conflict. 22(1). pp.1-19.
Iqbal, N and et.al., 2019. Linking e-hrm practices and organizational outcomes: empirical
analysis of line manager’s perception. Revista Brasileira de Gestão de Negócios. 14(21).
pp.48-69.
Hauff, S., 2021. Analytical strategies in HRM systems research: a comparative analysis and
some recommendations.The International Journal of Human Resource Management. 32(9).
pp.1923-1952.
Assi, P. N. and Effanga, E.O., 2021. Optimal manpower recruitment and promotion policies for
the finitely graded systems using dynamic programming. Heliyon.7(7). p.e07424.
Alrawahi, S., and et.al., 2020. The application of Herzberg's two-factor theory of motivation to
job satisfaction in clinical laboratories in Omani hospitals.Heliyon.6(9). p.e04829.
Al-Jedaiah, M. N. and Albdareen, R., 2020. The effect of strategic human resources
management (SHRM) on organizational excellence.Problems and Perspectives in
Management.18(4). p.49.
Online
7 human resources practices. 2021. [online]. Available Through
<https://www.aihr.com/blog/human-resource-best-practices/>.
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