SHR018-2: Netflix HRM - Sustainable Systems, Performance & Ethics

This report provides a comprehensive analysis of Netflix's Human Resource Management (HRM) practices, focusing on the effectiveness and implications of its unique 'hire and fire' policy, both within the United States and its potential global applications. It critically evaluates Netflix's recruitment strategies, emphasizing the company's focus on experience and cultural fit over formal qualifications. Furthermore, the report examines the challenges and opportunities associated with developing a sustainable HRM system at Netflix, considering performance and ethical practices, and addresses potential resistance from employees, employee turnover, and cultural barriers when implementing such systems in diverse international markets. The analysis incorporates the AMO (Ability, Motivation, and Opportunity) theory to highlight how Netflix can shape its workforce to align with its organizational culture and objectives, ultimately suggesting recommendations to enhance Netflix's HRM policies and ensure their successful implementation in a global context. This document is a student contributed assignment available on Desklib, a platform offering study tools and resources.

Human Resource
Management
SHR018-2

Table of Contents
Executive Summary.........................................................................................................................3
INTRODUCTION ..........................................................................................................................1
Main Body.......................................................................................................................................1
Why do you think Netflix was successful in its human resource practices, especially regarding
their “hire and fire” policy? Discuss first about the policy in the United States, and then how
you think it will work globally?..................................................................................................1
Critically analyse the recruitment practices of Netflix ..............................................................3
Critically analyse the challenges and opportunities of effectively and efficiently developing
sustainable HRM system with focus on performance and ethical practices...............................3
CONCLUSION ...............................................................................................................................5
Recommendations............................................................................................................................6
References:.......................................................................................................................................7

Executive Summary
Human Resource management is the integral practice for every organisation to handle
their man-force. In an organisation to manage the human resource different strategies are
developed and executed in an effective manner and also HR policies are implemented for the
ethical and fair management of the employees. The report will discuss the different HRM
policies of the Netflix and their essence and importance in the functioning of the employees and
also their impact on their performance. The Hire and Fire policy of the Netflix is critically
evaluated in the report. The challenges and opportunities related to the Sustainable HRM is
evaluated. At last the recommendation that can help the company to enhance their HRM
practices are discussed.

INTRODUCTION
Human resource management refers to the practice of handling the manpower of an
organisation in order to keep them satisfied and also to engage them into high performance. The
human resource management is the complex task in current diversified workforce culture and the
competitive business environment (Agnihotri and Bhattacharya, 2021). HR manager of the small
and big size organisations develop and research on different HRM practices and policies in
order to manage the workforce effectively. The purpose of the report is to understand that human
resource is the biggest asset of the organisations in order to maintain the high performance
within the organisation. The present report is the case study of Netflix Inc. that discuss about
evolving HRM practices at the organisation. The Netflix is the leading online subscription
service provider and in 2019 is ranked 5th in the Fortune's list of 100 Fastest- Growing
Companies. The case study has discussed the deep insights about the implemented HR policies
in the Netflix organisation in terms of recruitment, termination, pay scale, training etc. The case
study states that Netflix successful name is also dependent on its effective HR policies and
HRM. In the case study there is discussion of unique HR practices and policies of the Netflix
such as the Hire and Fire policy by which company immediately fire their low performance
employees. In the beginning of the report has discussed about the background of the company,
its global subscribes, average revenue per streaming customers. Further in the case study
Recruitment and termination practices of the Netflix are brief outlined. The organisation also
plans to expand for which sustainable HRM system is developed for effective performance and
ethical working. In the end of the report some recommendations are suggested that will help
Netflix to enhance its HRM policies.
Main Body
Why do you think Netflix was successful in its human resource practices, especially regarding
their “hire and fire” policy? Discuss first about the policy in the United States, and then
how you think it will work globally?
Netflix is the world's leading online subscription service provider and is developing itself
beyond the bars in terms of revenue from last two years. The company is highly successful in
managing its human resource through its effective and unique HR practices (Rataul, Tisch and
Zámborský, 2018). The CEO Reed Hastings has been successful in implementing certain Human
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resource practices that has made the Netflix a successful organisation and also the ranked as the
no 11 on the LinkedIn top attractors list. It is analysed that organisation does not hire the freshers
at there focus is to hire the people that are suitable for the culture of the company and also are
experienced. The culture of the Netflix is analysed as the cut throat mentality as they only retain
high performance achievers.
In United states the Netflix has most famous HR practice” Hire and Fire” which basically
means that company only hire and retain the employees that impose high performance and fire
immediately those who are low performers and also compensate for their firing. The employees
in United states are not hired on their education or degree rather tested for their intellectual and
technical skills. This practice of Netflix was ranked 11 in the LinkedIn’s top attractors list in
2019. It is analysed that Netflix this policy was highly successful in united states as their people
are highly normal and positive about this policy and HRM practices. In unites states the
employees of Netflix take this practice of HRM as an inspiration to work harder to perform their
best and also if they are fired they have thought that are coming out as best from the best of best
people. In the organisational culture of the Netflix in US this policy is the effective and
successful in maintain the talented pool of employees for the higher performance.
When Netflix is planning to expand it business in new international market like Asia or
any other country the foremost question is that whether this HR practice of Hire and Fire is
suitable and successful (Zhang, Yang and Huo, 2021). Before the expansion it is very necessary
for the Netflix to analyse the effectiveness and drawbacks of this hire and fire policy in order to
have successful HRM in new market. It is critically evaluated that company must analyse the
culture of the new country to improvise this strategy as the every country employees are not
comfortable with such practice as the employees must feel demotivated. In order to adopt
successful expansion the company is suggested to use the High Performance Work system in
order to maintain the high performance of the employees without firing them. This system
consist of bundle of HRM practices that helps in management of human resources and also help
the Netflix to gain competitive advantage. In nations like Asia, Japan this policy is not
acceptable easily as the people work for job security. It is very essential for the company's like
Netflix to improve performance of their employees but for that High Performance work system is
the best option. Using this system the company must design an effective work schedule that
focus meeting the objectives and goals of the Netflix.
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Critically analyse the recruitment practices of Netflix
Recruitment is the foremost duty of an HR manager of an organisation that helps in
filling up the vacancy of the candidates of the specific position in an organisation. The
recruitment is basically hunting and selecting the employee for the organisation. In Netflix there
is unique standards for the recruitment of employees and is also different from other recruitment
practices of the organisations (Bresciani and et. al., 2021). In Netflix the company only hire the
candidates that are experienced and fits the company' culture. The company does not hire any
fresher or college graduate and also during the time of interview the Netflix panel of interviewer
does not look for their degree or education. This means in Netflix there is no qualification
criteria or standards to review the profile of the candidate. It is analysed that In Netflix there is
panel of 8 members at the time of recruitment and all of them monitor a candidate on the basis of
two criteria i.e. technical skills and intellectual and critical thinking skills. As per the selection
criteria a no of single member of the panel will lead to the rejection of the candidate. The
company judge an candidate by giving on the spot situation in order to check the critical thinking
and problem solving skills. This helps the members of the panel of Netflix to analyse whether the
candidate will fit with the company's culture or not.
According to the case study of the Netflix it is analysed that the recruitment process of
the company is time taking as they effectively analyse the candidates capabilities and skills in
order to take right decision regarding the hiring of employee (He, 2018). The team of recruiters
of the Netflix include HR representative, senior management, members of the core team. In the
recruitment process the members of the panel ask the technical question also but they are not
much hard as the motive is to judge high performance of the employees.
In organisation they also have their own culture deck that consist of the HR policies and
practices that company follow. The document was appreciated by the HR manager of Facebook.
After the leak of this deck in public there was the increase of the applicants on the site of Netflix
by 217%. It is said that company has very effective and efficient recruitment strategy. Hence
company also does not recruit the employees that want to work remotely.
Critically analyse the challenges and opportunities of effectively and efficiently developing
sustainable HRM system with focus on performance and ethical practices
For the effective and efficient management of the human resource Netflix has developed
the sustainable HRM system. The sustainable Human Resource refers to the integration of he
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two concepts that is sustainable development and human resource management in an
organisation. Basically, it is concept that promotes ecological, social and economic aspects of the
organisation with the functions of the Human resource management. It is the strategic approach
by which company take care of both high performance and effective and flexible working
environment (Jaworski, 2021).
In context of Netflix case study, it is critically evaluated that there are some challenges and
opportunities associated with the effective and efficient development of the Sustainable Human
Resource Management system. With the help of the AMO (Ability, motivation and
opportunities) there are three independent work system that will help the company to shape the
employees as per their choice in order to meet the company's organisational culture and the
objectives effectively. Using this theory opportunities and challenges while developing
sustainable HRM system are discussed below:
Challenges
Resistance of employees: when ever there is the change or development of the new Human
resource management system or policy the employees are impacted directly. Therefore, the
resistance of employees in adapting that HRM system is common challenge faced by the Netflix
(Cattermole, 2019). For example: as evaluated in the case study when Netflix expanded in Japan
with its existing HRM system with Hire and Fire policy, transparency of pay, feedback in front
of everyone etc. the Japanese employees were not familiar with such culture therefore, show
resistance through harsh behaviour.
Increase in Employee Turnover: whenever there is the development of the sustainable HRM
system in the Netflix the employees are fired with dignity and honesty due to there less
performance but this brings a challenge for the organisation like Netflix. When the employees
are fired then company tends to increase their turnover rates. It is critically evaluated that this
factor also makes the talent hunting away from the organisation as the people want to job
security. Also with this challenge company has an possibility of conducting unethical practices in
organisation as employees may feel blunt and betrayed with the firing action of the company
(Ahammad, Glaister and Gomes, 2020).
Cultural barriers: in different international market employees expect different organisational
culture in order to work with highly performance. It is critically evaluated from the case study
that Netflix is trying to implement its organisation of US in all the other the international markets
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like Europe, Asian countries, Japan etc. This implementation has caused the challenges for the
Netflix in relation to the culture barriers. For example when the company acknowledged the
cultural barrier challenge among the employees of the Tokyo. As the the people of Japan
experienced a different American and US based culture and felt is harsh. Therefore, due to this
challenge the company may face loss of performance among the employees in that particular
market and also some of the HRM policies of the sustainable system may not comply with the
ethical considerations of that market (Cooke, Schuler and Varma, 2020).
Opportunities
Pool of high performance employees: Through sustainable HRM practice the company will
have the whole organisational culture with high performance. This HRM practice of the Netflix
provides the opportunity to the company to gain more talented and intellectual candidates and
then increase their performance in order to grow their organisation and provide the customers
with best facilities.
Motivate the employees: this HRM system that works on sustainability will help the Netflix to
garb an opportunity to motivate and encourage their employees and also show them their concern
for the employees job satisfaction. It is also analysed that through this company has an
opportunity to conduct training and development session for the employees to increase their
focus power and to integrate their efforts towards the Netflix goals (Fenech, Baguant and
Ivanov, 2019).
CONCLUSION
It is concluded from the above report that human resource management is the crucial for
every organisation to operate smoothly with the support and the performance of their employees.
It is analysed that very organisation posses different HRM policies and practices as per their
business objectives and vision. It is analysed from the above information that in organisation
high performance employees are retained and low performance employees are fired and this
practice of an organisation is termed as the Hire and Fire. So, it is concluded that this HRM
practice is adapted in the organisations of US very happily. It is analysed while expanding an
organisation into new international market it is very important analyse the HRM system and
make some relevant improvisation to expand effectively. It is also analysed that for the
recruitment there is the panel of 8-10 people in an organisation and also no of single member
leads to rejection for an candidate. It is also analysed that employees in the company are hired on
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the basis of their skills, talent and experience rather than on the basis of education and degree.
Afterwards, In the report concept of sustainable HRM system is discussed and opportunities and
challenges are evaluated that company has faced at the time of the development of the effective
and efficient sustainable HRM system
Recommendations
From the above evaluation on the HRM practices and polices of the Netflix on pay, recruitment
and other factors it is analysed that company has scope for the improvement in the HR practices
and policies. Some recommendations for Netflix are discussed below that will help the company
to enhance the HRM practices and policies:
 It is recommended to the Netflix to more focus on training and development of the new
and old employees in order to develop their skills as per the company's culture. With
expectation of the Netflix to have high performance employees in the organisation it is
essential to provide them with timely and proper training and development in order to
maintain and enhance performance.
 The company is also recommended to analyse the culture of international market before
expanding as it is very difficult to enter new market with same mindset of the native
country. Because market research will help in developing new HRM policies an practices
as per the requirement of the employees of that market.
 The Netflix is suggested to change its current HRM practice of providing open feedback
in the organisation among employees. This practice is the demotivating element for the
employees as it may make them feel inferior or insulting in front of others. Therefore,
company is recommended to adopt new HRM practice in which the feedback of the
individual employees should be given and discussed in private.
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References:
Books and Journals
Agnihotri, A. and Bhattacharya, S., 2021. Netflix: The Firing Machine?. SAGE Publications:
SAGE Business Cases Originals.
Ahammad, M.F., Glaister, K.W. and Gomes, E., 2020. Strategic agility and human resource
management. Human Resource Management Review. 30(1). p.100700.
Bresciani, S and et. al., 2021. Human Resource Management and Digitalisation. In Digital
Transformation Management for Agile Organizations: A Compass to Sail the Digital
World. Emerald Publishing Limited.
Cattermole, G., 2019. Developing the employee lifecycle to keep top talent. Strategic HR review.
Cooke, F.L., Schuler, R. and Varma, A., 2020. Human resource management research and
practice in Asia: Past, present and future. Human Resource Management Review. 30(4).
p.100778.
Fenech, R., Baguant, P. and Ivanov, D., 2019. The changing role of human resource management
in an era of digital transformation. Journal of Management Information and Decision
Sciences. 22(2). pp.1-10.
He, E., 2018. Can artificial intelligence make work more human?. Strategic HR Review.
Jaworski, B.J., 2021. Netflix: Reinvention across multiple time periods. AMS Review, pp.1-14.
Rataul, P., Tisch, D.G. and Zámborský, P., 2018. Netflix: Dynamic capabilities for global
success. SAGE Publications: SAGE Business Cases Originals.
Zhang, H., Yang, M. and Huo, B., 2021. The impact of empowerment-focused human resource
management on relationship learning and innovation. Industrial Management & Data
Systems.
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