Case Study: Netflix's HRM 'Hire and Fire' Policy, Challenges

This case study delves into Netflix's Human Resource Management (HRM) practices, focusing on its controversial 'hire and fire' policy and its impact on the organization's culture and performance. It analyzes the recruitment practices influenced by this policy, emphasizing Netflix's preference for experienced professionals who can quickly contribute to the company's success and brand image. The study identifies challenges such as attracting the right candidates, engaging employees, and building a strong employer brand, while also exploring opportunities for improvement through theories like the Human Capital Theory. Ultimately, the case study provides recommendations for Netflix to enhance its HRM practices for greater productivity and efficiency. Desklib provides similar solved assignments and resources for students.

Case study

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Successful HRM practice of Netflix “hire and fire” policy.........................................................3
Analysation of the recruitment practices of Netflix.....................................................................5
Challenges and opportunities Netflix...........................................................................................6
Recommendations........................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Human Resource Management is the strategic approach to an effective and efficient
management of the people of the organization for gaining competitive advantage. The Human
Resource management is designed in a way that it can maximize the employee performance in
service of an employer's strategic objectives (Lengnick-Hall, Neely and Stone, 2018). This case
study is on Netflix which is one of the worlds leading internet subscription services provider
company. This organization offers TV series, documentaries and featured films in various
different languages. In this project the policy of Netflix in expanding its business over the
international business has been discussed. In this analysation the organizational method of hiring
and firing of this organization will be discussed. This project will also help in the analysation of
the effectiveness of the organization. The effects which this policy will have on the culture of the
organization will be discussed. In this project the analysation of the recruitment practices of
Netflix is going to be done. This project will also help in analysing the challenges and
opportunities which provides effectiveness and efficiency to the business of the organization. It
focuses on the ethical practices and performance of the HRM of Netflix. This project will also
provide recommendation to this organization for effectively improving its practices and policies.
MAIN BODY
Successful HRM practice of Netflix “hire and fire” policy
HRM policies and practices is defined as the attitude with which the organization expects
and values its individuals on how they are treated while serving as the point of reference for the
development of the organization. In the HRM practices the decision made for the people in the
organization for equal treatment among the individuals. Netflix as an organization has followed
one very effective strategy which has led it to success, This policy of the organization was “hire
and fire”. As the name suggested in this policy the organization when hired individuals and fired
the same amount of individuals simultaneously (GOEL and et.al., 2021).
This organization focused on the only hiring those candidates which are experienced and
offered high self-sufficiency from the employees. Netflix tried not to hire the fresh candidates as
they desired qualified candidates which can fit into its structure very easily. It can be said that
Netflix wanted only experienced candidates so that they can hire only those employees which

can easily fit into the culture of the organization. For this policy Netflix the hiring was centred
around only the best individuals which provide the premium performance for the organization.
Hiring of the best individuals ensure quality from the employees of the organization it is
considered to be very helpful for the high-performance at the workplace. Netflix is therefore able
to achieve success and also develop strategies which can be very helpful for the organization for
increasing is productivity and also development of its brand image. The selective hiring of the
organization is said to be one of the most important aspect of the organization which can help
them in maintaining the strong and selective hiring process. Only hiring the employees cannot be
any good for the organization as it will create dis-balances in the structure of the business. Thus,
along with the hiring this organization also fire the less productive individuals for ensuring that
the quality of the organization can be maintained. It is also another way in which Netflix makes
room for the new hiring which as per the Netflix plan is to bring success to their operations
(Jatoba and et.al., 2019). Netflix is so active in its firing that it has made some targets which it
needs to meet every month in the firing of individuals. In general the employees needs to be
worried about the lack of job security however, it was noticed that it was quite a common
phenomenon in the organization which can help the organization achieve its results.
In USA this organization has been very successful for the last decade. This has been
because of many reasons which has allowed Netflix to grow as strong as it has over the years.
Many policies were utilized by this company for gaining success. The first policy of this
organization was regarding the hiring process in which it identified that hiring the best
individuals can bring success to the organization (Duggan and et.al., 2020). This happened as
one of the films which were streamed on this platform won a Grammy award. This award was
basically an achievement of the company but a way of promotions for Netflix services. Thus, this
organization decided to hire those groups and individuals which can guarantee such success to
the organization. This changed the thought process in the organization completely, and they
started to believe that for hiring more of the best individual we need top create space in the
organization and also fire of some existing employees which are not as productive for the
organization. The result of his strategy was Netflix HR practices developed into this world-
famous HR practice of hire and fire policy.

Analysation of the recruitment practices of Netflix
As discussed above the hire and fire policy of Netflix has been the reason success for the
organization. This policy has also been a great influence to the company demanding the high
self-sufficiency from the employees. The recruitment practices of the organization were also
effected due to this policy. As a part of the recruitment practice the Netflix always had to keep
the bigger picture in the mind (Youssif Abo Keir, 2019). Its main objective was to hire those
individuals which can be productive and also provide the organization success in the term of
awards which will help Netflix to grow its brand image. This has been the main Netflix objective
since the beginning of its services in USA.
Thus, Netflix looked for the best and experienced professionals which had the potential
of improving the brand image of Netflix in the international market. The company avoided hiring
new and fresh graduates as the company did not want to spend on training and development of
those people. It hired only the experienced individual which can ensure the organization with
productivity and also efficiency in their operations. For making room for the hirings in the
organization these individuals ensured that can ensure this organization success in providing best
services to the customers with their subscription.
Netflix hired managers are relegated to simply passing the requisition of the recruiters for
filling process (Engelsman and et.al., 2021). With the help of this the organization is able to gain
complete control over the hiring process of the organization. Due to having such a cruel policy in
the organization honesty is this business is considered to be sacred as its has ingrained the in the
organization's culture from the beginning. This is why the Netflix has honestly as the part of their
recruitment model. The employees are completely aware of the fact that they are going to being
fired eventually by this organization. This creates a sense of competition amongst the employees
which results in high productivity.
For increasing the performance even further the managers of this company offer the
hirings regular performance critiques which can help the mangers to learn different ways to
communicate with their candidates and also treat the consultative process with both parties
which are invested in each other's success. This organization has no force which stops the
individuals from being fired as a part of the recruitment process (Zhuplev, 2018). Netflix team
which recruits the best talents with top quality have total access to the information of the
resources which can help the hiring process to go where is has rarely seen. The hiring managers

and recruiters do care about each other and their candidates and it's their partnership which leads
to the best hiring and rapid scalability.
This company also utilizes a digital platform known as the ledger which is useful for
processing the information on everyone. In this online platform the hiring managers very quickly
upload the requisitions for the recruits which is then broadcast across the many other platforms.
This platform provides transparency to the organization which also enables it to hire better and
create a very consultative environment (Aljumah, Nuseir and Alam, 2021). It records all the
transactions which are history and also the future ones. The hiring managers and recruiters can
also utilize this data for providing recommendations through rating and metrics which can help
in forecasting the talent which this organization needs.
This organization is considers itself to as the culture deck of the highlighted details of the
human resources policies and culture. This HRM polices of recruitment of Netflix has been
described in five words, “Act in Netflix's best interest”, which help the organization to encourage
the employees in relying on the logic and common sense which can be formal towards the
polices (Torrington and et.al., 2020). Netflix for ensuring that the individuals choose this
company as their first priority has made sure that they will get the best payment and holidays
which they desire. All the company is concerned with is the performance of the organization.
Challenges and opportunities Netflix
Some challenges which the HRM practices of Netflix has to face in this organization are,
Attracting the right candidates :
In order to be efficient in the operation of the organization it is essential for Netflix to
ensure that they are hiring the right candidates (Frosch, Warg and Lange, 2021). It often a
challenge for this organization as finding the right candidate require detailed screening.
Engaging employees :
Due to the culture of this organization it fails to develop strong relations with the
employees as a result of which the organization fails to engage or qualify as good candidates
which is often contacted in the regular basis by the recruiters.
Building a strong employer brand :
A strong employer brand is very important for an organization as it helps in the attracting
and engaging better candidates. Netflix due to its fire and hire policy fails to develop such a
brand.

Ensuring good employee experience :
Due to constant hiring and firing in the organization creating a strong employee
experience is said to be very effective and influential in evaluating and offering jobs. The policy
of this organization is said to be very determining in changing experience of the employees.
One the other hand the opportunities for HRM of Netflix is regarding overcoming of
these issues which will help them to improve on the issues it has to face (Ibrahim and Hassan,
2019). Thus, with the help of this organization is going to be able to increase its productivity
even more. In order to overcome these challenges so that Netflix can make them its opportunities
the following theories can be applied,
Human Capital Theory :
The human capital theory is relative to the finance and economics which the company
seeks towards its incentive for seeking the productive human capital and also add to the existing
employees of the organization. In this theory the human capital has been explained as the
intangible value of the organization employees which is related to their educational attainment,
knowledge, experience and also skills of the employees. This theory of human capital is
relatively new in the finance and economics. It can be said that the organization can have an
inventive growth to their production by adding new and better human capital to their workforce.
The application of this theory in the management of Netflix can be done by influencing
the importance of the human capital in the organizational culture. It is essential for this
organization to understand that the employee are very essential for the productivity and
efficiency. With the help of strong human capital an organization can not just influence the
productive measures in the organization but also implement the strategies into the systematic tool
of hiring and firing. The HRM practice of this company which is hire and fire needs to be altered
as the result of this practice the organization tend to lose out on essential employees which is are
rehired by the competitors can be issue to the organizational policy.
Contingency theory :
It is an organizational theory which claims that there are no better ways for an
organization to ensure that there are no better ways for leading an organization to making better
decisions (Fahmy, 2018). As per the success which the hire and fire policy of Netflix has
provided the organization the suggestions of the contingency theory would be to make keep
using this practice as it is very effective in the decision-making for the organization and also

ensuring success. According to this theory better decision-making can influence the organization
a lot for making sure that accepting the difference it can help the organization to improve the
efficiency of the organization.
Recommendations
Netflix has been successful over the last decade with the help of its hire and fire policy in
its HRM practices. These strategies have helped Netflix to provide the organization effectiveness
in the organization and also implement strong culture of competition. The employees in Netflix
are very influenced by the strategies of the organization due to which the competition between
them has increased a lot. This increased competition in the organization has resulted in the
growth of the production of this organization. However, in order to improve the sustainability of
the development of this organization it is essential for this company to change some of its
strategies for effective performance. It is important for the organization to differentiate between
the employees which have the been very productive in the organization previously. Considering
this data will help the organization to preserve those employees in the organization which are
very crucial for the productivity of the organization (The most common recruiting challenges
and how to over come them, 2021). This will also be an effective strategy to ensure that the
organization will not lose its employees to its competitors. For improving the sustainability of
this organization it needs to train its hiring team. The hiring teams needs the most experience for
ensuring that they can level up the skills of hiring of this organization. It will improve the hiring
process and also help the organization to make sure that they do not miss out on any productive
employee.
CONCLUSION
With the help of this project it can be concluded that Netflix's hire and fire policy is the
best HRM practice which it has utilized for several years now to gain competitive and
sustainable development. In this project the discussion on the successful human resource practice
of hire and fire policy has been discussed. This project also highlights the first HRM practice
used by this organization in USA and how is that policy considered effective in its growth in the
international market. This project also analyses the recruitment practices of the organization in
Netflix. With the help of this project the analysation on the challenges and opportunities of
effective and efficient development of HRM system has been realized. This project also utilized

theories like Human capital and contingency to utilize them for ensuring the organization
sustainability in the towards its performance and ethical practices.

REFERENCES
Books and Journals
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analytics and big data system quality and the success of new product
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research agenda for employment relations and HRM. Human Resource Management
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Engelsman, W., and et.al., 2021. Traceability from the Business Value Model to the Enterprise
Architecture: A Case Study. In Enterprise, Business-Process and Information Systems
Modeling (pp. 212-227). Springer, Cham.
Fahmy, K.I., 2018. Artificial intelligence and the future of work. The Undergraduate Research
Journal. 6. pp.11-22.
Frosch, M., Warg, M. and Lange, M., 2021, July. HR-Management: Impacts from Service (Eco)
Systems. In International Conference on Applied Human Factors and Ergonomics (pp.
280-291). Springer, Cham.
GOEL, R., and et.al., 2021. Challenges to HR 4.0 in the Global Business Scenario. Financial
Intelligence in Human Resources Management: New Directions and Applications for
Industry 4.0.
Ibrahim, W.M.R.W. and Hassan, R., 2019. Recruitment Trends In The Era Of Industry 4.0
Using Artificial Intelligence: Pro And Cons. Asian Journal of Research in Business and
Management. 1(1). pp.16-21.
Jatoba, M., and et.al., 2019. Artificial intelligence in the recrutment & selection: innovation and
impacts for the human resources management. In 43rd International Scientific
Conference on Economics and Social Development (pp. 96-104).
Lengnick-Hall, M.L., Neely, A.R. and Stone, C.B., 2018. Human resource management in the
digital age: Big data, HR analytics and artificial intelligence. In Management and
technological challenges in the digital age (pp. 1-30). CRC Press.
Torrington, D., and et.al., 2020. Human Resource Management. Pearson UK.
Youssif Abo Keir, M., 2019. Prospective on Human Resources Management in
Startups. Information Sciences Letters. 8(3). p.1.
Zhuplev, A.V. ed., 2018. Disruptive technologies for business development and strategic
advantage. IGI Global.
Online
The most common recruiting challenges and how to over come them, 2021.[Online]. Available
through: <https://resources.workable.com/stories-and-insights/common-recruiting-
challenges>