Netflix HRM Strategies: Hire/Fire Policy, Challenges & Opportunities

This report analyzes the human resource management (HRM) practices of Netflix, focusing on its unique hire and fire policy and its impact on the company's workforce commitment and competitive advantage. The study examines Netflix's recruitment practices, including its emphasis on experienced candidates, cultural fit, referrals, and leveraging social media platforms. It also explores the challenges and opportunities of developing a sustainable HRM system within Netflix, considering factors such as competition and securing exclusive rights. The report applies the human capital theory and the AMO theory to understand Netflix's HRM processes and provides recommendations for improvement, such as creating open communication channels and managing employee performance effectively. The analysis concludes that while Netflix's HRM practices have contributed to its success, ongoing adaptation and refinement are necessary to maintain a competitive edge and ensure long-term sustainability.

Human resources

Executive summary
Human resource management plays crucial role within recent dynamic working
scenarios, where implementation of advanced competitive strategies further enhances company
workforce commitment and brand goodwill. Research on Netflix, which is one of the biggest
rising company has presented details of advanced HRM strategies, is taking shape positively by
the recruitment practices with sustainable method.
Further report concluded that Netflix gained flexibility, new talents and time efficient
with its hire and fire policy. Study examined The recruitment practices of Netflix such as Right
interview process. It developed sustainable HRM system with the practices of leveraging social
media platforms to attract new job applicants. In addition to that challenges and opportunities of
sustainable HRM system explained such as competition. In the end, study described human
capital theory and the AMO theory in the HRM process of Netflix with the recommendations
such as,create open communication channels and manage employee performance.

Table of Content
INTRODUCTION...........................................................................................................................5
MAIN BODY...................................................................................................................................5
Analysis.......................................................................................................................................5
The recruitment practices of Netflix...........................................................................................7
Challenges and opportunities of developing sustainable HRM system......................................8
Recommendations.....................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
The HR practices are set of different processes and actions that needs to be performed by
human resource management department in a company. Human resource policies are aligned
with business strategies and HR must focus on both the needs of the workers in the company as
well as needs of the organization. HR activities also help companies in achieving the
competitive advantage and their objectives. HR practices are correlated with the strategy of
organization for the optimum outputs, within longer run to attain significant rise diversely.
Netflix is a subscription service company that offers TV series, documentaries and films
with different genres and languages. The company consists of more than 150 employees and
Netflix is well known for unique HR practices. The company is giving high performances from
past few years with their cut throat mentality, and company believes in working with high
achievers only.
This report will include practices of HRM in Netflix and their different policies that has
been used by them all over the world such as hiring and firing policies. They are continuing to
work on this policy as they are expanding into international markets. It will also include mew
recruitment practices of Netflix such as job advertisements, building talent pool and other
practices as well. The report also explain about the challenges and opportunities of HRM system
with majorly focusing on the performance and ethical practices.
MAIN BODY
Analysis
1. Hire and Fire Policy of Netflix
Netflix has a corporate work culture within the working space. Netflix has unique human
resource strategies. They first implemented the practice of hire and fire policy in California,
USA. It was unsure if the same policy will be effective in other countries. Netflix has aim to
further invest on new advanced HR platforms, for strengthening talented workrforce
competitively (McKenzie, 2017). Company only hires people who are more focused and provide
higher outputs.
The hire and fire strategy is very effective for Netflix. If company finds any under
performance in the team, they think the best way to increase productivity is by firing that
employee. The company shows several advantage in USA that are as follows:
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 Flexibility: This Hire and fire approach provides huge flexibility for the company. The
organization is able to react quickly to the changes in the market. It is advantageous for
Netflix to sustain in the market for longer period as it follows the principle of supply and
demand with the employment process (Bhatia and Arora, 2017). Also it is very cost
effective for Netflix. New candidates provide flexibility and those who are not working
effectively will be underperforming, and Netflix thinks it is essential for company to fire
them. New talents: This policy helps company in finding new talents. Netflix is always looking
for better and qualifies candidates with better skills. This increases the talent pool in the
company. A strong committed and talented workforcewith new ideas also bring freshness
and valuable experience into company. The staff with poor performances or those who
are not giving results up to the mark will be fired, so that company will always have
efficient staff and the performance will also be increased. Time efficient: It can be said that the it take lesser time in hiring new candidates than to
train the current workers in the company. The company believes in hiring smart and
firing fast logic, according to which firing fast benefits the company as they will find a
much better fit and success for company with somebody who is efficient. The worker
that are not able to serve as company wants will damage their confidence slow down
their progress in their career, when they are in environment that is not suitable for them.
Effectiveness of Hire and Fire Policy in other countries
The company has first implemented this policy in USA. Now company is planning to
implemen same strategy in other countries as well but they are not sure if it will be as successful
in other countries as it was in USA (Schultz, McCaffrey and Huber-Stearns, 2019). However
they implemented same strategy in other countries of Asia. The talent officer is responsible for
applying HR policies to international offices. Product manager at Netflix access the employees
in his team within 90 seconds and in result the function of the company was improved.
Netflix focused on hiring those candidates only who are more focused in fit in the culture
and those who have knowledge about the required technicalities. Netflix expects from their
employees to behave responsibly and follow the norms. Most of the people in the company has
worked according to the terms and conditions provided by Netflix and those who were not
following the rules were fired soon.
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The same strategy was effective in other countries also as the employees were more
productive and performing up to the mark (Füllemann and et.al., 2020). Netflix also gives very
generous package to the employees and if their skills are not applied properly in the company
Netflix fires them. This helps the company to maintain their performance in other countries as
well.
The recruitment practices of Netflix
Netflix's Human resource policies and culture ensures that structure of HR framework in
company is innovative, dynamic to meet new pace goals fundamentally. Some of the most
prominent policies are as follows:
 Hiring the right person- Netflix is hiring only experienced candidates in the recruitment
practice. Netflix is focusing upon recruiting the experienced candidates rather than hiring
fresh and newly graduated from college students for the company (Hameed and et.al.,
2020). Company is coming up with evaluation criteria based on staffing needs. Netflix is
making sure that candidates must be technically capable, possessing the requisite
technical knowledge. Netflix is recruiting and selecting more experienced as they are
high self-sufficiency employee for the company and helping it to achieve business
objectives. This streaming media company did not focus on the educational
qualifications of the candidness, but requiring experiences from the candidates.
Recruiting and selective for experienced candidates helping the Netflix as they are high
'self-sufficient' and fits into well-establish company with their own experience of work in
which company need not put efforts to train them for work.
 Emphasis on Culture- Netflix is making sure that candidate fits in the culture of the
company, by developing a strong employer branding strategy Netflix is exposing job
seekers about the requirements of company before they submit their applications for job
(11 Must Have Recruitment Practices for HR Managers & Startup Founders. 2021).
Company is leveraging culture as a tool which is attracting the right candidates of
Netflix, by emphasizing the information of company which it stands for. This streaming
media company makes sure that workforce is also compatible with the culture of the
company, with prequisite technical knowledge.
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 Referrals - Netflix is Maintaining a strong employee referral program, best candidates
are likely to know about jobs which are company offering to them. For attracting high
performers, Company is using referrals through existing employees to bring the high
performers into a fold of organization(Harney and Alkhalaf, 2021). Netflix optimizing
recruitment practices which are enhancing and marketing the employee referral
programs, this practice involving the existing employees in process that feeds smoothly
into normal recruiting stream. Current employees of the company referring contacts for
vacant job position in the Netflix, this recruitment process is calling more job applicants
effectively and efficiently (Manzoor and et.al., 2019).
 Leveraging social media platforms- HR manager of the Netflix attracting and reaching
a larger pool of talent through social media. Netflix is focusing upon building social
media platforms by ensuring it activities on the social media which attracts more
candidates towards the company for the job offerings. HR manager is performing
activities to attract more compatible employees for the company, through social media
platforms Netflix is gaining monthly job applications. Netflix is building brand and it is
keeping track on the candidate's information with the leverage social media platforms
and informing them about company and its job requirements. Netflix continuously has
been making effort to maintain and build brand by performing activities such as,
brainstorming sessions and group working activities.
Challenges and opportunities of developing sustainable HRM system
Developing sustainable HRM system- Adaptation of HRM practices in the organization
enables to achieve ecological, financial and social goals in long-run (Manzoor and et.al., 2019).
Sustainable HRM in Netflix creates new values, skills, motivation, and trust to achieve
organizational goal also, it ensures long-term health and sustainability of both internal and
external policies that reflect equity and stakeholders in the business.
Netflix is effectively and efficiently developing sustainable HRM system by focusing
on the performance and ethical practices such as Netflix is Reviewing the workplace practices
through social media and it website. Company is making sustainability a vital part of the
recruitment and on-boarding, it also provides training and incentivize to the employees of the
organization. To making sustainable HRM in the organization, Netflix is providing volunteering
opportunities (Lei, Khamkhoutlavong and Le, 2021).
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These sustainable HRM in the organization creates both challenges and opportunities
with focusing on the performance and ethical practices such as it often requires high initial cost
and increase capital outlays:
Challenges of Netflix
 Competition: Netflix is providing streaming services with a competitive advantage over
their biggest rivals. The HRM of Netflix is also evolving and embracing new
technologies to provide improved streaming services to their subscribers. Netflix is
facing challenges in framing and effective developing sustainable HRM system due to
high competition, company is unable to focus on the individual's performance and ethical
practices such as employee honesty.
 Securing Rights: Increased competition creates further challenges, as other competitive
firms are securing exclusive rights to the services that Netflix is providing. Netflix is the
largest market and had to face some loss in UK (Diaz‐Carrion, López‐Fernández and
Romero‐Fernandez, 2018). Netflix is efficiently developing sustainable HRM system
with focus on performance and ethical practices but company facing difficulties in
managing and securing exclusive rights for employees which impacted the performance
of teams and individuals.
Opportunities
 Sustainable HRM practice helps to achieve higher employee job satisfaction and
commitment effectively within longer run, for strengthened retaining surge.
 It creates culture in which Netflix vision is to provide well-being and heathy employees.
 It enables effective communication, taking responsibilities and accountabilities to be
shaped up productively within longer working growth goals.
Netflix's management of human resource meets the optimal requirements, and needs of
company within community of recent time to meet the future needs. In the case of HRM
practices of Netflix which is using sustainable method with focus on the performance and
ethical practices, most relevant theories which are applicable can be further discussed as follows:
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 Human capital theory- Human capital theory is the major aspect in determining the
economic success in the companies. This theory is a combination of personalities,
attributes, knowledge, skills and creativity (Beltrán-Martín and Bou-Llusar, 2018). This
theory helps the company to increase productivity competitively. Human capital theory
mentions that productivity capacity of human capital can increase through grater
education and skill trainings. Netflix hires experienced employees for the company by
focusing upon their working skills rather than education, so company believes in long-
tern oriented conceptual approaches. It is because company can provide them useful
knowledge and skills, which further adds value to the employee job experience as well as
enhances goodwill of Netflix. It gives opportunities of rapid growth as experienced
employees can give outstanding performance by putting minimal effort to them, also
human capital theory in Netflix is helping it to make contribution of raising the economic
value in society. However, it has been critically analysed this theory often requires high
initial cost and uneven competition to the employees. The AMO theory(ability, motivation and opportunity)- The AMO explain that there
are major three components of independent work system that shapes characteristics of
employee. Dynamic capability's theory, contributes to the success of Netflix by serving
organizational interest which attends the employee ability, motivation and opportunities.
It gives access to the leaders with a management tool which enhance performances of
employees (Li and et.al., 2021). These capability represents the firm's ability to integrate,
build and reconfigure internal and external competencies to address the changing
environments.
Ability- This theory helps to increase the ability of the employees diversely, by giving
them opportunity to showcase new abilities.
Motivation- It motivates the employees with personal and professional development.
Opportunities- AMP theory provides opportunities to make contribution for the
employees of the organisation, which shapes positive motivation
However, on critical note Netflix realized that it increases capital outlays for the
organization and creates uneven competition to the employees. This tool impacts the
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performances of employees if not utilized appropriately for each employee, as company invest
money, time and efforts in practicing these components (Than and et.al, 2021).
Recommendations
Netflix can further also improvise its HR policies and practices by identifying right need
and developing its policies and practices accordingly with changing determinants in recent
arena.
 Create Open Communication Channels- Netflix needs to Create Open Advanced
Communication Channels, as it is long-term oriented technique which develops the
organization with socially viable (Füllemann and et.al., 2020). By conducting monthly or
quarterly staff meetings and annual reviews, Netflix can create open communication
channels which will lead the organization towards success. Acknowledging employee's
views are important for longer productive goodwill.
 Manage Employee performance- Netflix need to frame its HR policies and practices to
set effective management in the organization. Company needs to balance by proper
gauge worker efficiency. Netflix needs to provide supportive structure with proper
monitor and evaluating practises. Netflix needs to seek feedbacks to manage employee
performance in the organization. Also Netflix has scope to further invest on trainings,
and brainstorming sessions which will provides higher retain.
 Transparent Work Culture- Transparent Work Culture encourages innovation in the
organization and help employees to speak honesty. Employees need to feel valued and
supported for taking initiative of bringing new ideas and opinion, it keeps them
motivated (Schultz, McCaffrey and Huber-Stearns, 2019). The technique of creating
transparent work culture for employees, provides them advantage of developing
professional and personal relationships. Netflix needs to develop transparent work
culture by keeping fair recruitment and selection for employees. Company needs to
practise transparency in the work culture by asking questions and feedbacks of making
improvements in the organization.
CONCLUSION
From the present report it has been concluded that recruitment practices of Netflix such
as Hiring the right person, Emphasis on Culture and Right interview process helped Netflix to
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gain best working platforms. This study explained hire and fire policy of Netflix which enhance
the Flexibility, New talents and Time efficient factors of the organization. Effectiveness of Hire
and Fire Policy of Netflix has been found to be diversely competent for attaining best long term
results.
Furthermore, Report has been summarized sustainable HRM system which creates
opportunities such as sustainable HRM practices and policies help to achieve higher employee
job satisfaction and commitment, It also creates culture which concern for the well-being and
heath of employees. Other the other hand study explained, that sustainable HRM system create
challenges such as, high initial cost and increase capital outlays for the organization. Research
also concluded human capital theory and AMO theory, depicting advanced HR methods used by
Netflix.
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REFERENCES
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perspective. International Journal of Innovative Research and Development. 6(1).
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Diaz‐Carrion, R., López‐Fernández, M. and Romero‐Fernandez, P. M., 2018. Developing a
sustainable HRM system from a contextual perspective. Corporate Social
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Füllemann, Y. and et.al., 2020. Hire fast, fire slow: the employment benefits of energy
transitions. Economic Systems Research. 32(2). pp.202-220.
Hameed, Z. and et.al., 2020. Do green HRM practices influence employees' environmental
performance?. International Journal of Manpower.
Harney, B. and Alkhalaf, H., 2021. A quarter‐century review of HRM in small and medium‐
sized enterprises: Capturing what we know, exploring where we need to go. Human
Resource Management. 60(1). pp.5-29.
Lei, H., Khamkhoutlavong, M. and Le, P. B., 2021. Fostering exploitative and exploratory
innovation through HRM practices and knowledge management capability: the
moderating effect of knowledge-centered culture. Journal of Knowledge Management.
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pandemic: The role of transparent internal communication. Public Relations
Review. 47(1). p.101984.
Manzoor, F. and et.al., 2019. An examination of sustainable HRM practices on job performance:
An application of training as a moderator. Sustainability. 11(8). p.2263.
McKenzie, D., 2017. How effective are active labor market policies in developing countries? a
critical review of recent evidence. The World Bank Research Observer. 32(2). pp.127-
154.
Schultz, C. A., McCaffrey, S. M. and Huber-Stearns, H. R., 2019. Policy barriers and
opportunities for prescribed fire application in the western United States. International
journal of wildland fire. 28(11). pp.874-884.
Than, S. T., and et.al, 2021. The impacts of high-commitment HRM practices on exploitative
and exploratory innovation: the mediating role of knowledge sharing. VINE Journal of
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Online
11 Must Have Recruitment Practices for HR Managers & Startup Founders. 2021. [Online].
Available through: <https://recruiterbox.com/blog/11-must-have-recruitment-practices-for-hr-
managers-startup-founders>.
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