Performance Management at Netflix: Analysis and Recommendations

This report provides a critical analysis of Netflix's performance management approaches, highlighting the company's emphasis on extreme openness, constant feedback, 360-degree reviews, and rewards. It examines the benefits and drawbacks of these practices, comparing them with Amazon Prime's performance management strategies. The report also offers recommendations for improvement, focusing on the need for job security to enhance employee satisfaction and productivity. Netflix's HR practices, including its unique 'Keeper Test,' are scrutinized to understand how the company maintains a high level of performance among its workforce. The analysis concludes that while Netflix has effective strategies, implementing job security measures could further optimize employee performance and retention. Desklib offers this and other solved assignments for students.

How Netflix does
Performance
Management

Table of Contents
INTRODUCTION.......................................................................................................................................3
Main Body...................................................................................................................................................3
Critical analysis of performance management approaches of Netflix......................................................3
Comparison of performance management approaches of Netflix and Amazon Prime.............................7
Recommendations...................................................................................................................................8
CONCLUSION.........................................................................................................................................10
REFRENCES............................................................................................................................................11

INTRODUCTION
Performance management is a practice under which roles, responsibilities, priorities are
communicated to individuals for improving their performance level in significant manner. Under
this, human resource managers determine standards and then evaluate performance of work force
by comparing their actual performance with set standards. Main aim of performance
management is to improve the skills and capabilities of employees so that they perform their job
in an appropriate way (Sharma and Shah, 2016). The present report is prepared by considering
Netflix which is a renowned OTT platform that provide variety of content to viewers. It is
headquarter in California and was founded in the year of 1997 by Reed hastings and Marc
Randolph. It has ensured the presence worldwide in different countries and has 208 million
subscribers in 2021. Netflix is based on subscription model where users need to take monthly or
yearly subscription in order to get the access of content. The present report includes performance
management approaches of company along with benefits and drawbacks of their performance
management practices. Further, performance management approach of company has also been
compared with other companies in the following report.
Main Body
Critical analysis of performance management approaches of Netflix
Human resource management is related with performing such tasks by which company
can maintain positive relationships with human resources. It is a practice of managing and
retaining talented people within organization by providing them a better work environment. HR
is a wide function wherein several activities from hiring to motivating and retaining work force
are included. It is the duty of HR manager to recruit and select best possible candidates so that
business operations cab be performed in well define manner. Motivation is also required for
stimulating work force and developing willingness among employees regarding organizational
tasks (Fleming and Scott, 2020). For this purpose, monetary and non monetary ways are used by
companies in order to maintain predefined level of performance of work force. Additionally,
training and development programs are arranged by HR managers with an aim to bring best out
of employees by increasing their productivity & efficiency.

Performance management is a crucial practice of HR management wherein managers
keep a track over the performance of work force. In performance, HR managers not only
evaluate the current performance of staff members but also provide them appropriate rewards
and other benefits for improving productivity in an efficient manner. Main aim of performance
management is to identify the loop holes and arrange appropriate training & learning sessions for
improving skills, potential and competencies of employees for getting positive outcomes in
future period of time. Netflix is a well known company which has been adopted efficient HR
management practices for building good relationships with work force (Jaiswal and Dhar, 2016)
. Apart from this, they also execute performance management practices in order to enhance the
skills of employees so that they can perform assigned tasks in best possible way. Netflix is
known for its prime human resources practices which are helpful in retaining and managing
higher performance level of employees. For this purpose some approaches of performance
management used by Netflix are mentioned as under:
Extreme Openness and Transparency: In Netflix, HR managers maintain open culture
where each and every person can easily communicate with each other. Main reason of the open
culture is to facilitate effective communication at different level of hierarchy within company
(Ferraris and et. al., 2019). There is enormous transparency in terms of norms, guidelines,
policies, rules and more. Here, all the employees are well aware with the current approaches and
practices of organization. This practice really helps in order to build loyalty and trust among
work force so that they stay with company for longer period of time.
Benefits:
This approach is helpful in maintaining good relationships with work force where
employees get access of all the necessary information. It provides them a sense that they are
important for company.
This practice also enhances loyalty of work force for company which is important for
retaining them for longer run.
Transparency also helps in reduce down the ambiguity and confusion and provide clarity to
staff members so that they can perform assigned task in best possible way.

Drawbacks:
Sometimes openness might harm to the confidentiality of company. In open environment,
each and every individual has the access of information which might surpass to external parties
that will hamper current practices of organization.
Open environment provides freedom to employees due to which; it might possible that they
do not take the commands and orders of higher authorities seriously.
Constant Feedback: Feedbacks play a crucial role in improving performance by
providing honest reviews to employees regarding their performance. In Netflix, they follow
“360” approach in order to analyze performance of work force in detailed manner. Here, Keeper
test is an another way which is used by HR managers of Netflix for keeping a track over
employees performance in an efficient manner (Abdallah, Dahiyat and Matsui, 2019). Feedback
provides information to work force about their performance which further help then in order to
take appropriate steps to get better results in future period of time.
Benefits:
Feedbacks assist employees in order to identify the areas of improvement as per which they
can embark appropriate practices for making further improvement.
Through feedback, staff members get to know about the areas in which they are lacking
which help in making improvements in future period of time.
Feedbacks are helpful in enhancing performance by applying appropriate set of corrective
actions in timely manner.
Drawbacks:
Negative feedbacks sometime, hurt the sentiments of employees and it also hamper the
relationships of managers & subordinates.
Sometimes, employees take the criticism negatively which might impact their future
performance in adverse manner.

360 degree review: Rather adopting traditional performance management approaches,
Netflix uses 360 degree procedure for reviewing the performance of work force in different
intervals. However, reviews are regular but informal where colleagues are free to provide
reviews and advice to each other on what to continue, what need to stop, where improvements
are required and so on (Bogsnes, 2016). It brings great transparency in company wherein
employees are getting face to face reviews which further assist them in order to make
improvement for further betterment. This practice is also helpful in maintaining a collaborative
culture where all the people can work with higher coordination & collaboration for attainment of
team goals in well define manner.
Benefits:
Here, detailed overview is provided by managers of company which is vital in making
improvement in each and every aspect. In addition to this, feedbacks are also provided by
colleagues that help in improving coordination and collaboration at work place.
When employees get feedback from their peers, colleagues then they are more likely to
work on it as they want to perform better from colleagues from strengthening their own
performance within organization.
Drawbacks:
Generally, reviews provided by peers are not genuine because they do not want to improve
the performance of their colleague at work place. Other than this, it might hamper the
relationships at work place in adverse manner.
Rewards: Rewards, incentives always play an imperative role in motivating work force
so that they perform effectively for betterment of organization. In Netflix, they are likely to
provide salary increment to staff members along with the stock options, incentives as per the
performance of employees (Fishman, 2016). They prepare an effective compensation package by
including salary, employee stock options, incentives and other benefits. With the reward system,
they are able to retain work force for longer run by maintaining their higher level of performance
significantly.
Benefits:

Rewards are crucial for encouraging work force so that they work with utmost efficiency
and productivity for betterment of company. In addition to this, rewards offered by Netflix are
helpful in improving performance level of work force.
Apart from this, rewards are also considered as the major source of motivation and affect
performance of employees at work place in positive manner.
Drawbacks:
Feeling of competition is increased due to reward system. Due to this, employees start to
act as rival of each other. Rather work collaboratively, they start to oppose each other which
might further hamper working practices of organization.
Apart from the above mentioned approaches, Netflix also provide decision making power
to work force which not only help in improving performance but also provide a sense of self
importance to employees. With above mentioned paragraphs, it is analyzed that Netflix is able to
maintain positive relationships with work force by maintaining open environment, feedback
mechanism, reward system and more. It will help company in order to attain predefined goals
within stipulated period of time.
Comparison of performance management approaches of Netflix and Amazon Prime
Performance management approaches are related with managing performance of work
force within organization. Each and every company works for betterment of their employees but
the approaches are different (Rehman and Anwar, 2019). Performance management practices
differ on the ground of leadership, environment, thoughts and opinions of employees & leaders
and more. Netflix is a well known OTT platform which adopts effective HR practices. Amazon
prime is one of the major competitors of Netflix. Here, comparison between performance
management practices of Netflix and Amazon prime is mentioned as under:
Amazon Prime Netflix
 In Amazon, they use a mechanism where
performance of employees are reviewed
and ranked against each other. Each
and every aspect of employee
 In Netflix 360 degree and feedback
mechanism is followed where
employees are provided feedback by
managers and their colleagues. This

performance are reviewed and ranked.
Rank is further shared with employees
so that they get to know where they
stand in terms of performance. Main
aim of this practice is to improve
performance level of employees by
developing competitive spirit.
 It is analyzed that the culture of
Amazon is not so open and transparent.
Here, a predefine level of hierarchy is
followed by company in order to take
decisions in systematic and proper way
(Doulani, Mirmohammadi Kaklar and
Rezaei Shrifabadi, 2019).
 Rewards are provided by Amazon to
employees, Here, HR managers are
likely to provide incentives, bonus and
other kinds of perks & allowances for
influencing performance of employees
in positive way.
 In Amazon, HR managers put efforts so
that employees stay with organization
for .longer period of time.
approach aims to improve performance
by identifying areas of improvements.
 It is analyzed that in Netflix, there is open
and transparent culture is followed
where employees have enough freedom
to take decisions. This mechanism
helps in taking quick and prompt
decisions. Open culture and
transparency is helpful in order to
maintain higher level of performance of
work force effectively.
 Authorities of Netflix provide rewards
such as increment in salary, employee
stock options and other kind benefits so
that employees stay with company for
longer duration.
 In Netflix, they opt keeper test so
employees always feel a pressure to get
fire. According to higher authorities of
company, this fear is important for
encouraging employees to put their best
efforts for success of organization
(THERESE, 2016).
Recommendations
After going through with above mentioned information, it is analyzed that Netflix is
adopting a lot of approaches for managing human resources and their performance within
company. Nevertheless, there is requirement to adopt some strategies for bringing further
improvement. For this purpose, certain recommendations are mentioned as under:

 It is analyzed that Netflix is required to provide job security to employees so that they can
put complete focus over assigned work. Job security is really important for satisfying
employees and provides them a sense of security (Umbricht, Fernandez and Ortagus,
2017)
 . It reduces down the fear of getting fire and also allows work force to put significant
efforts for the growth & success of company.
 It is suggested that Netflix is required to create such a work environment where employees
can save time for their personal life as well. Work life balance is crucial for maintain
remarkable performance of employees at work place. If, there is proper balance between
personal and professional life then employees can also concentrate on their professional
work. By this way, company will be able to get better outcomes which will help in future
growth & development.
 There is requirement to opt motivational techniques such as monetary & non monetary
ways which will help in stimulating work force to put significant efforts for betterment of
organization. HR managers of Netflix need to provide suitable rewards, recognition,
acknowledgement along with incentives and other monetary benefits. This approach will
help in motivating individuals at work place so that they put maximum efforts for further
enhancement of business.
The above recommendations are helpful in improving performance of employees. By
applying these recommendations in an efficient manner, company can easily get better outcomes
which will drive growth & development in future period of time.

CONCLUSION
It is assessed with above mentioned points that performance management refers to a
process under which performance of employees is analyzed in an efficient manner in order to
bring enhancement in future period of time. Main aim of performance management is to improve
skills and competences of work force so that they can perform assigned work in well define
manner. There is discussion regarding approaches of performance management such as open
environment, feedback, rewards, reviews and more. It is analyzed that performance management
practices of Netflix are efficient but need to improve by adding job security, work life balance,
motivation and more in order to bring better outcome in future period of time.

REFRENCES
Books and Journals
Abdallah, A.B., Dahiyat, S.E. and Matsui, Y., 2019. Lean management and innovation
performance: Evidence from international manufacturing companies. Management
Research Review.
Bogsnes, B., 2016. Implementing beyond budgeting: Unlocking the performance potential. John
Wiley & Sons.
Doulani, A., Mirmohammadi Kaklar, Z. and Rezaei Shrifabadi, S., 2019. The Effect of HRM
Strategies on the Performance of Urmia University Librarians. Sciences and Techniques
of Information Management, 5(4), pp.42-70.
Ferraris, A., Mazzoleni, A., Devalle, A. and Couturier, J., 2019. Big data analytics capabilities
and knowledge management: impact on firm performance. Management Decision.
Fishman, A.A., 2016. How generational differences will impact America’s aging workforce:
Strategies for dealing with aging Millennials, Generation X, and Baby
Boomers. Strategic HR Review.
Fleming, J. and Scott, A., 2020. Performance Measurement in Australian Police Organizations.
Jaiswal, D. and Dhar, R.L., 2016. Impact of perceived organizational support, psychological
empowerment and leader member exchange on commitment and its subsequent impact
on service quality. International Journal of Productivity and Performance Management.
Rehman, A.U. and Anwar, M., 2019. Mediating role of enterprise risk management practices
between business strategy and SME performance. Small Enterprise Research, 26(2),
pp.207-227.
Sharma, S. and Shah, B., 2016. Towards lean warehouse: transformation and assessment using
RTD and ANP. International Journal of Productivity and Performance Management.
THERESE, K., 2016. RISK MANAGEMENT AND PROJECT PERFORMANCE: A CASE
STUDY OF COLUMBUS PROJECT IN BANQUE POPULAIRE DU RWANDA
LIMITED (BPR Ltd) (Doctoral dissertation, Mount Kenya University).
Umbricht, M.R., Fernandez, F. and Ortagus, J.C., 2017. An examination of the (un) intended
consequences of performance funding in higher education. Educational Policy, 31(5),
pp.643-673.
Online
How Netflix does Performance Management, 2020, [Online], Available through:
https://www.performyard.com/articles/how-netflix-does-performance-management /

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