Netflix Case Analysis
Assignment 10------Group 2
1) What are the HR practices that support the high-performance culture at Netflix? Identify the specific practices and briefly explain how.
Netflix has a high performance culture which has been described as “freedom and responsibility”. There are several specific HR practices for them to support such a “fully formed adult” culture in the company.
First, comparing with the similar position in other companies, Netflix attracts talented employees with the highest payment in the hiring process. That is to say, Netflix will pay the target employee as much as they can, which may equal to the replacement cost or even higher than other companies’ payment. Second, Netflix will terminate the employee who did not reach the expectation of the company and give the position to more effective replacements. By this practice, only the highest performed employee has been retained. It makes Netflix keep in the high performance. Third, Netflix uses the annual report for the compensation and performance of employees. The most recent market compensation, the employee’s role and responsibility will be considered for their adjustment in compensation. It will reassure employees being well compensated relative to similar jobs and also reinforce the possibility of Netflix for retaining top performers. Forth, Netflix doesn’t track the vacation time. They will offer unlimited vacation during the year only if the employee doesn’t meet their performance expectation. Fifth, the other benefits of Netflix were more conventional. Employees were offered comprehensive health, dental, vision and life insurance. It also offered a 401(k) and an employee stock purchase plan (ESPP).Sixth, Netflix has a unique compensation mix way in their compensation system. It means the percent of compensation which awarded in cash and stock option was decided by the employee. This kind of mix way will be not more economically efficient and provide better incentive value for
1) What are the HR practices that support the high-performance culture at Netflix? Identify the specific practices and briefly explain how.
Netflix has a high performance culture which has been described as “freedom and responsibility”. There are several specific HR practices for them to support such a “fully formed adult” culture in the company.
First, comparing with the similar position in other companies, Netflix attracts talented employees with the highest payment in the hiring process. That is to say, Netflix will pay the target employee as much as they can, which may equal to the replacement cost or even higher than other companies’ payment. Second, Netflix will terminate the employee who did not reach the expectation of the company and give the position to more effective replacements. By this practice, only the highest performed employee has been retained. It makes Netflix keep in the high performance. Third, Netflix uses the annual report for the compensation and performance of employees. The most recent market compensation, the employee’s role and responsibility will be considered for their adjustment in compensation. It will reassure employees being well compensated relative to similar jobs and also reinforce the possibility of Netflix for retaining top performers. Forth, Netflix doesn’t track the vacation time. They will offer unlimited vacation during the year only if the employee doesn’t meet their performance expectation. Fifth, the other benefits of Netflix were more conventional. Employees were offered comprehensive health, dental, vision and life insurance. It also offered a 401(k) and an employee stock purchase plan (ESPP).Sixth, Netflix has a unique compensation mix way in their compensation system. It means the percent of compensation which awarded in cash and stock option was decided by the employee. This kind of mix way will be not more economically efficient and provide better incentive value for