Human resource management could have an important impact on the performance of an organization. As demonstrated by Netflix in the past 17 years, determining the right mix of personnel at an organization can have a positive impact on the performance of an organization. Among other strategies that the company employed to achieve its outstanding success, the most important was keeping employees satisfied by allowing them to take whatever vacation time they wanted. Other concepts the company demonstrated included ensuring that the company only hires, rewards, and tolerates people with a desire for high performance (McCord, 2014). The other is that the company always tells employees the truth about performance. The top management also ensures that managers are proactive in creating great teams (McCord, 2014). At the company leaders are given the role of creating and upholding the company’s culture. Finally, those who are hired in HR have to be good talent managers who think like business people and innovators (McCord, 2014).
The idea that Netflix’s plan has had an exceptional impact on the company’s performance is indisputable. The outcome of the plan was particularly evident in 2013 when the company’s stock tripled, the company won three Emmy Awards, and its subscribers grew to up 29 million in the United States (McCord, 2014). The company relied upon effective human resource management practices, and they paid off. One observation made from the Netflix case study is that despite the company’s market performance having been threatened by the dot-com bubble burst and 9/11 attacks, its decision to cut down on the number of employees paid off. In response to the struggles that followed the two events of the early 2000s, the company opted to reduce its employees by 30% (McCord, 2014; Slocum, Lei & Buller, 2014). This was followed by the rise of the demand for DVD players so that the workload increased. However, as McCord (2014) observes, the employees still preferred having a larger workload than having to work alongside underperforming employees. Yet another observation made by the top management was that it was necessary to let go of employees whose skills become inadequate as the company evolves. In most companies, there is a tendency of creating a new role to accommodate employees whose skills are no longer required, the move being justified by the idea that the person has a good work ethic and is well liked across the organization. However, with the need to retain only the best performers and most qualified personnel, the top management opted for sending off such employees with rich severance packages. The author thus notes that having excellent employees outdoes any other human resource strategy. This, followed by the five-step process helped in steering the company to the success it enjoys to date.
Alternative Points of View
One notable advantage of Netflix’s plan is that it steered the company to financial success. Through years of consistency, the plan paid off by making the company a global leader in the provision of media services (Dao, Langella & Carbo, 2011). In spite of this fact, the company still notes that it does not necessarily strive to become the best workplace for its employees. This factor might be considered disadvantageous by some. Nonetheless, the fact that the plan inspires innovation ensures that the company does not default to mimic other companies’ best practices. Another aspect of the Netflix plan that may be seen as disadvantageous is the idea of allowing employees to choose the vacation time they would be like. However, with Netflix requiring employees to act in the company’s best interests, the plan has worked out well for the company. Whether such an approach would work in other companies is a matter of question. Critical guidance from managers and supervisors would be necessary to get the plan to work without impacting negatively on a company’s performance.
My Point of View
I consider Netflix’s idea of encouraging innovation in HR to be effective in inspiring growth. Moreover, I find it inspiring that the company only hires people with a desire for high performance. By inspiring creativity and innovation, the company is well placed to come up with valid solutions for responding to changes in its market of operation. This is because it is only through creative processes that employees can be well equipped to respond to unprecedented challenges.
Netflix has demonstrated that efficient human resource practices could have a positive impact on the performance of a company. By creating a culture of getting the best out of its employees, the company has made it possible to ensure that only the most competent individuals are recruited to the company. Moreover, the role played by leaders in upholding the company’s culture cannot be overlooked. Unlike organizations that rely on other companies’ best practices, Netflix opts to utilize a culture of innovation, something that is made possible by recruiting talent managers who think like business people and innovators. These are just some of the aspects that have elevated this company to the position it enjoys today.
Dao, V., Langella, I., & Carbo, J. (2011). From green to sustainability: Information Technology and an integrated sustainability framework. The Journal of Strategic Information Systems, 20(1), 63-79.
McCord, P. (2014). How Netflix reinvented HR. Harvard Business Review, 92(1), 71-76.
Slocum, J., Lei, D., & Buller, P. (2014). Executing business strategies through human resource management practices. Organizational Dynamics, 43(2), 73-87.