Netflix Found the Right Way to Treat Their Employees

by Nathaniel E. Urban 

Photo Credit www.youtube.com
Photo Credit http://www.youtube.com

Introduction

The purpose of this case study is to discuss Netflix’s organizational culture. Their culture follows a philosophy where they only hire “fully formed adults” or “A” players to work alongside them. Netflix offers a great deal of individual freedom and responsibility to its employees. This case study will describe in detail the seven aspects of Netflix culture and how those aspects foster such a successful organization. It will also look at how I have experienced these aspects in organizations I have been a part of and what my ability to adapt as a worker in the Netflix culture would look like.

Netflix Culture

The first aspect of Netflix culture is values are what we value. Netflix describes it as, “Actual company values are the behaviors and skills that are valued in fellow employees” (Netflix, 2009). Netflix says that nice-sounding value statements posted on the walls of organizations are much less effective from the actual values that employees possess. The second aspect is high performance, which Netflix clearly states that they are a team and not a family. Employees are reminded that Netflix values performance over job security and stability.

Freedom and responsibility is the third aspect. Netflix believes that, “Responsible people thrive on freedom, and are worthy of freedom” (Netflix, 2009). Their goal is to increase their employee’s freedom as the organization grows rather than limit it with the goal that an employee will be responsible with the freedom that is granted to them. The fourth aspect is called context, not control. Great managers figure out how to get great outcomes by setting the appropriate context, rather than trying to control their employees. Employees will perform better work if they understand the context of a situation and how their work relates to Netflix’s goals. The responsibility is on the manager to set the context so a talented employee will not perform poorly.

Highly aligned, loosely coupled is the fifth aspect where the goals and strategies of employee groups are highly clear and specific. Meetings between groups are then minimal and only used to get aligned on goals. The work of individual groups is loosely constructed but their goals are clearly aligned. The sixth aspect is called pay top of market. The main idea is that, “One outstanding employee gets more done and costs less than two adequate employees” (Netflix, 2009). Netflix believes in keeping each employee at the top of the market according to that person. This means paying them more than anyone else would, paying them as much as a replacement would cost, and to pay them as much as they would pay to keep them if they had a higher offer elsewhere. Netflix also believes it is important for each employee to understand their market value and to research what their value may be worth at other organizations.

The last aspect of Netflix culture is called promotions and development. For some employees, there will be an enormous amount of opportunity for promotions and career development due to their hard work and talents. Netflix says, “We develop people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them big challenges to work on” (Netflix, 2009). Netflix relies on their employees to improve their performance and character through personal experience, discussion, and observation. Netflix does not support formalized personal-development such as performance reviews or mentoring assignments.

Netflix is able to foster such a successful organization because their culture is heavily dependent on their employee’s personal responsibility and performance. The values which their employees possess are the values that define their organization. The simple element of Netflix’s philosophy is, “The best thing you can do for employees – a perk better than foosball or free sushi – is hire only “A” players to work alongside them” (McCord, 2014). Employees are given the opportunity, freedom, and responsibility to provide their best work with the best people. Managers set the context for what they expect from their employees so employees have clearly defined goals with the loosely structured environment to achieve those goals. Employees also have the freedom to understand and explore their market value. Lastly, it is the responsibility of Netflix employees to decide how far they want to promote and develop themselves in the organization.

Critical Analysis

I have not experienced all the aspects of Netflix’s culture in the organizations I have worked for so far. I have, however, experienced context, not control and highly aligned, loosely coupled in a summer internship I had in Washington, D.C. The context and goal of the intern positions were simple: Who I and the other interns worked for was an organization dedicated to improving college core curriculums. Our jobs were to review college’s core curriculums and report what was wrong with the curriculums according to our organization’s standards. It was a simple goal in the context of the whole organization’s mission with all the responsibility of the work on the interns. Our supervisor checked in with us every morning and afternoon and the rest of the time was for the interns to work.

I think I would thrive as an effective worker at Netflix. I am not someone who likes to be micro-managed and I enjoy when I am trusted with the responsibility to work on a large project independently. The worst thing a manager can do is try to fix every little mistake that an employee makes. For example, “Giving employees greater freedom and holding them to higher standards, while not sweating tiny details, are common-sense approaches that seem likely to help many companies beyond Netflix” (Stenovec, 2015). I would be able to focus on the work that is vital to mine and Netflix’s reputation because no one would be watching every move I made. I would also hold myself to higher standards apart from the higher standards that Netflix would hold me to.

 

References

Netflix. (2009, August 1). Netflix Culture – SlideShare. Retrieved from http://www.slideshare.net/reed2001/culture-1798664

McCord, P. (2014, January). How Netflix Reinvented HR. Retrieved from https://hbr.org/2014/01/how-netflix-reinvented-hr

Stenovec, T. (2015, March 3). One Reason for Netflix’s Success – It Treats Employees Like Grownups. Retrieved from http://www.huffingtonpost.com/2015/02/27/netflix-culture-deck-success_n_6763716.html

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