Case Study 6.1: Netflix Neck et al. Chapter 6
Introduction
What does it mean to be a game-changer? In 2012, an internal PowerPoint at Netflix outlining new employee practices achieved “viral” status. Sandberg, the organization’s COO said it “may well be the most important document ever to come out of [Silicon] Valley.” As you read Case Study 6.1: Netflix in Chapter 6 of the Neck et al. textbook consider what was revealed in that PowerPoint? Was the content innovative or simply a “commonsense” approach to the contemporary work environment?
The document °It’s w a relatively new industry society. document is hat we wisohnlvivnfe’ears to work on managing industrial firms, “our version of Letters to a Young Poet for budding that experience. Were just beginning to learn e had understood when we started:” He on entertainment—demands s new n (manufacturing so a Lot of as. As a on to arg ed Paracligmu that reativa 176 PART U INDIVIDUAL PROCESSES entrepreneurs;’ how to run ccer4c1 preneurs:’ Re firms which is creative firms The Payoffs HR practices are centered in firms.thrive on increasing we’ve had hundreds haul quite different. . . of its HR P : t. Industrial firms thrive on reducing variation olicies has yielded positive results. Despite the Lack vane : variation (innovation)” are still clear: you have the freedom to of careft-k ° make decision ecisions. ors): 9 err Netflix also offersup Freedom outlined procedures, . but keep isn’t necessary Netftix’s over equals creates more efficiency. Employees don’t have to worry about whether that in mind what is e als reduced stress, arguably. The level of flexibility and self-manag to beat its enough days off to take a trip or whether they’ve worked long enough h s the best for the company. The HR department at Netflix has re i7s, expectations ar people over the head with exactly how to make good d a. l -ed that it or whetherhours management th the boss. They aren’t fretting over how the big annual review will go, they’ll impress get the score that will earn the bonus they’ve been counting on. Eliminating these typical they’ve racked g t ors motivates employees to stay focused on creating ideas and solutions f for the workplace s ress Managers no longer have to spend time “in the weeds” developing improvement plans and s. a At Netflix, clear and honest communication thrives. Employees don’t fear retribution for Look: into openings with other companies; they can go to HR and openly discuss other possibilitieing business. as long no longer relevant, it’s candid about why. As McCord puts it, “People can handle anything colleagues who are not performing. While Netflix lets people go whose knowledge and skills mediocre workers for results. Likewise, employees are less likely to have to pick up slack for riding i – are as they’re told the truth.” in zero lawsuits severance package to employees who are no longer a good fit has reQuitJ.,,i Being straightforward has costs, but having direct conversations with and -Iffering a gene rather than continuing to invest in someone who cannot do what’s needed hi ‘ ‘ ‘ over termination to date. HR is also empowered to find someone who fli,-: ;;-.:‘,. Nil rat While e risr‹,i,g the morale and motivation of fellow coworkers. By allowing its employees plenty of liberty to make decisions for themseives, Netflix has reaped great rewards in employee motivation, efficiency, and productivity. White the premise may have seemed risky, it proved to be a commonsense solution for issues most HR departments face. Considering the way it revolutionized and streamlined the movie rental process for changing times, it is hardly surprising that Netflix seems to have done the same for employee motivation.
Case Questions
1. How does Netflix use intrinsic motivation to support its HR practices?
2. Why would a creative firm choose to use intrinsic motivation where an industrial firm would probably choose to use extrinsic rewards?
3. Explain the appeal of nontraditional work schedules and how Netflix has chosen to implement them.