Case Study 6.1 Netflix Introduction Motivation practices and applications influence processes such as leadership, power and politics and communication affecting the organizational outcomes.  Organizational outcomes such as individual performance, job satisfaction, team performance affect the organizational goals. The organization goals are affected by the entire process on how organizational behavior is handled in the entire organization.  Unit Learning Outcomes ULO 1: Analyze the concept of intrinsic motivation and its primary determinants. (CLO 1 & 3) ULO 2: Evaluate the various types of extrinsic rewards. (CLO 4) Directions Mini-case studies: The students are expected to answer the questions associated with the case. These questions are intended to elicit thoughtful reactions to contemporary organizational behavior initiatives and challenges. The students are expected to carefully read the assignment instructions, then thoroughly and explicitly address each component of the corresponding case study questions. The responses should reflect higher level cognitive processing (analysis, synthesis, and evaluation), which is essential for someone in any industry, as diversity decisions affect all levels and stakeholders within the organization and in the external marketplace. There is no minimum number of references that need to be utilized to support the completion of this assignment; however, it is generally understood that any good case study analysis will incorporate the appropriate quality and quantity of scholarly sources to support any suppositions and recommendations. The submission will not exceed four (4) pages in length, excluding the title and references pages. The document must adhere to the APA writing style. The document should be prepared as a Microsoft Word file. Case Study 2 1. Read the case study 6.1 Netflix in your text. 2. Intrinsic Motivation · http://www.theatlantic.com/business/archive/2015/05/being-a-go-getter-is-no-fun/393863/ (Links to an external site.) · “New research suggests that competent employees are assigned more work—but they don't always like it.” · This resource relates to Learning Objective 6.1. Read more on page 141. 3. Answer the case questions in a written APA paper formatCase Study 6.1: Netflix Netflix’s new employee practices have grabbed attention, to put it mildly. In 2012, a simple internal PowerPoint explaining them went viral and was viewed more than 5 million times on the Web. Sheryl Sandberg, chief operating officer of Facebook, said it “may well be the most important document ever to come out of [Silicon] Valley.” Dozens of bloggers and journalists scrambled to analyze its contents. And Netflix is surely doing something right: In 2013, the company’s stock value tripled. It reached a record 29 million subscribers and won three Emmy Awards for its original show House of Cards. What was revealed in that game-changing PowerPoint? It was simply a “commonsense” approach, according to Patty McCord, the.

1. Case Study 6.1 Netflix
Introduction
Motivation practices and applications influence processes such
as leadership, power and politics and communication affecting
the organizational outcomes. Organizational outcomes such as
individual performance, job satisfaction, team performance
affect the organizational goals. The organization goals are
affected by the entire process on how organizational behavior is
handled in the entire organization.
Unit Learning Outcomes
ULO 1: Analyze the concept of intrinsic motivation and its
primary determinants. (CLO 1 & 3)
ULO 2: Evaluate the various types of extrinsic rewards. (CLO
4)
Directions
Mini-case studies: The students are expected to answer the
questions associated with the case. These questions are intended
to elicit thoughtful reactions to contemporary organizational
behavior initiatives and challenges. The students are expected to
carefully read the assignment instructions, then thoroughly and
explicitly address each component of the corresponding case
study questions.
The responses should reflect higher level cognitive processing
(analysis, synthesis, and evaluation), which is essential for
someone in any industry, as diversity decisions affect all levels
and stakeholders within the organization and in the external
marketplace.
There is no minimum number of references that need to be
utilized to support the completion of this assignment; however,
it is generally understood that any good case study analysis will
incorporate the appropriate quality and quantity of scholarly
sources to support any suppositions and recommendations.
The submission will not exceed four (4) pages in length,
excluding the title and references pages.

2. The document must adhere to the APA writing style.
The document should be prepared as a Microsoft Word file.
Case Study 2
1. Read the case study 6.1 Netflix in your text.
2. Intrinsic Motivation
· http://www.theatlantic.com/business/archive/2015/05/being-a-
go-getter-is-no-fun/393863/ (Links to an external site.)
· “New research suggests that competent employees are
assigned more work—but they don't always like it.”
· This resource relates to Learning Objective 6.1. Read more on
page 141.
3. Answer the case questions in a written APA paper
formatCase Study 6.1: Netflix
Netflix’s new employee practices have grabbed attention, to put
it mildly. In 2012, a simple internal PowerPoint explaining them
went viral and was viewed more than 5 million times on the
Web. Sheryl Sandberg, chief operating officer of Facebook, said
it “may well be the most important document ever to come out
of [Silicon] Valley.” Dozens of bloggers and journalists
scrambled to analyze its contents. And Netflix is surely doing
something right: In 2013, the company’s stock value tripled. It
reached a record 29 million subscribers and won three Emmy
Awards for its original show House of Cards.
What was revealed in that game-changing PowerPoint? It was
simply a “commonsense” approach, according to Patty McCord,
then Netflix’s chief talent officer and one of the presentation’s
authors. Netflix treats the people it hires as grownups. It grants
them a great deal of freedom, and it expects them to use it
wisely.Game Changers
Conventional human resources (HR) is full of structure and
documentation. Directors spend hours drafting standard
operating procedures about time off, performance appraisals,
training, and more. Netflix has simplified the process by doing
away with many of these policies and focusing on results rather
than processes.
McCord realized that motivating employees to produce

3. outstanding results had a lot to do with trusting them with
greater independence. That didn’t mean installing an arcade or
skateboard park, as other tech companies have done.
Instead, Netflix started doing away with formal procedures.
Among the first to go was the leave procedure. Gone were the
standard 10 days of vacation, 10 holidays, and handful of sick
days. The new policy? Take what you need when you need it.
Giving employees the leeway to take as much vacation time as
they’d like might strike many HR professionals as reckless.
Wouldn’t people abuse such a liberal leave plan? McCord,
however, had shifted to a different philosophy. Written policies,
she reasoned, were mainly designed to eliminate problems
created by a very small percentage of employees. The vast
majority of people, and particularly the type of
person Netflix tries to recruit, could be counted on to use
common sense in their decision making.
This approach was extended to other areas. Travel and expense
accounts are generally kept under a watchful eye, policed by HR
or accounting to ensure that money is being spent in an
acceptable manner, with plenty of documentation and
accountability. Netflix turned tradition on its head, creating
what may be the shortest expense policy any company has ever
set: “Act in Netflix’s best interests.” Employees are also
allowed to book their own travel online rather than going
through a designated travel agent, allowing them to choose the
best price.
Netflix compensates its employees very well, but there’s
freedom there, too. People can choose what portion of their pay
they would like to receive in direct compensation and what
portion in stock options. This allows them to consider what sort
of risk level they’re comfortable with (the value of any
company’s stock will fluctuate over time) and what is best for
them and their families. Netflix also eliminated performance-
based bonuses, preferring to pay people fairly and trust them to
do good work. There are no “golden handcuffs”—a form of
retention plan that does not allow employees to receive stock

4. options or other incentives until they’ve reached a certain
number of years of service. Employees are also encouraged to
research and interview with competitor companies and then
have frank discussions with HR. This helps both the
department and the employee know what is are good salaries for
various positions.
The company also decided to forego conventional performance
reviews. It eliminated the performance metrics typical of many
companies’ evaluations, like grading an employee on a five-
point scale in a variety of different tasks and expectations.
Instead, a “360-degree review” is performed, which is an open
conversation between employees and their managers about
feedback from people inside (and occasionally outside) the
company who have any contact with the employee. The
evaluation is largely centered on one question for the manager,
known as the “keeper test”: “Which of my people, if they told
me they were leaving in two months for a similar job at a peer
company, would I fight hard to keep at Netflix?” If someone’s
skills and abilities are no longer a match for the company, the
person is given a generous severance package upon exit. As
CEO Reed Hastings told the Harvard Business Review,
paraphrasing a section of the now-famous PowerPoint:
“‘Adequate performance gets a generous severance package.’
It’s a pretty blunt statement of our hunger for excellence.”
The document is “our version of Letters to a Young Poet for
budding entrepreneurs,” Reed continued. “It’s what we wish we
had understood when we started.” He goes on to argue that a
relatively new industry—online, on-demand entertainment—
demands new paradigms. “As a society, we’ve had hundreds of
years to work on managing industrial firms, so a lot of accepted
HR practices are centered in that experience. We’re just
beginning to learn how to run creative firms, which is quite
different. Industrial firms thrive on reducing variation
(manufacturing errors); creative firms thrive on increasing
variation (innovation).”The Payoffs
Netflix’s overhaul of its HR policies has yielded positive

5. results. Despite the lack of carefully outlined procedures, the
expectations are still clear: you have the freedom to make
decisions, but keep in mind what is best for the company. The
HR department at Netflix has realized that it isn’t necessary to
beat its people over the head with exactly how to make good
decisions.
Freedom equals reduced stress, arguably. The level of
flexibility and self-management that Netflix also offers creates
more efficiency. Employees don’t have to worry about whether
they’ve racked up enough days off to take a trip or whether
they’ve worked long enough hours to impress the boss. They
aren’t fretting over how the big annual review will go, or
whether they’ll get the score that will earn the bonus they’ve
been counting on. Eliminating these typical workplace stressors
motivates employees to stay focused on creating ideas and
solutions for the business.
At Netflix, clear and honest communication thrives. Employees
don’t fear retribution for looking into openings with other
companies; they can go to HR and openly discuss other
possibilities. Managers no longer have to spend time “in the
weeds” developing improvement plans and riding mediocre
workers for results. Likewise, employees are less likely to have
to pick up slack for colleagues who are not performing.
While Netflix lets people go whose knowledge and skills are no
longer relevant, it’s candid about why. As McCord puts it,
“People can handle anything as long as they’re told the truth.”
Being straightforward has costs, but having direct conversations
with and offering a generous severance package to employees
who are no longer a good fit has resulted in zero lawsuits over
termination to date. HR is also empowered to find someone who
fits the bill rather than continuing to invest in someone who
cannot do what’s needed while risking the morale and
motivation of fellow coworkers.
By allowing its employees plenty of liberty to make decisions
for themselves, Netflix has reaped great rewards in employee
motivation, efficiency, and productivity. While the premise may

6. 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.Sources
Baer, Drake. “Netflix’s Major HR Innovation: Treating Humans
Like People.” Fast Company. March 13,
2014. www.fastcompany.com/3027124/lessons-learned/netflixs-
major-hr-innovation-treating-humans-like-people.
Fenzi, Francesca. “3 Big Ideas to Steal
from Netflix.” Inc. February 5, 2013. www.inc.com/francesca-
fenzi/management-ideas-to-steal-from-netflix.html.
Grossman, Robert J. “Tough Love at Netflix.” HR.. April 1,
2010. www.shrm.org/Publications/hrmagazine/EditorialContent/
2010/0410/Pages/0410grossman3.aspx.
Kamensky, John. “Netflix’s 5 Tenets of HR.” Government
Executive. February 14,
2014. www.govexec.com/excellence/promising-
practices/2014/02/netflixs-5-tenets-hr/78827/.
McCord, Patty. “How Netflix Reinvented HR.” Harvard
Business Review (January–February
2014). http://hbr.org/2014/01/how-netflix-reinvented-hr.
Nisen, Max. “Legendary Ex-HR Director from Netflix Shares 6
Important Lessons.” Business Insider. December 30,
2013. www.businessinsider.com/netflix-corporate-culture-hr-
policy-2013-12.
No Author. “Netflix Wins Three Emmys.” Huffington
Post. September 23,
2013. www.huffingtonpost.com/2013/09/22/netflix-emmys-

7. house-of-cards-wins_n_3973794.html.