Netflix Film Analysis

1982 Words 8 Pages
For a company that was started because its CEO was frustrated when forced to pay obscene late fees for a rental movie, Netflix has come a long way. It has become a cultural phenomenon, even going as far as becoming a verb commonly used amongst it younger user base. Operating in an industry that was dominated by giants such as Blockbuster and Walmart, this startup company was able to be successful largely due to how it was able to create and uphold a corporate culture unlike any other. Technological advancements continually change the way a company operates and its ability to adapt and remain at the forefront ultimately determine whether or not it will be successful. This is especially true in the entertainment industry, Netflix started simply …show more content…
Employees are given standard benefits such as insurance and retirement plans as well as employee stock purchase plan but the similarities end there. Compensation is entirely individually determined and based on the market; managers are always looking at industry pay data or asking new recruits how much the competition offered. There are no bonuses at Netflix because Hastings believes that if the company has hired the right people a bonus won’t cause them to be more productive. Instead, they are built into the total salary, an aspect that Google also decided to implement in their own strategy. Pay for performance is common in many firms but there are issues associated with it, such as the one discussed by Frey and Osterloh: “People spend time figuring out how to game the system, focus solely on what is rewarded, and are not intrinsically motivated.”. Even in companies such as P&G where bonuses are determined by group success, there are employees who become complacent because other business units do well enough to merit the bonus for all. The Netflix compensation plan is simple to understand because there is a set base pay and the employees are able to alter the medium it is received in only if they want to, empowering them and giving flexibility of choice depending on individual preferences. Tom Krattenmaker conducted a study to understand the relationship between how types of pay are related to satisfaction and found that employees value base pay more than variable pay in relation to job satisfaction.. By eliminating variable pay employees do not have to worry about not receiving as much as they could have if certain metrics are met, and so

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