BU3571B – Human Resource Management
“Please read the 'How Netflix Reinvented HR' article. Critically evaluate the
company's theory of "A players".”
Netflix’s human resource strategy has proven extremely successful in the past few years, with the
construction of a solid apparatus that could sustain the company’s extremely fast growth. What
makes it so compelling, as Patty McCord (2014) –former Chief Talent Officer –defines it, is the fact
that it is “based on common sense”.
In her outline of Netflix’s system of talent management, McCord (2014) presents the two
statements which mold the company’s culture: hire only “A players” (highly skilled workers who
are naturally fit for a certain job and act in the best interest of the company) and let go of people
who no longer fit. This new approach to talent gave rise to many debates, concerning the concepts
of hiring only A players, freedom, self-improvement, and the “hire slow, fire fast” adage.
First, the impact of hiring only A players on a company’s performance was (and still is) at the
center of many discussions. According to McCord (2014), excellent colleagues are the best asset
you could give to your employees and to the company as well, and she is not the only one to think it
like that: during an interview released in 1995, Steve Jobs recognized in finding and hiring “truly
gifted people” an important key to Apple’s success. As a matter of fact, highly skilled workers
create an environment of continuous mutual learning and improvement, which eliminates the need
for training and development –a practice not really fancied by Netflix, which favors the selection of
already skilled workers and strongly believes in self-improvement. Moreover, unnecessary rules
and bureaucracy can be avoided by retaining only “fully formed adults” (McCord, 2014) whose
values reflect those of the company, leading to both increased savings and a culture of freedom,
which eventually boosts a sense of responsibility in employees by only asking them to “act in
Netflix’s best interests” (McCord, 2014).
On the other hand, it may be asserted that only hiring A players is neither possible nor beneficial for
a company. Indeed, the pool of talent companies can draw from contains a limited number of first-
class workers –and reasonably so, since if everyone was the best then everyone would be average
(Racki, 2018). In addition, only hiring A players could end up being counterproductive for a
company, since A players are leaders by definition, and would not accept to be subordinated to
other equally skilled colleagues. Ultimately, any company needs role players that work alongside
“all-stars” to help them achieve their goals (Hollon, 2016).
Hence, the best thing for a company to do would be to hire people who align with its core values
and to allocate them in the most suitable position. In other words, a firm should focus first on
identifying which are its strategically crucial – “A” –positions, and then on hiring the best people to
do those jobs (Huselid, Beatty, Becker, 2005).
The other main argument of debate is whether “hire slow, fire fast” is an advice that should be
followed. Is it sensible to fire people as soon as they are no longer useful to the company?
According to McCord, firing is essential to a company’s health and sustainability in the long run. If
managers keep fearing the emotional burden and consequences that the let go of an employee may
cause, their behavior will inevitably lead to what Guy Kawasaki defined as a “bozo explosion” –the
creation of a highly inefficient company.
“Fire fast” may sound like an insensitive strategy but, as both Greg McKeown and McCord suggest,
in the end it is not. In fact, it would not be fair to all employees to keep someone in the team that
not only doesn’t provide any useful skill but that may also create obstacles to the well-functioning
of the team he’s in (McKeown, 2014). Moreover, it would not be fair to the employee as well to be
forced to do something he is not good at and that he would not eventually enjoy. For these reasons,
if someone’s skills are no longer needed and another suitable position cannot be found within the
company, the best thing to do would be to fire the employee, giving him an adequate severance
package to be fair and avoid lawsuits (McCord, 2014).
Yet, it is also true that many employees consider the company they work for as a family, especially
if they have been working there for a long time, and it is not easy to let them go painlessly. Also,
many managers consider their team mates as people they invested time and money in, and are
reluctant to fire them even if the return on that investment is turning negative (Ryan, 2015).
Nevertheless, managers should always think like CEOs and prioritize the company’s profitability:
indeed, a firm with a high employee turnover can manage to remain competitive, avoiding the
massive lay-offs that would arise from its failure.
In the end, whether right or not Netflix’s strategy seems to be working well for the company, and it
triggered a revolution in the field of human resource management, pushing managers to open their
minds to a new approach to talent. Indeed, a growing number of successful firms is shifting to a
talent management approach focused on selective staffing and trust, hoping to achieve the same
results.
References
1. Healey, B. (2017). Netflix and trust: Why this is the number one hiring trend - HRM online. [online] HRM online.
Available at: http://www.hrmonline.com.au/section/featured/netflix-trust-number-one-hiring-trend/
2. Huselid, M., Beatty, R. and Becker, B. (2005). “A Players” or “A Positions”?”: The Strategic Logic of Workforce
Management. [online] Harvard Business Review. Available at: https://hbr.org/2005/12/a-players-or-a-positions-the-
strategic-logic-of-workforce-management
3. Investors Archive (2015). Steve Jobs on hiring "Truly Gifted" people. [video] Available at:
https://www.youtube.com/watch?v=E_F9qwg8YJY
4. Kruse, K. (2016). Netflix Has No Rules Because They Hire Great People. [online] Forbes. Available at:
https://www.forbes.com/sites/kevinkruse/2016/09/05/netflix-has-no-rules-because-they-hire-great-
people/#2cdbd95359bc
5. Lewis, R. and Heckman, R. (2006). Talent management: A critical review. Human Resource Management Review,
[online] 16(2), pp.139-154. Available at: https://www.sciencedirect.com/science/article/abs/pii/S1053482206000271
6. McCord, P. (2014). How Netflix Reinvented HR. [online] Harvard Business Review. Available at:
https://hbr.org/2014/01/how-netflix-reinvented-hr
7. McCord, P. and Green Carmichael, S. (2018). Hiring the Best People. [online] Harvard Business Review. Available
at: https://hbr.org/ideacast/2018/01/hiring-the-best-people.html
8. McKeown, G. (2014). Hire Slow, Fire Fast. [online] Harvard Business Review. Available at:
https://hbr.org/2014/03/hire-slow-fire-fast
9. Mills, S. (2016). Fully Formed Adults and Netflix. [online] Ashland University COM 305: Organizational
Communication. Available at: https://auorgcomm.wordpress.com/2016/10/07/fully-formed-adults-and-netflix/
10. Racki, K. (2018). Does every employee in your company need to be an ‘A-Player’?. [online] LTV with Kyle Racki.
Available at: https://blog.kyleracki.com/does-every-employee-in-your-company-need-to-be-an-a-player-74788ec6bc39
11. Ryan, L. (2015). 'Hire Slow, Fire Fast' - Possibly The Worst Advice Ever Given. [online] Forbes. Available at:
https://www.forbes.com/sites/lizryan/2015/04/04/hire-slow-fire-fast-possibly-the-worst-advice-ever-
given/#1761e8a924cf
12. Vaishnavi, V. (2013). The Importance Of Hiring 'A-Players' (Part Three). [online] Forbes. Available at:
https://www.forbes.com/sites/vickvaishnavi/2013/06/05/the-importance-of-hiring-a-players-part-three/#2853f7966957
