For Reed Hastings transformational leadership, creative intelligence and reciprocity come

together to best describe his leadership abilities. Hastings’ approach to personal time off,
travel policies, formal reviews and compensation packages are far from the mainstream and
often tiresome. A snap-shot into some of Netflix’s creative practices can be seen here:

1.) Personal time/Vacation Policy – Netflix does not have vacation policies. Reed got rid of
vacation policies because of the legal requirements for reporting. It’s expected you’ll work
when there’s work, and when you need a vacation to refresh, you’ll take that vacation with
the company’s best interest in mind. Instead of formally tracking vacation days, Netflix
allows salaried employees to take as much vacation time as they want, as long as it meets
certain guidelines.

Benefits- This enables employees to work without the distraction of stifling rules, be more
focused and productive.

It helps the organization to reduce cost and save valuable time. Instead of micromanaging
how people get their jobs done, the leadership focuses only on what matters—results.
They’ve found that giving people greater autonomy creates a more responsible culture.

2.) Pay top of the market– Hire the best and pay top dollar for it. Netflix always pay top of
the market salaries. In their words, ‘One outstanding employee gets more done and costs less
than two adequate employees’.

Benefits- It helps the employee to achieve a great level of satisfaction, motivating him/her to
effectively contribute towards the growth of the organization.

The organization benefits by employee retention, creating a positive, motivated and

satisfied work environment.

3.) Formal reviews –Hastings hates the word empowerment. He believes people come into
the company with power, and bureaucracy strips away that power. If you strip away the
bureaucracy, you give your people power. Netflix has a yearly “360 Review.” The review
form is a blank text box. It is not used to determine compensation. It is not anonymous. It
happens once a year. Everyone in the company is permitted to review anyone in the
company, and the employees are adult enough to write constructive reviews to pertinent team
members.

Benefits- The employees benefit with a fair and transparent performance review free from
any biasness and bureaucracy.

The organization is benefitted by a trust-culture, avoiding ego clashes.

4.) Compensation – No bonuses; employees are offered market-based pay and can select
how much (if any) compensation would be in the form of equity; those with stock options
have their salaries reduced accordingly.
Benefits- It helps the employees to work without the distraction of stifling rules. Employees
are more focused and productive.
The organization is benefitted by ensuring retention of employees by offering them flexible
compensation options and market-based pay.

Thus, Hastings empowers his workforce, believes they are sophisticated enough to manage an
autonomous-driven work environment and will ultimately do what is right for Netflix,
themselves as employees and their families. To reinvent the company’s human resource
policies so radically can be viewed as a testament to Hastings creative intelligence and
transformational leadership abilities. Hastings believes that creating a company culture at
Netflix centered on traditional corporate practices would not work and negatively impact
motivation, attitudes, behavior and performance. The positive company culture created by
Hastings has fostered reciprocity where employees feel obligated to repay the company by
performing well. Today the company culture and their performance are well revered. Since
being founded in 1997, the company is worth an estimated $23 billion with stock increases
rising more than 200%.

CONCLUSION/APPENDIX-
Interview technique- Casual Conversation followed by a telephonic interview to arrive at the RTP.
After our conversation with the factory manager, we came to know that this company deals with
Below-the-line advertisement services (such as Billboards, Banners, Flex etc.) With their 10 years of
establishment, the company has retained a good number of repeat clients. On the other hand, they are
facing challenges in attracting new clients due to their competitors. From FMEA analysis it is
observed that the company is labour intensive and this turns out to be one of the major challenges to
keep up with the market trends and the needs. Whereas the market research contributes the least RTP.
It was noted that with the company’s dedicated research team and department, it is able to tap the
right market according to the client needs and specifications.