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AMAZON: Paying Employees to Quit

Tuesday, Apr. 22, 2014
Source: Softpedia
Source: Softpedia

Amazon has made headlines recently for a surprising policy: it pays its workers to quit, but not in order to reduce the size of its workforce. Amazon believes that an employee who takes the offer should not be at the company in the first place. CEO Jeff Bezos explained the program by stating, “In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.” The cost of poorly motivated workers is well documented, with Gallup estimating that $450 to $550 billion a year is lost in the United States alone — Amazon’s “Offer” starts at $2,000 and tops off at $5,000. A few have suggested this policy may reduce the likelihood that employees will press for that are really needed, and will instead take the money and run. Is “paying employees to quit” a practice that should be accepted and widely adopted?

  Kirk: I think this gimmick is a terrible idea. I believe a company has an obligation to create a healthy environment that motivates its workers. This approach would seem to reject that responsibility, preferring to shed anyone who does not like the existing conditions. Companies need the ideas and suggestions of workers who see troublesome cultural practices and policy problems. By driving them away, the company signals that it does not want employees' input. This will not create a culture of constant improvement and mutual respect.

  Patrick: I share Kirk’s concerns, but I also think that Amazon might be on to something here. For one, paying dissatisfied employees to leave signals to other workers that Amazon is serious about protecting its culture and success. On the financial side, the policy will likely save Amazon money in recaptured productivity as well as avoiding more expensive severance packages. The fear is that companies will completely outsource culture management with these “pay to quit” deals — and at that point, workers will quit for free.

Why is Amazon paying workers up to 5K to quit? (USA Today)

A Framework for Thinking Ethically (Markkula Center)

 

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Comments Comments

Greg said on Apr 22, 2014
I don't see the problem that Kirk appears to find. What in the article provides any information that Amazon is not providing a healthy and motivational environment? The Quit Bonus does not reject that responsibility. The employee and employer both have responsibility to foster a cooperative environment for a healthy and motivated work place. The Quit Bonus levels the playing field for the employee. The employer always has the ability to terminate the relationship with the employee with minimal or no consequences. The employee faces substantial financial uncertainty and difficulties if they quit the main source of income. The Quit Bonus allows the employee to minimize the economic hardship of quiting. An employer faced with mobile employees, is more at the mercy of supply and demand of labor. The value of a trained and experienced employee is more recognizable to the employer. It also increases the perception that employee is there because he wants to be, not just becuase he has no other choice. In complete opposite to Kirk's hypothesis that the Quit Bonus poly drives away valuable suggestion, the policy gives value to employee suggestions, with the impetus to keep the experienced and loyal employees. Again, the core of this policy is fostering a culture of mutual respect which will enable continued improvements to the organization. - Like - 2 people like this.
Patrick said on Apr 22, 2014
Greg, thanks for the reply. Shown by my response above, I see some redeeming qualities in "the offer," but I'm not sure if you're giving credence to some of the concerns in play. On "providing a healthy and motivational environment," Amazon is notorious for the harsh working conditions in its distribution centers (check out the Salon article "Worse than Wal-Mart"). Paying people to leave could inadvertently become a way to filter out dissenters and maintain a flawed status quo--particularly because of how easy it is to leave given the bonus. In terms of whether the policy gives a greater voice to employees, I'd agree may, as a byproduct, make those who stay be perceived as being more valuable or special, but the potential problem arises earlier down the line. The key aspect is what types of people does the corporation value and give status to? You listed experience and loyalty. Is suggesting a needed change that management disagrees with considered unloyal? (e.g. The temperature in the distribution center is too high to the point of being unsafe). We're on the same page that there are some benefits here, but I don't think it's that cut and dry. - Like
Greg said on Apr 22, 2014
Again, the Quit Pay policy removes much of the disincentive to quit a lousy job. The Salon article relied much on histronics, making most of it's points with exceptions. Within the article is ample evidence of the value of experienced workers. It's not until a temp employee had been there for months that the production levels changed. It was mentioned the many did not fail to meet the initial production goals. Curious that they higher production goals were not required at the on-set. The value of a production employee, even within Amazon's culture, is evident. I don't deny there are abuses, mistakes, and cultural exploitation. That is true in any corporation, and more possible in larger corporations. A fundamental counter action to the exploitation by an employer, is for the employee to be able to afford to leave, seek recouse from safety agencies, etc.. Amazon also subsidizes education and training programs for it's employees, further empowering an employee to afford employment termination. Employment is rarely enslavement when there are options. Again, I'm not characterizing Amazon as one of the 5 best international employers, but it would be as unfair and inaccurate to claim they are one of the 5 worst. - Like - 2 people like this.
Patrick said on Apr 22, 2014
Greg, I'm with you that Amazon does do worthwhile things for its employees, and I am by no means making the argument that Amazon is one of the worst employers. It's just a question whether the "pay to quit" policy is a step in the right direction or not. - Like
carrie said on Apr 22, 2014
This is an interesting strategy on the part of Amazon, and may be in part an answer to some of the poor press and image issues they have had lately, particularly concerning the treatment of their workers at their fulfillment facilities. They have to be careful how they position themselves with labor and staff issues, and make sure they aren't perceived as trying too hard to improve their image. - Like - 1 person likes this.
Patrick said on Apr 22, 2014

Good point, Carrie. I think that the practice was inherited by Zappos, which Amazon acquired, but it's interesting how the policy can be interpreted as both a positive and a negative--as this discussion shows!

- Like
Greg said on Apr 22, 2014
From what source is it even worthwhile to speculate on motive by the timing of your awareness? The story is recent, but a little research reveals it has been a policy for a few years. Kirk calls it a 'gimmick', but I don't think the policy can be easily labled as such. Perhaps in Amazon's situation, it is, if the policy is far removed from it's overall culture. Just as likely, the pay to quit policy could be an incremental shift towards a more cooperative and fair employer/employee relationship. To your question, Patrick, I believe that fundamentally it is an ethical and fair policy, since it provides financial aid to an employee that enables them to seek employment elsewhere. Considered in conjunction with the Salon article and common sense, and employer has ample ability to terminate employment with little negative, whilst a low wage employee is serverly limited by their financial resources. In considering this employment policy, shouldn't we give little weight to the gerneral perception, and mor seriously consider the effects on either party's ability to make choices and act on them? - Like - 1 person likes this.
Patrick said on Apr 22, 2014
Great thoughts on this, Greg. I largely agree with you, as evidenced by my original response. But where we disagree is on whether the policy is both "fundamentally fair and ethical." Given the potential abuse cases outlined by Kirk's response and my follow up replies, I'd say it is clear that this policy can certainly be abused and even be implemented with malintent. - Like
carrie said on Apr 22, 2014
This is an interesting strategy on the part of Amazon, and may be in part an answer to some of the poor press and image issues they have had lately, particularly concerning the treatment of their workers at their fulfillment facilities. They have to be careful how they position themselves with labor and staff issues, and make sure they aren't perceived as trying too hard to improve their image. - Like - 1 person likes this.
Rachel-ann said on May 6, 2014
I have seen this done before and it only works on individuals that are weak and desperate for the money. Employees who love what they do and what the company should stand for and are seeking the company's best interested by highlighting the pitfalls of the company, wouldn't be fazed by the pay off. All that would be created is an atmosphere of tension and a division between management and workers. In Amazon's case how do you determine 'that an employee is where he doesn't want to be' and the worker isn't expressing genuine concern for the company. At the end of it all , Amazon can pretty it up as much as they want but this is an effort to intimidate workers to"hush" and just take whatsoever management says. - Like
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