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Why Amazon Pays Some of Its Workers to Quit
Why Amazon Pays Some of Its Workers to Quit
excerpt of article
On Monday, Amazon reportedly began a series of rare layoffs at its headquarters in Seattle, cutting several hundred corporate employees. But this week, something quite different is happening at the company’s warehouses and customer-service centers across the country: Amazon will politely ask its “associates”—full-time and part-time hourly employees—if they’d prefer to quit. And if they do, Amazon will pay them as much as $5,000 for walking out the door.
Officially called “The Offer,” this proposition is, according to Amazon, a way to encourage unhappy employees to move on. “We believe staying somewhere you don’t want to be isn’t healthy for our employees or for the company,” Ashley Robinson, an Amazon spokesperson, wrote to me in an email. The amount full-time employees get offered ranges from $2,000 to $5,000, and depends on how long they have been at the company; if they take the money, they agree to never work for Amazon again. (The idea for all this originated at Zappos, the online shoe retailer that Amazon bought in 2009.)
Considering that Amazon reportedly already has high turnover—it is a famously efficient company that asks a lot of its workers—it may seem surprising that it would incentivize workers to walk away. Many employees at Amazon’s warehouses, as I’ve written before, say that they are constantly pressured to work harder and faster (and get fired if they don’t), and that the jobs are physically and psychologically grueling.
When I asked Amazon about these workers’ complaints, the company said that the top priority of its fulfillment centers is the success and well-being of its employees. No worker is ever dismissed without good reason, Robinson told me. And as the company grows, she added, it is “strongly in our interests” to retain existing employees. But that just makes The Offer seem more puzzling. If Amazon wants to retain employees, why would it pay them to leave?
With The Offer, Amazon seems to be making the calculation that weeding out a single unengaged worker is worth as much as multiple thousands of dollars. But there might be other, less obvious effects of providing The Offer that serve to benefit Amazon, according to some behavioral economists. The Offer might in fact be a way to make employees stay longer than they otherwise might.
The reasoning goes like this: Employees resist an initial temptation—to quit Amazon and walk out with cash—and by resisting it, they may actually feel more committed to their jobs, said Ian Ayres, a professor at Yale Law School who wrote about the concept of The Offer in his book Carrots and Sticks: Unlock the Power of Incentives to Get Things Done. Amazon employees who evaluate The Offer and then turn it down have decided they like the company enough to stay a little longer. They then want their future behavior to match that feeling, Ayres said.
Why Amazon Pays Some of Its Workers to Quit
excerpt of article
On Monday, Amazon reportedly began a series of rare layoffs at its headquarters in Seattle, cutting several hundred corporate employees. But this week, something quite different is happening at the company’s warehouses and customer-service centers across the country: Amazon will politely ask its “associates”—full-time and part-time hourly employees—if they’d prefer to quit. And if they do, Amazon will pay them as much as $5,000 for walking out the door.
Officially called “The Offer,” this proposition is, according to Amazon, a way to encourage unhappy employees to move on. “We believe staying somewhere you don’t want to be isn’t healthy for our employees or for the company,” Ashley Robinson, an Amazon spokesperson, wrote to me in an email. The amount full-time employees get offered ranges from $2,000 to $5,000, and depends on how long they have been at the company; if they take the money, they agree to never work for Amazon again. (The idea for all this originated at Zappos, the online shoe retailer that Amazon bought in 2009.)
Considering that Amazon reportedly already has high turnover—it is a famously efficient company that asks a lot of its workers—it may seem surprising that it would incentivize workers to walk away. Many employees at Amazon’s warehouses, as I’ve written before, say that they are constantly pressured to work harder and faster (and get fired if they don’t), and that the jobs are physically and psychologically grueling.
When I asked Amazon about these workers’ complaints, the company said that the top priority of its fulfillment centers is the success and well-being of its employees. No worker is ever dismissed without good reason, Robinson told me. And as the company grows, she added, it is “strongly in our interests” to retain existing employees. But that just makes The Offer seem more puzzling. If Amazon wants to retain employees, why would it pay them to leave?
With The Offer, Amazon seems to be making the calculation that weeding out a single unengaged worker is worth as much as multiple thousands of dollars. But there might be other, less obvious effects of providing The Offer that serve to benefit Amazon, according to some behavioral economists. The Offer might in fact be a way to make employees stay longer than they otherwise might.
The reasoning goes like this: Employees resist an initial temptation—to quit Amazon and walk out with cash—and by resisting it, they may actually feel more committed to their jobs, said Ian Ayres, a professor at Yale Law School who wrote about the concept of The Offer in his book Carrots and Sticks: Unlock the Power of Incentives to Get Things Done. Amazon employees who evaluate The Offer and then turn it down have decided they like the company enough to stay a little longer. They then want their future behavior to match that feeling, Ayres said.
