Mega-online retailer Amazon recently turned some heads when news got out that the company offers thousands of dollars to each fulfillment center workers willing to quit his or her job.
CEO Jeff Bezos recently explained the Amazon’s “Pay to Quit” program in a letter to shareholders:
Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is "Please Don’t Take This Offer." We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.
In the same letter to shareholders, Bezos acknowledges that the idea for Pay to Quit came from the “clever people at Zappos,” which Amazon acquired in 2009.
Zappos, which has heavily relied on its corporate culture to maintain an above-and-beyond level of customer service, was famous for “The Offer.” As described in a popular Harvard Business Review blog post from 2008, the company put new hires through an immersive orientation process and then offered them cash to walk away, with the goal being to weed out those who were actually lukewarm about joining the company.
For small and large companies alike, such a buyout offer can have a number of advantages, experts say. It saves companies money on unemployment insurance, lawsuits over terminations, and disgruntled, unproductive workers. Not to mention that firing or laying off workers is a morale-killer. (On the flip side, some obvious risks also come to mind: Employees already planning to quit could take advantage of the offer, and it could lead to higher-than-expected employee turnover.)
But Jena McGregor at The Washington Post points out that programs such as Pay to Quit have some powerful benefits: “Probably the biggest benefit for a company to adopt the practice is that it shows all employees—especially the really good performers or most dedicated ones—that it's serious about protecting its culture. It doesn't want people around who don't value the place, and it doesn't want people who don't love their jobs. And to prove it, it's willing to put its money behind it.”
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