Amazon recently made a new program dubbed “Pay to Quit” in which they will pay $5,000 to weed out dissatisfied or unproductive workers at their fulfillment centers.
According to Los Angeles Times, Chief Executive Jeffrey Bezos outlined details of a rare human resources strategy the online giant Amazon has launched. This was shown in a letter to shareholders this week and details the intricacies of the “Pay to Quit” program by Amazon. It is offered once a year to employees who work at Amazon fulfillment centers. In the first year, the offer is $2,000. After that, it rises $1,000 every year until it maxes out at $5,000. The aim is to weed out Amazon employees who are unsatisfied with their job. The “Pay to Quit” program is a kind of incentive to quit for those who fit the criteria. Bezos best explained it as the following:
“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.”
Interestingly the offer is marketed to its employees under a headline that reads: “Please don’t take this offer.” The human resource strategy is progressive enough that other companies have employed it for their workforce, most notably Zappos (a company Bezos acknowledged in the letter). Amazon, which is based in Las Vegas, is often a case study for human resource experts. They emphasize happiness and weirdness as key workplace culture traits.
Netflix Inc. is another company that offers a quit bonus. This is used so that “adequate performance gets a generous severance package.” Summarized, Netflix would rather have less-than-stellar employees leave with money in their pockets and to fill their open positions with willing people.
This is actually a very smart human resource plan utilized by many companies because a recent study, by the Gallup, found that 70% of workers are not engaged in their positions or are simply going through the motions to make it through. Collectively, these employees with mundane existences cost the U.S. economy $450 billion to $550 billion a year in lost productivity.
Unfortunately, the companies that seem to utilize this strategy are data-driven meaning they’ve crunched numbers and estimated what they can do to benefit both parties in this “Pay to Quit” program. Small businesses and companies based off of contractual performance may not be so willing.
But in the end, it is like how ABC News reported in the beginning of their report: Who said it doesn’t pay to be a quitter?