I recall hearing about that for Zappos, but here the offer is repeated every year. Doesn't that ruin the effect - you know you can get (potentially even more) by quitting in a few months? And if it's only offered at certain times of the year, then there'll be a bunch of people hanging on until the offer comes around again.
You're missing the point that every pretty much every organization has people hanging on because they need the money, this is incentive to get some of those people to move on, not to eliminate the possibility of employees ever hanging on for a little bit more money.
Actually that was the other point (the one made in the article), which I wasn't missing but was simply not commenting on. The post above mine brought up a second point, which is the one I was questioning as the circumstances between Zappos and Amazon seem significantly different.
Well, I suspect there will be people postponing quitting for a few months just so they can cash out with the offer. That's undesirable for Amazon.
But I doubt you'd have people staying in a job they dislike for another year just to get an extra $1k when they do quit. Also you'll have compounded another year of turning down cash to work there so the cognitive dissonance might be even stronger.
There are lots of pragmatic reasons you might want to work at Amazon for a while and then leave for example, someone who's studying and wants to move into some other line of work after graduation. Waiting tables is the stereotypical student support job (partly because of lectures during the day and people preferring to attend restaurants in the evening), but my understanding is that Amazon warehouses run more or less 24-7.
Another way to look at this that doesn't require any cognitive dissonance is that Amazon lets hourly employees accumulate up to 2-3 months of severance pay (I'm not sure how much time that represents because I don't know their hourly rates, but I'm guessing it averages out to something like $12/hour).
I think it's a great program. Besides offering a friendly incentive for unmotivated workers to leave; it improves the confidence of those working there and provides useful transitional assistance to those moving on for career reasons; lower-paid workers often suffer economic disruption even when moving to a better job because they may miss a pay cycle or have to take on new expenses (new work equipment, different clothes, a car or moving to another town), so a cash cushion for such things is a big plus. It's good cheap publicity for Amazon, not to mention they probably retain their ex-employees and their associates as future customers.
If the offer is annual and they add an extra $1000 per year then on average the disgruntled employee has to wait 6 months to quit and get a higher severance, not 1 year. Which means that 1/4 of those employees only have to churn through 3 more months to get an extra $1000, hardly something nobody would do.
The obvious solution to fix this flaw in the system would be to raise the offer daily instead of annually, be approximately $1000/365 =~ $2.74 per day. Or more simply by $20 per week, which comes out to about the same per year ($1040).
I think you misunderstood jordn's comment. When he said "staying in a job they dislike for another year just to get an extra $1k when they do quit." I think he was talking about a hypothetical situation were an employee has been working for Amazon for, say 2 years, and got offered the $2k. They'd be unlikely to wait another full year, just to be able to get $3k when they quit. In other words, if they want to quit, they will do so at the closest offer (e.g. $2k) rather than waiting another year AFTER that offer to get a larger one (e.g. $3k).
Of course it's likely employees would wait e.g. 3 months to get the "quitting bonus". In fact, jordn quite clearly stated that also, in the first line of his comment.
Right, I'm just elaborating and pointing out that this caveat only happens as long as the offer is structured in such a way that you have a massive increase to it at a specified time once a year.
Then if you hate your job and you're close to that specified time it's in your interest to wait, even though the point of the policy is that Amazon would rather that you quit.
If they just increased the offer with more granularity they wouldn't create that conflict of interest. You'd only get more money as a function of the time you stayed on the job, so you might as well quit right away instead of waiting a few months for a much larger payout.
But that defeats the Conginitive Dissonance side of the things. If the offer is available daily (or even weekly), then the employee can just quit the very day (or next week) he feels crappy about his job.
How is it a problem that people who have such a tenuous attachment to their work that they'd quit next week for a bit of cash as soon as they're feeling down do so?
Seems like a great outcome for both the employee and the employer.
It also means that people will quit at a predictable moment, rather than in the middle of the christmas season. I think it is a very clever policy from Amazon at several levels.
> ...then there'll be a bunch of people hanging on until the offer comes around again.
This might be the most important aspect of the program. An employee abruptly putting in his or her notice can cause continuity issues for the business, especially if they don't give them the customary 2 weeks of notice. If $5000 can buy employees leaving at predictable times during the year, the business can take steps to ensure that the employee's job functions are covered. That predictability alone may be worth $5k.
