What? Did she just say that?
If that was your reaction, this is not my idea. This is a new HR Strategy that Amazon has announced it is trying. Amazon is trying to weed out employees who are not engaged. In order to get rid of these unengaged, underachievers, Amazon will pay up to $5,000 for them to quit. The Los Angeles Times has the full article for details, but this is a plan that has already been adopted by Zappos and Netflix.
It’s an interesting strategy to say the least. Yes, unengaged employees tend to be less productive and can also divert management resources away from more motivated employees. Yes, an employee who quits is not eligible for unemployment. Yes, unhappy employees breed other unhappy employees creating massive morale problems in the workplace.
However, as most people will tell you the cost of training new employees is not insignificant. Studies about the true cost of employee turnover are a bit all over the map but according to a recent article published by Zane Benefits, a rough estimate of the cost of replacing one employee is 6-9 months of that employees’ salary. The question is whether the cost/benefit analysis comes out in favor of a pay to quit program like Amazon’s.
As an employment attorney, I can’t help but think that a lot of these “unengaged” employees may very well believe their lack of motivation is not their own problem, but rather was caused by the company or some people at the company. For employers considering similar pay to quit programs, thought should be put into obtaining a release of all claims in exchange for the payment. There is nothing worse than paying a problem employee only to have that very same money used to partially fund a lawsuit against the former employer.
We’d love to hear your reactions to Amazon’s new policy.