Jan 29, 2019 in Business

”Pay to Quit” Strategy

Amazon has hit the newsrooms with its program dubbed "Pay to Quit." The essence of the program is that the company intends to pay out its employees to leave the job. Whether the strategy is designed to cut on labor costs or to check the effectiveness of its employee’s pool is unclear. Similar strategies are evident in other US companies including the online retail business Zappos. In the application of the program, Amazon intends to pay every employee willing to leave employment a sum of 2 dollars in breach with the bonus topping out at $5 in the 4th year (Williams, 2014)

The reason for the company to undertake the strategy to pay its employees to quit is explained by the chief executive officer of Amazon, who says that it is a way to eliminate the workers who are not satisfied with their employer. In the process, the company intends to terminate employment with the unproductive workers. Nevertheless, the major goal behind the “Pay to Quit” is a way to manage employee turnover (Williams, 2014)

The CEO perceives the program as a simple exercise completed annually. She states almost defensively that the program is not meant to lose its employees if the company wants them to stay. In fact, Bezos says that the underlying headline pleads to the employees not to take the offer. However, the major question is if the company really wants its workers to stay, why did they introduce the program in the first place? The design of the strategy is without doubt to shed off a part of the workforce. ”Pay to Quit” strategy is an encouragement to leave. It is intended to give the employees an open decision, allow them to analyze their options to stay in the company or leave. Since changing jobs is usually associated with financial stress, it provides an offer to cushion the situation during the job-to-job transition.

Ethical Issues Involved

The school of thought that places the obligation on the company to ensure comfort of its employees argues that the move to provide the offer is not ethical. From the perspective of the perspective, the company has the responsibility to create a comfortable working environment for all its employees. The aforementioned responsibility is being eliminated with the offer. Instead of investing into creating a positive environment to make the employees satisfied on the job, which will increase productivity, the company is motivating workers to leave jobs. The offer is an example of carelessness on the side of the company. It is a manifestation of non-consideration of the employees’ views. Instead of finding out what makes workers satisfied, the company suggests that those who are not satisfied with the prevailing conditions should leave.

However, the company is seen to be considerate to facilitate exit of employees unhappy with their jobs in a more friendly way. Since both stakeholders have a responsibility to create a cooperative environment, an offer of a leave bonus creates a fair ground for both the company and the employee. The employer usually has the power to terminate an employee’s contract at minimal negative consequence by offering a leave package. Thus, the employer shows the consideration to the workers. It creates a possibility to eliminate the financial uncertainty that an employee undergoes from quitting an income job that he or she depended on. The quit bonus provided by the employer safeguards the worker from the economic hardship that would otherwise be associated with immediate termination of a job. Ethical issues of concern in this case are whether it is appropriate to pay the employees to quit. The reasons for ethical issues include the obligation of the employer and the employee on the job.

Stakeholders

The stakeholders involved in the case include Amazon as the employer and the employees. The company places an offer, which the employees decide whether to take or pass.

Alternative Courses of Actions

The paying to quit in the case study of Amazon is seen as a strategy to improve the productivity of the company. The strategy is a way of making sure the company has only the committed and hardworking people. Bezos states that those employees who take the “Pay to Quit” program should not have been hired in the first place. The hypothesis assumes perfect working conditions provided by the employer, which might not be the case. In fact, alternatives exist. Instead of paying off the employees, the company can invest in the strategies to motivate the workers. By introducing the measures to motivate and satisfy the employees, there will be no possibility of having employees who are hired for formality.

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Critically, the practice of paying employees to quit is found to be a risky program. The director of Amazon notes that only a few employees took the offer. However, the assumption is that the case should be opposite. A massive turnover of employees will without a doubt affect any company. The situation of the program put into practice, and a significant number of employees take it, may result to failure. Such a case can lead to the loss of key worker with valuable experiences as well as trigger the tedious exercise of finding new employees. The new workers may not be qualified and may need time to adjust, which would affect the business significantly.

Conclusion

In conclusion, an employee motivation plan, which may come in terms of increased pay, rewards or incentives, can bring results to the employer. Moreover, the motivation plan can keep the experienced employees and encourage them to contribute more to the company. In order to find out the course of the matter, I would suggest the Amazon Company to get the answers as to why it was necessary to introduce “Pay to Quit” program. I would also consult professionals on the effectiveness of the process and the possible ethical implications for the company given the fact that alternatives to the programme exist as discussed in this paper. In this research, I opine that the program does not just affect a certain category of employees (Williams, 2014). Jeff Bezos, the CEO of Amazon, stated that the program was meant to terminate the employees who are dissatisfied. However, the offer is enticing enough to the satisfied employees as well, and could be a chance for them to look at the job from a different perspective and search for alternative places of work.

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