Pay to Quit: Amazon’s offer to boost Employee Morale

            

Details


Case Code : CLHR036
Period : 2011-2014
Publication date : 2014
Subject : Human Resource Management
Organization : Amazon.com, Inc
Industry : Online retail
Countries : USA
Length : 04 Pages

Pricing


Short Case Study Price: INR 100;

Buy Now


To download this case click on the button below, and select the case from the list of available cases:


Short Case Studies



Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

Amazon.com, Inc, an online retail company, was established in 1994 by Jeff Bezos. The company started with selling books online and then diversified into various products from software to furniture. In a short span of time, Amazon became one of the most successful companies in e-commerce. The company’s success also attracted criticism ranging from business practices and policies to working conditions at its large warehouses. To overcome criticism, Bezos came out with ‘Pay to Quit’ offer where the employees at the fulfillment center were offered US$ 2000 to US$ 5000, based on their experience, to quit. The case discusses the pros and cons of this program, and whether Amazon will benefit from such a policy.

Issues:

The online retail industry.
Working conditions at online retail companies
The pros and cons of the pay to quit policy


Introduction

On April 10, 2014, Jeff Bezos (Bezos), CEO of Amazon.com, Inc (Amazon), one of the leading e-commerce companies in the world, came out with his annual letter for the year 2013, addressed to the company’s shareholders. The letter contained details of the company’s products, services, future plans, innovative and improved delivery system, the use of drones in future for delivery systems, an online grocery, new services, etc. But what caught the eye of shareholders, investors, and industry observers alike was the employee empowerment section, which contained an announcement of a new career choice program. Under this program, Amazon said it would pay 95% of tuition fees for the employees to take up courses of their interest even if the course was not related to a career at the company. The second was a ‘pay to quit’ program whereby Amazon would pay up to US$ 5000 to employees who wanted to quit .

Amazon, an American international electronic commerce company headquartered in Seattle, Washington, USA, had dominated the online retail market since its inception in 1994. It started as an online bookstore, in Bezos’s garage and eventually diversified into products like DVDs, CDs, VHSs, video & MP3 players, software, video games, electronics, jewelry etc. The company was also known for consumer electronics, notably the Amazon Kindle e-book reader and the Kindle Fire Tablet Computer. Amazon was also a major provider of cloud computing services. In the 1990s, Bezos worked as a vice president in Wall Street company D E Shaw, where he came across a report which predicted the internet boom in the next decade. ...

Key words:
Amazon, Pay to quit, online retail, Jeff Bezos, warehouse working conditions, HR policies, Zappos, fulfillment center

Note
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.