Once a year, Amazon provided the ‘Pay to Quit’ option in an effort to retain passionate and committed employees.
Known for his unconventional leadership approaches, Jeff Bezos launched an innovative program at Amazon in 2014 to keep dedicated employees who wished to advance their careers at the internet giant. The billionaire promised workers up to $5,000, or roughly Rs 4.1 lakh, in exchange for leaving the firm. The ‘Pay to Quit’ reward was introduced to guarantee that they had a committed and motivated team.
“In our letter to shareholders, we offer to pay our associates to quit once a year,” Bezos stated. “The offer is given for $2,000 in the first year. After that, it increases by $1,000 annually until it hits $5,000. “Please Don’t Take This Offer” is the headline of the offer. We want them to stay, so we hope they decline the offer.”
However, the founder of Amazon explained his decision to present the temptation, saying, “The idea is to get people to stop and consider what they really want.” An employee who stays somewhere they don’t want to be is ultimately bad for both the firm and the individual.”
Before Jeff Bezos adopted the concept, Zappos, an online retailer with headquarters in Los Angeles, first presented it. The “offer” was often offered once a year to help staff members prepare for the slowdown that followed peak times like the Christmas holidays.
According to behavioral economist Uri Gneezy, the tactic is “remarkably effective.” “In many organizations, dissatisfied employees have no reason to disclose their true sentiments, but you can incentivize them to do so by offering them money to resign, making it costly for them to be dishonest,” he said in the Harvard Business Review.
Of course, one result of this method is that those that stick around are more driven. However, he added, turning down an offer means that the person is investing in their future with the organization. “But an added benefit is that those who stay feel the need to justify that decision to themselves — which they typically do by working harder toward longer-term objectives,” he said. “This boosts their productivity and commitment.”
However, the internet giant discontinued the program last year due to labor shortages amid the worldwide e-commerce rise prompted by the Covid pandemic, and it is currently only available to graduates of its Career Choice upskilling program. The ‘Pay to Quit’ offer is open “to graduates of Career Choice to support their transition to a new career should they choose to leverage their new certifications,” according to Amazon official Karen Riley Sawyer in an interview with The Information.