Paid to Quit

I happened to run into an article on CNN Money about a little nugget they read in a letter from Amazon’s CEO, Jeff Bezos. Amazon is announcing publicly that they have a program where they actually pay warehouse employees to quit. Well, sort of.

The plan actually is one that stems from a company Amazon acquired long ago: Zappos. In case that name doesn’t ring a bell, they are an online shoe retailer. And I recall reading years back that they actually had this same “benefit”. They would periodically offer employees a contract to quit for a small bonus. Looks like Amazon has taken that policy and extended it to it’s warehouse employees as well. The thinking is that it helps eliminate people who aren’t really motivated to work anymore. The offer starts at $2000 and is made after a year with the company. Then each year they offer you again bumping it up another $1,000, until a max offer amount of $5,000.

The idea sounds neat to me, and it certainly would make employees take a moment to pause each year and re-evaluate if the job is really worth it. The question becomes how beneficial it is to the employer (Amazon) to make these offers. Presumably they’ve done some studies in-house to confirm that a replacement worker who is more motivated is worth the buyout amount to the previous employee who became demotivated?

The idea isn’t too far-fetched when compared to the traditional buy-outs that companies have offered senior employees to help get rid of their salaries and replace them with younger, cheaper labor. The only wrinkle here is that the motivation for these buyouts presumably isn’t to replace these workers with younger, cheaper versions – but to replace them with fresher, more enthused employees.

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