Would you pay your own employees to quit?
Amazon CEO Jeff Bezos's move to do just that is getting a lot of attention, with coverage of the unusual human resources practice showing up everywhere from the Post to Time to USA Today last week after it was shared in his annual letter to shareholders. (Disclosure: Bezos is the owner of The Washington Post.)
It's gotten so much attention in part because the practice is indeed pretty rare. Zappos, which Amazon acquired in 2009, has long made what it calls "The Offer" to its employees, saying to new workers that the company will pay them $2,000 to leave if they're not interested in staying. But while some companies may have adopted the practice since, Zappos CEO Tony Hsieh's unusual management approach was so novel that when the Harvard Business Review wrote about it back in 2008, it quickly became one of the most popular posts on the site. (The Zappos offer started at just $100 but has risen over the years; Amazon offers its fulfillment center employees $2,000 the first year the offer is made and raises the offer by $1,000 each year until it reaches $5,000.)
But it shouldn't be so progressive or extraordinary when you stop and think about it. The most basic reason is also the most obvious one. As Bezos wrote in his shareholder letter, "the goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company." The idea, in a sense, is to bribe people who don't love working there, don't feel they're a fit for the culture, or don't really like what they're doing with money to head for the exits. (An e-mail to Amazon to confirm details of the program was not immediately answered.)
Five thousand dollars here and there, after all, isn't that much when compared with what disengaged people can cost a company's bottom line. Gallup has shown that companies that have 9.3 "engaged" employees (those who are emotionally connected with their jobs and willing to go above and beyond) for every one "disengaged" employee saw 147 percent higher earnings per share on average in 2011-2012 when compared with their competitors. Meanwhile, employers with just 2.6 happy workers for every unhappy one saw earnings per share that was 2 percent lower than their competitors. Gallup estimates that "active disengagement" costs the United States $450 billion to $550 billion each year.
But that's not the only reason the idea is something more companies should adopt. For one, it has the potential to improve hiring upfront. If managers have to budget for a $5,000 quitting bonus for employees who don't stick around for the long haul, they might be more careful about truly hiring for fit rather than simply for a warm body. That's particularly the case for high-growth companies such as Zappos or Amazon that are experiencing very rapid expansion.
At the same time, it could also save companies both risk and cost later on. Employers could potentially pay more than $2,000 or $5,000 in severance if they decided to lay off those disengaged workers in the future, rather than motivating them to leave of their own accord. They also risk fewer termination-related lawsuits if more of their workers choose to leave on their own.
And that's just the tangible costs. If more disengaged folks are leaving on their own accord, rather than having to be pushed out in layoffs, there's less risk to employee morale. Layoffs are spirit-crushing events in any organization, even when they seem fair to the survivors and the good performers who are left behind. Avoiding more of them by encouraging the less devoted to leave earlier could take some of that risk away.
But probably the biggest benefit for a company to adopt the practice is that it shows all employees -- especially the really good performers or most dedicated ones -- that it's serious about protecting its culture. It doesn't want people around who don't value the place, and it doesn't want people who don't love their jobs. And to prove it, it's willing to put its money behind it.