Another Reason Amazon Is the Coolest

Amazon.com (NASDAQ: AMZN  ) seems to be making so many headlines these days that it's easy to see some of the really neat stories fall through the cracks. After all, we're so mesmerized by order-delivering drones, Fire TV, and refreshed reports of an Amazon smartphone that we sometimes miss the smaller stories that may pay off in even bigger ways. 

After all, aren't grocery store scanners and drop-off lockers for localized Amazon returns pretty cool? However, one of the coolest things about Amazon doesn't involve bar-raising technology at all. Amazon is starting to turn heads with a plan that pays employees to walk away.

In a letter to shareholders on Thursday night, CEO Jeff Bezos offered up details of a plan that Amazon offered to warehouse workers in January, in which they can collect as much as $5,000 to leave the company. 

Now, a "pay to quit" offer may not seem all that unusual. Companies often offer their more tenured employees incentives to quit voluntarily, knowing that they can be replaced with younger and cheaper hires. Some companies facing the grim prospects of having to lay people off dangle carrots so some folks step up before the ax drops.

However, Amazon's new strategy is unique in that it's still hiring and that even relatively new employees can take the money and run. Fresh hires were offered $2,000 to quit, increasing by $1,000 for every year of service until it maxes out at $5,000. The offer -- carrying a "Please Don't Take This Offer" header -- will be repeated every year.

"The goal is to encourage folks to take a moment and think about what they really want," Bezos writes. "In the long run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company."

Encouraging someone to leave may not seem like a sound financial decision, especially since it takes time and money to train a replacement. However, at a time when some retailers are being taken to task for what they're paying, here's Amazon flipping the script by telling them that they can profit from leaving if it's not the right job. It's deflection in a perfectly executed form. 

An Amazon spokesperson tells CNNMoney that less than 10% of those offered the plan in January took the bait. That may seem surprisingly low given the nature of the work at Amazon's distribution centers, but it's a testament to Amazon's ultimate appeal as a place to work.

It's also brilliant to publicize the practice, which Amazon borrowed from its forward-thinking Zappos online shoe-selling subsidiary. After all, there won't be a shortage of folks lining up to work at an Amazon warehouse, possibly with the intention of leaving next January to score a cool $2,000 after the taxing holiday rush. However, it wouldn't be a surprise if many of those opportunists enjoy the job and stick around. Amazon will get to retain the people that truly want to stay there, enhancing the overall satisfaction and quality of its front line. 

Well played, Bezos.

2 stocks changing the retail world
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 14, 2014, at 2:15 PM, strattitarius wrote:

    It has been my experience that an employee with a poor attitude will probably cost you more than $5000. If they have a revengeful attitude, or feel slighted, they WILL cost you more than $5000. Tenure, seniority, and pay grade mean nothing when an employee wants to ruin your day.

    Not only that, but firing an employee rarely results in less than $5000 in expenses. Either in unemployment, or in trying to avoid having to pay unemployment, you will spend that much.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2913338, ~/Articles/ArticleHandler.aspx, 12/22/2014 12:14:18 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement