Would You Pay Employees to Quit?

Posted by cecilwampler under Human Resources
From http://www.peoplemanagementconsulting.com 3659 days ago
Made Hot by: NolanGreen on April 15, 2014 7:13 am

It is quite an interesting question. Which employees would you pay to leave and why? Amazon, Zappos, and Netflix are paying employees to quit. Let's take a look at why.

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Comments

Written by tiroberts
3570 days ago

This is interesting. I suppose it would depend on the terms of the resignation.

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Written by lyceum
3656 days ago

Cecil: You are right about that. That is why I am interested in fundamental ideas, i.e., philosophy. I am subscriber of a rational philosophy called Objectivism. Ayn Rand has described the true nature of the trader principles in her works, e.g., The Fountainhead and Atlas Shrugged.

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Written by lyceum
3657 days ago

Cecil: Thanks for your sharing your thoughts and adding more input to this thread! I would like to talk with your more about organizational leadership. The solution to the issue you are talking about, is to understand and apply the trader principle throughout the organization.

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Written by cecilwampler
3656 days ago

An interesting idea Lyceum. While the trader principle may seem like the answer, it opens so many other problems I could not go in to here. Who decides what's a fair trade? "What you see as fair is not fair to me. I want a better deal for all my hard work." People will always try to get one over on someone else; try to get something undeserved. We're not all this way, but enough are to ruin this type of system. There are so many principles and theories. I have companies that want a 5S program or a six sigma program because they heard GE or some other company did it. I have friends who are black belt ninja six sigma experts, but now it is less popular. The only lasting trend in business is knowing the when and the why for all these things.

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Written by johnfaust
3658 days ago

The principle of one Guru is fire and hire.

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Written by cecilwampler
3657 days ago

Johnfaust,

Fire and hire has a nice ring to it, but it is not without some problems. You would have to have several factors in place in order to operate effectively. It would have to be used sparingly to be financially beneficial. Hire and fire during a 90 day "probation" period would probably be a good idea. Obviously companies can fire who they want, but they also need to have some merit to their actions to protect themselves legally.

Companies have a couple of questions when they start hiring workers. They can hire the best people and pay a premium for them. This is sometimes referred to as hiring eagles. If you need a CFO or CEO, you're going to pay a nice salary and grab the best you can lure to your company. You can also hire good people and train them to be the best. Now you save on salary, but must invest in some training. Regardless of which philosophy you choose, your selection and placement process must be solid. If you're doing a lot of firing, then your problem is you keep hiring the wrong people.

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Written by lyceum
3658 days ago

Cecil: I have been using the Zappos example of getting money for leaving in my social media classes as a prime case for creating a sound business culture. My wild guess is that if you would interview the majority of employees in Sweden, they only get a kick once a month (usually around the 25th) at their work... when they get paid!

How about paying the right people in real money, silver and gold? Give them something tangible that is a true appreciation of values?

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Written by cecilwampler
3657 days ago

Hey Lyceum,

Thanks for the great comment. I think it would be fascinating to make this more of a global question and see how people from various countries may approach such offers to leave their job.

When you mention paying the "right" people, you seem to believe the "wrong" people are often rewarded. This is true in some regard and hits on an important idea I would like to share. Often companies say they have a motto of "people first" or "quality is our first priority", etc. But then those who are cutting quality to increase profits are getting the promotions while those following the company line are left behind. Patty McCord, the person responsible for the Netflix plan outlined in the article, mentions that you can always see the behaviors and attitudes a company finds important by following the money, the promotions, and the rewards. Sometimes a company seems to favor people who we believe are undeserving, but these people are the ones who the company truly see add value. This was an idea I outlined to some degree in the article, A Glimpse into the Management Matrix.

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Written by HeatherStone
3658 days ago

Cecil,

I'm going to ask what, I think, is a fairly obvious question here. But perhaps I'm missing something. I can see the clear benefit of taking another job and taking an extra check as you walk out the door. But since it seems you are, in most cases, talking about disengaged employees in an insecure job market, I'm wondering what incentive they have to take some of these offers instead of simply hanging on until the employer lays them off. Unless I'm mistaken, the offer we're talking wouldn't be as high as unemployment and would be unlikely to last them as long while they seek new employment. It's hardly an ideal situation, and certainly, if they can find another job, quitting with a new paycheck waiting and some money in hand would be the best case scenario. There's also the possibility that some of these employees might have doubts about jumping to a new job where they could also get laid off and in some cases have a worse unemployment situation than they have at your company. I'm sorry to play devil's advocate, and maybe I'm carping about a non-issue here. But I'm just wondering what recourse a company really has if employees are happy simply going through the motions. The payout for getting rid of these employees will almost certainly be higher than if they leave on their own.

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Written by cecilwampler
3658 days ago

Heather,

I think you raise a good point. It is part of the genius of these innovations these companies have created within human resources. All three of the companies mentioned have really different methods and they all make great sense from the side of the company. Working in a busy fulfillment center all year can be mundane and stressful. When you have an annual option to walk out the door with $5,000, you'll probably measure in your mind exactly the things you outlined in your question Heather. The unknown of what's out there, the chance of not finding work, etc. It usually brings you back to the idea that "this place isn't too bad. I'm lucky to have a job right now." This attitude helps the company, it really silences the negative attitude because, hey, "What are you complaining about? You turned down $5,000 to be here. Shut up." If they have people who like going through the motions, then they can't solve their problems with money. They have to deal with it like the rest of us, the hard way. Actually rolling up their sleeves and managing their people, working toward improvements, recording poor performance, etc. The money offer is largely a work culture point the company is making. "If you don't want to be here, please go. If you can do better, please go do it. I'll pay you to go." Most employees will not take the money in any of these companies and will leave the "offer" with a new respect for the company and their job.

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