Paying new employees to quit sounds counter-intuitive but it could the key to high-performance organization.
In “Why Zappos Pays New Employees to Quit – And You Should Too,” Bill Taylor explains…
When Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period.
After a week or so in this immersive experience, though, it’s time for what Zappos calls “The Offer.” The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” Zappos actually bribes its new employees to quit!
Taylor doesn’t explicitly use the phrase but, by paying new employees to quit, Zappos is using culture to align execution with strategy.
Hiring candidates is extraordinarily difficult — the so-called war for talent. It does seem counter-intuitive to essentially bribe a new employee to quit so soon after hiring them. But, in Zappos’ case, it’s consistent with their strategy.
Zappos is obsessed with excellent customer support and recognizes that well-trained and motivated employees are the key to delivering this excellence to customers. (If Zappos used the Balanced Scorecard, I would imagine the Customer and Employee perspective would be disproportionately weighted.) Any employee who isn’t willing to embrace this a focus on excellent customer support will eventually detract from the company success. It’s better to weed these employees out early on.
As Zappos gets larger and more successful, some employees might be willing to stick around – even if they don’t completely buy into the approach. For that reason, Zappos has upped the offer as time has gone on, from $100 to $500 to the current $1000. Increasing the offers is a sign senior management actually believes in their strategy. They could easily justify $5000 or likely more.
A reminder for all of us: the best business performance starts with the best people.