Amazon’s “Pay to Quit”

image provided by technorati.con
image provided by technorati.com

Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000.

 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.

My opinion: I think this is a pretty neat program and Bezos is right about unhappy workers not being healthy for the company. In economics there is a concept called ‘compensatory wages’ where an employer will pay employees higher than market wages.  This in essence makes employees work harder to keep their jobs because other jobs don’t pay as well, and employers don’t have to hire more managers to oversee their workers.

Bezos’ concept is similar to this because it is also a self-management scheme.  If you don’t like your job than you might not work very hard at it.  So if Bezos can pay you to quit at a cheaper rate than hiring more managers to recognize poor work and subsequently fire shirkers, then he is saving his company money — while also looking like a benevolent employer at the same time.

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