Recently a much publicised New York Times expose’ on Amazon’s work practises highlighted that it undertakes an annual culling of underperforming employees known within the company as “purposeful Darwinism”. The practice involves reviewing the performance of all employees over the year and then letting the lowest performers go. Is this poor treatment of employees or good management practice?
Much public debate ensued about the accuracy of the HR practises outlined in the article. Amazon’s founder Jeff Bezos felt the need to respond with an email to the “Amazonians”, as Amazon staff are referred to, stating that if the company operated as portrayed in the article it would not be a place he himself would want to work. However the process of “purposeful Darwinism” was not disputed and in fact was confirmed by HR managers in the article.
There is no denying that Amazon is one of the world’s highest performing companies. In its relatively short existence (having started operations in 1994) it has become the world’s largest retailer. To achieve this level of success in such a short time is the result of an extremely disciplined management, a high performance culture and employing a team of passionate and driven people who individually and collectively are the best of the best. Bezos makes no apologies about the high performance culture he has created which drives his employees to succeed beyond even their own expectations.
Although Amazon’s recruitment processes appear to be very comprehensive and detailed, senior HR managers at the company readily admit that they don’t always get it right. Given that they are on target to employ a workforce of over 50,000 by 2016, it is not surprising that not everyone they bring in fits the high performance culture.
The difference between Amazon and many other companies is that it actively ranks the performance of all of its employees on an annual basis and then terminates the employment of the low performers. For many readers this approach to performance management may seem harsh and callous, however in reality it may be the best thing for both parties. A good way to outline the logic behind this argument is to relate it to your favourite sports team.
Everyone loves a winner and of course wants their team to keep winning each season. But we all know that historically this is unlikely. The losing teams will be driven by its fans and management to make changes to the players and coaching staff to position themselves for greater success in the next season. Therefore the intensity of the competition of each team continues to grow season upon season. Which means the winning team will need to also make changes to enable it to stay at the front of the pack.
When reviewing the players list it will be evident that some players have lost their edge, some may have just not been a good fit with the team, while others may just not be ready for the big league and then there are those who will choose to move on, on their own accord. Regardless of the reasons you, as the avid supporter of the team, expect that these changes will be made to keep your team winning.
Now apply the same logic to Amazon. Yes it’s definitely way out in front in regards to its performance, however there is also no lack of contenders ready to try and take its crown. In this digital world the need to be at the forefront of innovation and customer service is relentless, to even stay in business. Amazon needs to keep pushing the boundaries, introduce new passion and ideas and challenge their staff to deliver the future now.
To achieve this, Amazon culls their staff. Now remember this is already an incredibly high performing group of people, inevitably, then great people will be let go. The reasons these people didn’t measure up could include under performance, poor cultural fit or just that there were people who performed better, or contributed more than they did. Regardless, they were deemed by management to be the lowest performers within the organisation.
Admittedly being fired is an emotional event. It challenges a person’s self-worth and confidence because in effect, you are being told you are not good enough or that you’re not wanted anymore. This is a hard thing for anyone to digest. However, as harsh as it appears at the time, quite often it is the equally the best thing that could have happened to the employee. No one wants to feel that they don’t belong, or unwanted, it’s humiliating and demeaning.
Is having the courage to say to the person that it is not working and we are looking for something different, a sign of a mature management? Instead of avoiding the tough calls, managers are required to undertake the culling annually to ensure people who don’t fit are released to find a place where they are better suited. This may sound a bit like spiritual speak, but as humans we often will put up with a bad situation rather than be proactive and make the necessary changes.
It is highly likely these people knew they weren’t meeting management’s expectations. Chances are they were either hoping no one would notice, or kept trying to improve but failed. Or, even worse became highly stressed as a result of the consistent bad feedback. By not forcing a change, management could leave the person in limbo and not force positive changes in their employees lives. Traumatic events often encourage people to reassess their priorities and what they want to be doing in the future.
Another flow on implication of retaining people who are not performing at the same level as the rest of the team, is that the team knows who the underperformers are. This could lead to growing resentment, or even worse unconscious adjustment of their own performance downwards, with the logic ‘Why should I go the extra mile when they don’t, and management does nothing about it?’
So perhaps Amazon’s hard line on performance actually benefits both the company and the employees, and maybe it is the tough love approach that allows both parties to continue to grow and succeed – albeit on different paths.
Of course this conclusion is based on a ‘no surprises’ approach being undertaken throughout the year prior to ‘culling season’.
- The company clearly sets out what is expected of each employee
- The company values are embedded across the organisation
- People are treated with respect and integrity at all times
- Underperformance is identified early on and performance improvement strategies are discussed and implemented
- Employees are given regular feedback about their performance
- Performance management is undertaken objectively and not subjectively
What are your thoughts, is Amazon right or wrong?
© Gary Waldon and garywaldon.com 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Gary Waldon and garywaldon.com with appropriate and specific direction to the original content.
Gary is a Director of TalkCommunications.com.au, an innovator, a speaker and a successful executive known for delivering simple solutions to solve complex problems.