Amazon is one of the most influential tech giants on the planet, and its market capitalization is similar to that of Microsoft and Google. It is possible to state that Amazon is arguably the most successful startup of the current era, and it has managed to replace Walmart as the U.S.’s largest retailer. Apart from retailing, Amazon also operates in the spheres of video streaming, eReaders, smart devices, and web hosting (“Working at Amazon,” n.d.). Currently, the company has over 100 million prime members and a market capitalization of approximately $380 billion and employs 560,000 workers from all parts of the world (“What it’s really like,” 2015). Despite its leadership position, Amazon remains fully aware of the competition.
Amazon utilizes a variety of strategies to maintain its status as a performance-driven company which ultimately let it be effective. Bezos’s primary approach involves developing lean Six Sigma–style processes that allow Amazon to offer an excellent-quality customer experience at a low price. (“How Amazon uses six sigma,” n.d.). Data is the driving force of Amazon’s operations, and the company collects metrics concerning employee and consumer behavior. According to the head of finance for Amazon Web Services, Sean Boyle says, “Data creates a lot of clarity around decision-making. Data is incredibly liberating.” (Rigoni & Nelson, 2015). Such words only prove the company’s willingness to pursue a data-based strategy to deliver the best possible performance.
Yet, the question of whether Amazon’s data-driven strategy and decision-making based on it truly help the company provide better options for its clients. The fact that the company has one of the largest market capitalizations clearly demonstrates that Amazon’s performance management is effective. The methods of Jeff Bezos may cause controversy, but it is hard to ignore that his company has a clear performance management objective, always demand the best (“Does your performance,” 2018). Leadership is another important element of Amazon’s performance management philosophy. The company espouses 14 leadership principles, the majority of which concern individuals’ ability to generate and defend their ideas and factors such as development or collaboration (“Leadership principles,” n.d.). As for the assessment of its leaders, the company uses a standard practice. Namely, it utilizes a “stack ranking” process where every employee gets rated against others annually (“How Amazon uses six sigma,” 2018). Thus, workers’ performance is analyzed from their first day on the job; essentially, employees constitute data and get assessed to determine their utility.
Additionally, Amazon utilizes the “Anytime Feedback Tool,” which lets it maintain continuous feedback. In other words, the “Anytime Feedback Tool” constitutes a platform where employees can critique or approve of their colleagues anonymously (“What is continuous feedback,” 2018). As a result, Amazon implements both annual and continuous feedback in order to establish thorough management and control mechanisms. Additionally, Amazon uses a “Performance Improvement Plan,” which lasts 3 months and assists employees in learning their tasks. As for the opinion of employees themselves, some workers claim that the company exploits them and does not respect their rights, while others insist that it strengthens their managerial skills (“Amazon reviews,” n.d.). Amazon also has a considerable turnover despite the fact that the company has one of the most advanced performance management systems in place.
Nevertheless, the company still remains one of the most respectable ones in terms of employment opportunities and attracts thousands of new workers every. Amazon’s approach to performance management has several positive aspects, including clarity of the main objective and constant focus on the aims at hand. Moreover, the company promotes data-driven feedback, which constitutes a reliable performance management tool. Yet, a high turnover and certain negative reviews demonstrate that the company still has substantial problems needing fixing.
References
Amazon reviews. (n.d.). Glassdoor.
Does your performance management process have purpose? These 9 companies do. (2018). Perform Yard.
How Amazon uses six sigma and you can too. (n.d.). Intelligence Node.
How does Amazon do performance management? (2018). Perform Yard.
Leadership principles. (n.d.). Amazon Jobs.
Rigoni, B., & Nelson, A. (2015). What Amazon gets right. Gallup.
What is continuous feedback? Real-world examples from Adobe & Typeform. (2018). Perform Yard.
What it’s really like to work at Amazon in the wake of New York Times exposé. (2015). Glassdoor. Web.
Working at Amazon. (n.d.). Glassdoor. Web.