This essay analyzes the HR strategy of Amazon. It’s focused on Amazon HR strategy practices and issues associated with them. It also studies aspects of Amazon human resources strategy, such as recruitment and retention rates.
Introduction
Being one of the largest and most successful companies in the world, Amazon.com constantly attracts the attention of potential employees, business partners, and competitors. However, while the organization may seem like a successful business, not all Amazon human resource management practices are effective or popular with employees. Notably, many applicants and employees do not accept Amazon HR strategy in recruiting and retaining workers as positive.
Amazon HR Strategy Approaches
Any company’s HR strategy, be it positive or negative, inevitably profoundly affects its employees. Depending on HR tactics, organizations can either motivate or demotivate their workers, gain their loyalty and sustain it, or discourage people from being dedicated to their employer’s success. Amazon is one of the companies implementing innovative approaches in their HR strategic choices. One of the most unusual options Amazon recently suggested to its employees is the so-called ‘offer’ (Chalmers, 2018). According to this strategy, the company suggests that those employees who do not wish to continue working for it to quit and receive a payout. The amount of this sum depends on the number of years spent by a person working for Amazon. This HR strategy was initially employed by one of Amazon’s subsidiaries, Zappos (Chalmers, 2018). At first, the option was available only for newly hired people who had spent only a few weeks with the organization. However, it changed and turned out to be a continuous strategy.
Workers who have been employed for at least twelve months are asked once per year whether they would like to quit and receive a payout calculated according to their experience. This offer sounds like a rather promising option, but there is one dilemma that each employee has to solve prior to answering the question. A single condition of the deal is that if a person chooses to take the money and leave, he or she will never be able to obtain employment with Amazon again (Chalmers, 2018). Therefore, each worker must weigh all the pros and cons of their options and select the one that will be most beneficial. By using this HR strategy, Amazon.com makes it possible to gain beneficial outcomes for both sides. Evidently, employees who opt for payout lack dedication, so parting with them is not a loss for the company. Therefore, even though Amazon experiences short-time financial disadvantages, the company expects to be composed only of the most loyal employees in the long run.
Another critical strategy is aimed at enhancing the results of underperforming employees. A retraining program titled Pivot was created for those workers whose performance is below a satisfactory level (Howland, 2017). Thus, instead of having to leave work, people will get an opportunity to receive additional training and remain with the company. Pivot suggests options absent in the company’s previous performance improvement plan, including being consulted by a career ambassador. This professional is responsible for giving the workers support and guidance during complicated stages of employment.
However, despite innovations, the HR strategy of Amazon.com is not generally accepted as successful. The major problem is that the company lacks employee diversity regarding race and gender. As of 2018, 58.3% of Amazon’s employees globally were male, and 41.7% were female (“Our workforce data,” n.d.). Furthermore, the managerial potential was divided even less equally: 73.2% of men and 26.8% of women. Race and ethnicity data were not promising either: 61.7% of Amazon’s workers in 2018 were white (“Our workforce data,” n.d.). These statistics indicate that the company needs to improve its diversity endeavors.
Meanwhile, currently, Amazon.com offers many perks and bonuses to improve its HR initiatives. These benefits include healthcare plans, financial security, a support network, maternity, and paternal leave, paid time off, and employee discounts (Pratap, 2019). A recent innovation is the career choice program, allowing hourly employees to develop their skills in various settings and prepay 95% of their tuition costs (Pratap, 2019). Thus, if Amazon continues developing promotional programs and eliminates its negative HR practices, it will likely increase its employees’ loyalty and interest in work.
Amazon Human Resource Management Analysis: Retention Rates
Vivid discussions of Amazon’s poor retention strategy started in 2015 after the publication of Kantor and Streitfeld’s (2015) article in “New York Times.” The authors offer an overview of the company’s least favorable HR strategic initiatives. Moreover, Kantor and Streitfeld (2015) share the information obtained from interviews with Amazon’s former employees, which helps to gain insight into a significant retention problem in such a successful business. Specifically, poor retention is associated with exorbitantly harsh conditions in the company. As Kantor and Streitfeld (2015) note, Amazon is conducting an “experiment in how far it can push white-collar workers, redrawing the boundaries of what is acceptable” (para. 5). The company’s top recruiter, Susan Harker, reports that Amazon strives to do “groundbreaking things,” and conditions are too challenging for some employees (Kantor & Streitfeld, 2015, para. 6). However, insider opinions of the HR strategies favored in Amazon’s offices are quite different from the official ones.
Former employees remark that most of their coworkers could be noticed frequently crying under the pressure of their managers’ demands. While the organization is highly popular with customers, the conditions in which millions of people work to satisfy clients’ needs are frequently unbearable (Kantor & Streitfeld, 2015). At the same time, however, employees admit that they have surpassed their expectations due to Amazon’s continuously pushing policies. Thus, it is impossible to say that retention rates depend solely on poor HR strategies. After all, as Heskett (2015) remarks, there is no guarantee of a company’s success, irrespective of low or high retention rates. Probably, Amazon needs to cultivate employee loyalty and endurance at the early stages of employment so that only the most dedicated workers remain with it. Another solution is not to focus on the retention rate and let the quality of work speak for itself.
Amazon Human Resource Management: Recruitment Policies
Finally, when analyzing the company’s HR strategies, it is essential to discuss its recruitment procedures. The least attractive issue has been mentioned in one of the previous sections, and it refers to the lack of racial and gender diversity in Amazon (“Our workforce data,” n.d.). Thus, many people lack the opportunity to obtain a position in Amazon merely because they do not belong to the population groups favored by recruitment specialists. However, there are hiring policies that can help underrepresented populations to receive a job if they outperform others. The company treats this process with utmost responsibility. It considers it better to interview many people and end up hiring none than hiring “the wrong person” (Petrone, 2014, para. 1). The “every-nook-and-cranny” process of selecting new employees at Amazon is rather rigorous (Petrone, 2014, para. 2). The organization’s founder and CEO, Jeff Bezos, views the demanding approach to hiring as the most prominent constituent of Amazon’s success.
The recruitment process involves a variety of stages and interviews. About 75% of Amazon’s employees are warehouse workers, whose hiring process is more streamlined than that of office workers (Petrone, 2014). For the latter, the hiring process incorporates prolonged interviews of different types: phone, in-person, technical, and others (“What’s it like,” 2018). Depending on the position one tries to receive, the applicant will communicate with two to seven Amazon managers, team members, and stakeholders. Recruiters may be asked to discuss their past failures and pass a writing text (“What’s it like,” 2018).
Additionally, the so-called “bar raisers” are involved in hiring. These employees most likely represent the opposite team and must evaluate whether the candidates’ skills correspond to the desired position (“What’s it like,” 2018). Hence, Amazon’s recruitment policies are rather harsh, but their ultimate goal is to eliminate the possibility of adding unsuitable people to the team.
Conclusion
Amazon.com is one of the most successful corporations whose customer-friendly policies are well known worldwide. However, the process of hiring people, as well as some HR strategies for the already employed individuals, is not void of disadvantages. To increase its retention rate, Amazon should review its current recruitment policies and change its employee treatment. Despite numerous benefits, the company lacks employee loyalty and is frequently viewed by insiders and outsiders as too harsh on its employees.
References
Chalmers, K. (2018). The future of HR: 4 unusual HR strategies from innovative companies. Web.
Heskett, J. (2015). What’s wrong with Amazon’s low-retention HR strategy? Web.
Howland, D. (2017). Amazon revamps HR strategies to aid underperforming employees. Web.
Kantor, J., & Streitfeld, D. (2015). Inside Amazon: Wrestling big ideas in a bruising workplace. New York Times.
Our workforce data. (n.d.).
Petrone, P. (2014). How Amazon hires: No mistakes allowed. Web.
Pratap, A. (2019). HR management at Amazon: Need for employee satisfaction.