AMAZON AS AN EMPLOYER

Riddhi Chakraborty
Section D
IGB
P40201

Situational Analysis
Amazon, the largest e-retail company, which had always managed to keep its work culture
away from scrutiny, was recently exposed by an article in The New York Times. The
company was severely criticized for its treatment of white-collar workers. The workers faced
extreme pressure to perform and constantly push their own limits. The cultural norms in
Amazon include mandatory cut of underperforming labour force or purposeful
Darwinism, a strategy which is extremely costly and leads managers to fire good employees
just to meet quotas. It also effectively puts every employee into constant direct competition
with their colleagues, which fosters an environment of extreme stress. Employees are
encouraged to send feedback about each other, which leads to certain employees ganging up
on a particular employee just to eliminate them. Potential sources of stress like this are called
organizational factors and they include work overload, demanding and insensitive boss
and unpleasant co-workers. Hostile language during meetings and reprimands for leave
during severe illnesses are considered normal. The company workforce is also largely skewed
young and male, there is no female representation in the higher ranks. This can be
exceptionally disappointing for female employees who feel the company manifesto does not
take them into account. Moreover, the company has openly shown bias towards both men and
women seeking to start families as they are thought to spend too much of their productive
energy on them.
The question which arises is why Amazon insists on maintaining such a hostile and stressful
work environment when similar Fortune 500 companies have embraced employee friendly
policies? The answer is probably the excellent track record Amazon has led for the past years,
there is a firm belief that the most productive and useful employees will be committed to their
jobs enough to stay on. There is a strong belief in the company that extreme pressure and
stress enable employees to tune themselves in a manner whereby they are constantly
churning out new ways in which to deliver products to their customers or ways to
shorten delivery time. Their high-turnovers signal to Amazon that they are retaining only
the best employees.

Problem Statement
Is Amazon’s unique model to maximize profits by extracting the most from its employees a
sustainable model and what are the steps that can be taken to improve the situation?

Objectives
1. Reduce turnover since median employment under the company is one year
 2. Create an image of the company so that it can hire the best talent the market has to
offer
3. Increase the job satisfaction of current employees
4. Ensure customers continue to receive the highest level of satisfaction

Alternatives
1. Drastically change the scope, method and objective of employee feedback into
something more positive and constructive.
2. Reorientation of the company’s HR policies that would allow special leaves and
privileges for employees requiring so to meet personal commitments.
3. Make efforts towards increasing workforce diversity such as reconstructuring of the
topmost positions of the ranks to include more women.
4. Remove the concept of mandatory labour cuts in a certain period of time.

Alternative Chosen
All three alternatives are important and inter-linked and need to be eventually brought into
the fold sooner or later. However, the company should start with the first alternative.

Action Plan
Employee feedback about other employees has proven to be very detrimental. There is a
chance that employees will form groups and send negative feedback about one single
employee they dislike or they may team up to give each other glowing reviews. This practice
is extremely detrimental since the person providing feedback is not in a neutral position and
has an incentive to go either extremes. Removing this practice would help to harbor a more
harmonious work area where employees can trust each other. Otherwise, an environment of
paranoia will exist and productive employees may receive a setback due to false reporting.
This practice can be replaced by less severe practices. To start with, employee feedback
should be carefully evaluated to verify their authenticity and incorrect information should be
penalized. Eventually, team-based evaluation process should be adopted. Thereby, a group
of employees will be collectively responsible for action. This will reduce the extreme levels
of competition and will enhance group dynamic and cohesion and foster a less hostile work
environment and reduce the chances of ganging up on a single member.

Contingency Plan
To ensure a sense of job security, Amazon should have a minimum service period of two
years whereby they cannot terminate their employees without very hefty severance fees. This
will be analogous to Amazon’s policy of having very heavy fines on employees who leave
before two years.