Why Amazon pays employees $5,000 to quit


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Article courtesy of CNBC via “The Rundown”

Amazon has a solution for employees who no longer want to work there – pay them to quit.

Once a year, the company offers to pay full-time associates at Amazon fulfillment centers up to $5,000 to leave the company. Employees are eligible after one year of service, but there is a caveat: Those who accept the offer can never work at Amazon again.

“We want people working at Amazon who want to be here,” Amazon spokesperson Melanie Etches tells CNBC Make It via email. “In the long-term, staying somewhere you don’t want to be isn’t healthy for our employees or for the company.”

The company offers $2,000 to employees who have been at the company one year, and the offer increases by $1,000 per year of tenure, maxing out at $5,000.

This program, which is called Pay to Quit, was first created by online shoe retailer Zappos, which Amazon bought in 2009. Zappos only extended the offer to its newest employees, within the first few weeks of employment, and the “quitting bonus” was set at $1,000.

Amazon claims that they don’t actually want employees to accept the offer. In fact, the headline on the memo states “Please Don’t Take This Offer,” according to founder and CEO Jeff Bezos.

So why bother presenting it in the first place?

“The goal is to encourage folks to take a moment and think about what they really want,” Bezos writes in a 2014 shareholder letter. And according to Amazon, few people actually accept.

Considering the high costs associated with employee turnover, incentivizing employees to quit may sound like a counter-intuitive business strategy. But according to Michael Burchell, workplace culture expert and author of the book “The Great Workplace: How to Build It, How to Keep It and Why It Matters,” it actually enhances employee engagement and is cost-effective in the long run.