Management Assignment: Case Analysis of “Amazon As An Employer”
Task: Amazon As An Employer
Amazon was the biggest Internet-based retailer in the United States and had frequently been featured in Fortune magazine’s Elite List of the World’s Most Admired Companies, ranking second in 2014 and fourth in 2015.2 However, in 2015, controversy erupted on social media when an article in The New York Times portrayed Amazon as a company that was “conducting an experiment in how far it [could] push white-collar workers to get them to achieve its ever-expanding ambitions.”3 Many leading technology wizards, such as former Twitter chief executive officer (CEO) Dick Costolo, as well as venture capitalists Marc Andreessen and Keith Rabois, dismissed the criticism, arguing that such practices were part of what made “disruptive companies disruptive.”
The New York Times article focused on the unconventional office culture promoted at Amazon. Particular attention was paid to the practice of encouraging employees to be ruthlessly critical of each other’s ideas in meetings and to surreptitiously send feedback to each other’s bosses.5 The article also mentioned the physical stress of Amazon’s workplace. Employees were expected to put in long hours and were reprimanded when they failed to respond to emails that arrived at midnight. This was the inevitable byproduct of a policy that demanded that all employees work overtime, effectively forcing employees to work harder and faster until they quit, collapsed, or were terminated.
As a result of its workplace policies, turnover at Amazon was high: most employees did not stay for more than a few months. Nonetheless, Amazon had climbed the ladder of achievements and accomplishments in an unrelenting, expeditious manner. It had surpassed Walmart as the most highly ranked retailer in terms of market valuation.8 The company was as continuously innovative as a new start-up.
Amazon was on the verge of opening several new multi-floor offices in diverse locations, which would expand its operating capacity to approximately 50,000 employees.10 The question that arose at this critical juncture of its growth was whether Amazon would be able to attract and retain the engaged talent it required to fill these vacancies despite The New York Times exposé. Would Amazon’s demanding corporate culture continue to lead to innovation
Workplace Conundrums At Amazon
Amazon had always maintained a strict emphasis on customer satisfaction. The business was built around this principle.11 Customers around the world were familiar with Amazon, but life inside the organization had been impenetrable until it was probed by The New York Times article. In a letter to shareholders, Amazon CEO Jeff Bezos wrote, “You can work long, hard, or smart, but at Amazon.com, you can’t choose two out of three.” In late 1999, when the Internet boom took a precipitous fall after years of exhilarating success, Amazon was burdened with debt and spiralling losses. Bezos needed to convince Wall Street that he was determined to cut costs. But what costs were left to cut Unlike other competing firms in Silicon Valley, the company had never provided perks and benefits to its employees. The only “perk” Amazon had offered was free Aspirin, and this was taken away.
Many considered the frequent temper tantrums of Bezos to be key to the survival and success of Amazon. Employees described Bezos’ outbursts as “nutters.”14 His favourite quips were, “Why are you ruining my life” and, “If I hear that again, I am going to have to kill myself.”15 In spite of his infamous temper, Bezos was ranked as the top innovator in 2013.
When The New York Times published its article, Bezos immediately sent out a company-wide memo in which he expressed his disagreement with the article’s portrayal of the company work environment. Bezos noted that anyone working in such an environment would be crazy to stay, and he ended his memo by saying, “hopefully you don’t recognize the company described [in The New York Times article]. Hopefully you’re having fun working with a bunch of brilliant teammates, helping invent the future, and laughing along the way.”
Indeed, “work hard, have fun, and create history” seemed to be the motto of employees at Amazon.18 Over-achievers bubbling with innovative ideas and eager to collaborate with and learn from brilliant co-workers thrived in the challenging, fast-paced environment and seemed to embrace the extreme demands placed upon them — not as a problem to run from, but as an opportunity to grow.19 Many such employees were excited to be working on cutting-edge projects that would impact millions of people and felt that working at Amazon advanced their careers.20 The star performers or winners would visualize the innovations, implement them for a quarter billion customers, and accumulate wealth from rising stock prices.
Amazon’s unconventional style extended beyond its office culture and into its business development processes. Software developers were required to write an imaginary press release and complete a list of frequently asked questions for an envisioned product before they began programming it. This strategy of working backwards from a vision of the finished product forced the developers to detect and confront any difficult post-production issues before moving ahead with the product. This ensured that the developers understood the product’s unique proposition and appeal to potential clients from the very beginning of the development process. If the developers could not write a convincing press release, then the product was discarded as not worth the effort. Many employees found this rigorous approach to software development exciting and argued that such rigour made Amazon the best place to work for those who were passionate about their profession. However, such employees were a small minority. In 2013, Amazon had the second-highest turnover among the Fortune 500 companies, with a median tenure of one year.
The office culture cultivated at Amazon led those outside of the company to think negatively of Amazon’s ex-employees. Many recruiters were hesitant to hire ex-employees, believing they had been trained to be aggressive. Amazon employees were also known to be belligerent and work-fixated. A Seattle-based technology recruiter who had worked at Amazon for four years said that he was still struggling with the workaholic nature from within and trying to control the urge to verbally eviscerate any colleagues who did not perform up to his expectations. People Management Practices And Diversity
The talent acquisition process at Amazon was rigorous and included screening by the company’s star performers and part-time interviewers brought on to ensure the company hired only the best. New employees had to sign a contract that required them to repay the signing bonus in the event that they left the organization within a year of signing and to repay part of their relocation expenses in the event that they left before the completion of two years.
Performance management at Amazon continued to be based on a bell curve approach when other companies were moving away from it.25 Every year, a company-level review was conducted in which managers discussed their subordinates’ rankings. Managers came to such meetings armed with documents and evidence to defend their key members and to incriminate the employees of competing groups. To protect critical talent, managers chose team members who could be sacrificed in the review process. Employees were encouraged to criticize their colleagues by sending feedback to management using a confidential online feedback tool. Because employees were constantly under scrutiny, and bottom performers were unceremoniously thrown out, everyone tried to outperform or sabotage everyone else. Indeed, many employees reported in their performance reviews that they felt sabotaged by their colleagues’ negative comments.
Amazon did not have female employees in the top leadership team. Many attributed this gap to Amazon’s system of competition and elimination. Many female employees believed that some of Amazon’s “leadership principles worked to their disadvantage”; for example, being encouraged to “earn trust,” “have backbone,” and “disagree” with colleagues was seen as difficult for female employees to practice in the workplace.27 Many key employees at Amazon were told that raising children could hinder their chances of advancing their careers because child-rearing would prevent employees from putting in long working hours. Despite working full-time, one female employee was criticized by her boss because the employee’s colleagues often saw her leaving early, not realizing that she was also coming in early to complete the required hours. Another female employee who, for years, had consistently exceeded expectations was criticized by her boss when she began taking time off to care for her critically ill father. This employee mentioned that those who were unable to give their “absolute all” and put in 80-hour workweeks were perceived as weak.
Some male employees also had to quit Amazon — or consider quitting — because the workplace pressure was forcing them to spend less time with their families. Older employees were worried that they would be replaced by younger employees with fewer commitments and more time to focus on work.
Dick Finnegan, a consultant specialized in talent retention, cautioned organizations about the cost of mandatory cuts in the workforce:
If you can build an organization with zero deadwoods, why wouldn’t you do it But I don’t know how sustainable it is. You would have to have a never-ending two-mile line around the block of very qualified people who want to work for you.
Amazon Workplace: Future Direction
In 2014, Harvard Business Review ranked Bezos as the top CEO. Yet, just 12 months later, his ranking fell to the 87th position32 largely because, in 2015, CEOs were evaluated not just on the basis of their financial success but also on the basis of their performance with respect to social responsibility criteria. However, with topline growth and controlled spending, Amazon stock prices had more than doubled.
In response to The New York Times article, Bezos sent the following message to Amazon employees:
The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate [them] to HR. You can also email me directly at email@example.com. Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero.
Given its work culture, would Amazon continue to be a competitive employer and offer an attractive employee value proposition Did the strategy of keeping employees on the edge always result in innovation
Management Assignment Instructions:Your tasks are to analyse the above case under the following:
Does the people management strategy of care and compassion make business sense How does the practice of keeping employees on the edge impact business in the short and long run
Is Amazon’s employer brand as reported by The New York Times sustainable Why or why not
Are employees thriving under Amazon’s workplace policies, or are they just barely surviving
The following management assignment is focused on analysing the brand value of Amazon as an employer. In the study, the case study of Amazon.com published by the New York Times will be evaluated to identify the care and compassion of the company for its employees. The study will also justify the sustainability of Amazon as an employer brand. Therefore, the situation of Amazon's employees will be reviewed.
People management strategy of care and compassion in making business sense The focus of the corporations in society is not only gaining profit but also inducing a change in the lives of people in and with the entities. An organisation simply wants sustainability income, but it is not a single target. Besides, Shareholders target benefit from business, but they also expect more than that (Lee, 2018). As a stakeholder of Amazon Inc., looking at the company beyond the lens of shareholders makes a lot of sense for making business (Case study). The corporation can, in personal understanding, enhance efficiency and staff retention through people management. In critical prices and unnecessarycosts, management should stop using paranoia and envy as management methods. In order to build a stronger market context, companies need to be valuable to customers and stakeholders.Managers also wrongly believe that it would improve efficiency by placing pressure on workers (Seppala, 2013). It increases nothing but stress, and researchers have found that elevated stress levels bear a variety of costs on both employers and staff.
Stress brings high turnover and health care costs. Health insurance costs for workers with high levels of stress were 46 per cent higherthan in comparable organisations without high levels of stress, found in a survey of employees from diverse companies (Seppala, 2013). In fact, in retrospective (observing previous patterns) and prospective (predicting potential patterns) trials, occupational stress has been related to coronary heart disease (Hamilton and Cain, 2019). And there is the attrition effect: 52 per cent of workers say that tension in the workplace has driven them to search for a new career, reject a promotion, or leave a job-role.
In today’s creative and hyper-competitive market setting, caring and kindness are also important because they build the trust of employees and consumers. By focusing on its worries, key points, and wishes, Amazon has a sure way to attract and retain its workforces. Care and compassion would make the salespeople at Amazon intimately recognise the needs of their clients so that clients can go home happy getting super service (Case study). The business gets more recommendations from happy consumers for this reason. In the whole company, the philosophy of caring and concern can be animated so that clients are turned into super fans.
Care and concern also assist the organisation to boost its profits. If the organisation communicates with its clients well, it can know what the consumer needs and how to satisfy these criteria (Seppala, 2013). Fulfilling these criteria will make the organisation creative. The best resource for the advancement of emerging technologies is the workers who communicate directly with consumers. In comparison to Amazon, because of caring and kindness, Google has gained enormous popularity. Since barely three decades after the business was launched, generosity, equality, interest, and emotional wisdom for consumers have made Google a profitable business.
Practice of keeping employees on the edge in impacting business in the short and long run
In terms of profitability, the world's largest businesses not only lead, but also they are turnedinto most empathetic businesses. Studies have shown that the mindset of caring and concern is now more important than ever to the sustainability of the organisation. Perhaps, due to the mindset generated in the people by the New York Times post, Amazon's CEO fell in rank (Case study). A UK company's 2016 Empathy Index survey notes that firms that had a positive mindset and care for their staff and clients had a stronger market benefit than firms that kept workers and clients on the brink.
Amazon’s concept of conceiving was never to win, but to maintain the worldwide business. It's a narrow-minded idea to be the top-ranked company when everyone expects the business to be sustainable. The variation in determining the performance of the company varies from setting up a market share to making more gains. No one has a holistic concept of achievement in history, and it certainly will never be. For example, if researcher about firms that have succeeded in holding workers on the edge from the last decade, it can be seen that the success in the next decade will be the same (Herbert, 2016). These industries are on the brink of bankruptcy because workers are not equipped to thrive in workplaces like that. For a business to succeed for a long period of time, management should concentrate on providing management models that focus on the mental welfare of employees (Aboul-Ela, 2017). Our new generation is intolerant, which is one of the reasons why Jeff Bezos demands to accumulate profits immediately. After several years, real market viability continues to harvest benefit. Engaged people are attracted by the mentality of caring and concern. Empathetic enterprises have higher retention of their workforce and high morale with the workforce. Since innovation in technology has made lives comfortable, Amazon needs to change its mindset of people management. It just took an article from the New York Times to lower Jeff Bezos from position one to position 87. Now that it is already at position four degraded from a position only about two years or so, nothing could deter Amazon from slipping from position 4 to position 100 (Case study). In personal opinion, the bottom line of a good enterprise is the mindset of caring and kindness in the present world.
Holding workers on the edge allowed exponential growth to be realised by Amazon. Adrenaline and cortisol are caused by the anxiety that is generated in workers. Hormone-induced cortisol stimulates the brain, motivates the brain, and regulates anxiety (Zakaria and Yusof, 2018). In the other side, Dopamine trains the body at Amazon's place of operation for quicker shifts and gestures. These hormones have been referred to by economists as flight or battle hormones. The short-term boost trains Amazon workers for any situation. This raise also made employees of Amazon reach past the boundaries, thereby making more profit in the years of study (Michael, 2019).
The long-term consequence of keeping workers on the brink or edge is that it reflects in their physical and mental health because adrenaline and cortisol do not last for long in the bodies of human beings. Most workers have been breaking down due to Amazon's continuing uncertainty, and some are leaving after their contract has expired. Employees are quickly irritated by the level of tension, thereby reducing their efficiency (Batista and Reio Jr, 2019). A lack of cooperation is what comes out of agitated workers, and this is why employees report their peers to their superiors. The rationale for becoming informants is that people dread losing their positions, and the turnover rate will escalate in the long run.
Sustainability justification of Amazon’s employer brand as reported by The New York Times
It can be assumed that Amazon is sustainable as it can thrive and succeed in the hyper-competitive world of the global industry. This accomplishment does not risk the wealth of its workforce and the environment in which the organisation would work. The New York Times report reveals Jeff Bezos from the case scenario, who is Amazon's Chief Executive Officer, as a guy who is ruthless (Case study). Bezos pressures white-collar employees to get what the organisation wants in its search for ever-expanding goals, the New York Times article stated (Case study). The articles also expressed that turnover at Amazon was strong as a result of its workplace policies; most workers did not stay for longer than a couple of months. Nonetheless, Amazon had ascended in an unrelenting, expeditious way towards the ladder of victories and milestones. In terms of consumer value, it had overtaken Walmart as the most highly rated retailer. The corporation was as creative on a continuing basis as a new start-up.
This is perceived to be unsustainable since, at the risk of abusing the workforce, the corporation enjoys success. Amazon, as a business, must adjust to the new demographics. Amazon should take a lesson from the latest technologies, and their ranking on the world map would be adversely impacted if they choose to abuse workers. This is the millennial age and the ultimate objective of every company is accountability (Ronda, Valor and Abril, 2018). The interests of workers should be well maintained for the growth and survival of Amazon.
In the short term, Amazon is profitable and it has invested a maximum of two years investing in intellectual resources. This suggests that if the worker chooses to leave the business before the negotiated contract term expires, the business will have to be paid. The business enslaves its workforce during this timeline. Adrenaline and cortisol resulted in the anxiety that is generated in workers. Hormone-induced cortisol stimulates the brain, motivates the brain, and regulates anxiety. In the other side, Dopamine trains the body at Amazon's place of operation for quicker shifts and gestures. These hormones have been referred to by economists as "flight or battle hormones." The short-term boost trains Amazon workers for any situation. This raise also made employees of Amazon reach past the boundaries, thereby making more profit. For the business, this is very sustainable. The value proposition of employers can be seen to be very competitive with respect to shareholders. Amazon's board just works on recruiting top stars. It guarantees that it has full profit from the workers it has employed before the business makes any losses (Case study). And if the employee exits the company by mistake before the deal ends, the employee must pay the company. Perhaps we can tell from this statement that the business will be profitable.
Jeff Bezos needs to accept the mindset of caring and kindness to boost Amazon’s viability as a company. He wants to understand that the workers of Amazon are human beings who are fathers like him, and they need to be at peace in order for the business to stay productive; otherwise, success would be short-lived. As a chief, it is known that a little pressure is required, but with compassion Jeff will anyway get the work done. Before it is known as a profitable company, Amazon has to be socially and financially stable; otherwise, it will be on the brink of bankruptcy. Jeff wants to reflect on the needs of the workforce so that the workers create a harmonious atmosphere (Case study). This is the only sure way to maintain the enterprise such that, now and in the future, it manages to achieve tremendous success. Many companies manage to believe that their efficiency would increase by placing pressure on workers. If it is not the case; the gesture of caring and kindness will perform extremely well (Kashive and Khanna, 2017). The New York University study says that many jobs look up to their bosses. The small act of caring and concern generates a great deal of commitment to management like that. The unsustainable aspect of treatment and empathy is that employers will take it to their benefit. Until they are kept on their toes, often workers can become lazy and refuse to perform their duties (Duggiralaet al., 2016). However, the bottom line of all this is that for all owners and customers, the mindset of caring and consideration would create a sustainable environment. Amazon Inc. should also follow the mindset of caring and kindness because they would continue to stay important and sustainable in the market; otherwise, because of competition, they risk being phased out.
Amazon's focus on customer loyalty has always been strict. The organisation has been developed on this concept. Amazon was recognisable to consumers around the world, but life within the company had been impenetrable before the New York Times report researched it. Amazon CEO Jeff Bezos wrote in a letter to shareholders that the workers can work long, hard, or intelligently, but they can't choose two out of threeat Amazon.com (Case study). These concepts unveiled that Amazon is not as sustainable as it shows as a successful employer brand.
Situation of employees thriving or barely surviving under Amazon’s workplace policies
As there are some thriving workers and alsothere are those that are surviving, it is two-way flow. First of all, those who excel are due to workaholics overachieving. At Amazon, the atmosphere is best for workers who are excited about their jobs. Those that wish to get their expertise fulfilled. Many Amazon staff dedicate their time and emotional resources to working to make them feel professional (Case study). The biggest challenge is that there are high risks for workaholics to face metabolic syndrome.The process of expertise selection at Amazon was thorough and involved screening by the company's star actors and part-time interviewers to ensure that only the best was recruited by the company. In the event that they left the company after a year of signing, prospective hires had to sign a deal that allowed them to refund the signing bonus and refund part of their relocation costs in the event that they left before the expiration of two years.
Another community of flourishing workers at Amazon were those at the cutting edge of ventures. There are workers who concentrate on ongoing projects to help them expand and improve their careers in the same sector as the projects. However, this gives them enough time to leverage the opportunities until their deal ends at Amazon to open similar companies (Case study). Finally, Amazon has been noticed by these creative workers as their testing point for everything they intend to achieve. They use the equipment of the business to come up with new ideas that can benefit them and the business, and they will sell their creative ideas as well to the company.
On the opposite, there are those workers who, as some excel, see misery at Amazon. Women are the most among these workers. Among the top executive committee, Amazon did not have woman staff. This discrepancy has been attributed by many to Amazon's rivalry and exclusion scheme. Many female employees felt that some of Amazon's "leadership ideals served to their disadvantage"; for instance, it was viewed as daunting for female employees to practise in the workplace to be encouraged to "earn trust," "have the backbone," and "disagree" with colleagues (Case study).Our society has ascertained that women work in the kitchen. A woman needs to get up early and have her family ready. The woman has to cook food for the family in the evening. The women will be disadvantaged by long-working hours as her obligations will not be fulfilled as she expects them to be. For breastfeeding women, Amazon often discourages maternity leaves. To these mothers, this is like hell when they continue to be exposed to strain every time they work. Work-life harmony, in theory, is what helps Amazon's workforce thrive without compensation. Since getting kicked out of Amazon, the hardest thing is to find jobs from other firms is the true tragedy (Jee, 2019). Once one joins Amazon Inc., since there is pressure mounting in the market, he or she would have joined prison and no organisation is able to hire them outside. This torments them for those workers who do not enjoy their job, and in most situations, it contributes to mental wellbeing that also causes death.
From the overall study, it has been identified, Amazon shows the least care and compassion towards its employees. As the Amazon employees always face stress and never stay longer, Amazon cannot be defined as a sustainable employer brand. Therefore, Amazon also supports gender discrimination to some level, as women employees feel not to express their thoughts to colleagues or seniors.
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Batista, L. and Reio Jr, T.G., 2019. Occupational stress and instigator workplace incivility as moderated by personality: a test of an occupational stress and workplace incivility model. Journal of Organizational Psychology, 19(2).
Case study.AMAZON AS AN EMPLOYER.
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Michael, A., 2019. A handbook of human resource management practice.
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