| “In his drive to create the world’s most efficient company, Jeff Bezos discovered what he thought was another inefficiency worth eliminating: hourly employees who spent years working for the same company,” reports The New York Times (June 15, 2021) in a very critical analysis of Amazon operations. Longtime employees expected to receive raises. They also became less enthusiastic about the work. Bezos came to believe that an entrenched blue-collar work force represented “a march to mediocrity.” |
| In response, Amazon encouraged employee turnover. After 3 years on the job, hourly workers no longer received automatic raises, and the company offered bonuses to people who quit. It also offered limited upward mobility for hourly workers, preferring to hire managers from the outside. It worked. Turnover at Amazon is much higher than at many other companies — with an annual rate of 150% for warehouse workers, which means that the number who leave the company over a full year is larger than the level of total warehouse employment. The churn is so high that it’s visible in the government’s statistics on turnover in the entire warehouse industry: When Amazon opens a new fulfillment center, local turnover surges. |
At Amazon, workers sometimes find out about a new shift only the day before, scrambling their family routine. When workers want to get in touch with human resources by phone, they must navigate an automated process that can resemble an airline customer-service department during a storm. Employees are constantly tracked and evaluated based on their amount of T.O.T., or time off task. One employee who had earned consistent praise was fired for a single bad shift.
| As Bezos prepares to step down as CEO, he says he wants to change Amazon’s workplace culture, stating “We are going to be Earth’s best employer.” Still, it is not at all clear that Amazon will change its basic approach to blue-collar work. The constant churning of workers has helped keep efficiency high and wages fairly low. Profits have soared, and the company is on pace to overtake Walmart as the nation’s largest private employer. Bezos has become one of the world’s richest people. People want to believe that being a generous employer is crucial to being a successful company. But that isn’t always true. Classroom discussion questions: 1. Evaluate Amazon’s warehouse employee strategy. 2, In Chapter 2, we we provide 3 strategies for competitive advantage. Which does Amazon employ? |