A disgruntled employee can have catastrophic effects upon the work environment of a company. Although it may begin with one person being unmotivated to complete their daily work tasks, his or her negative energy can impact other coworkers. One employee's unproductive mannerisms can also cause management resources to be diverted away from employees who consistently work hard and accomplish all tasks. In the long-run, this behavior is helpful to neither the employee nor company, as the company accomplishes less and the employee feels unsatisfied with his or her work. However, new human resources programs are being created to combat this issue in an innovative way.
Zappos, a popular online retailer, implemented a program called “The Offer” in 2008 which actually compensates workers for quitting their jobs. The company states that it will pay for the amount of time employees have worked plus a bonus if they quit today. While this may seem as though companies are rewarding employees for a poor work performance, it actually weeds out those without the sense of commitment and values that allow the company to successfully function. This bonus started at $100, went up to $500, then $1,000, and now is currently worth an employee’s monthly salary.
In 2009, Amazon bought Zappos. But just this year in his annual letter to shareholders, CEO Jeff Bezos announced that Amazon too would adopt a “Pay to Quit” program. The program will be offered annually to its warehouse employees and will start at $2,000 the first year and increase $1,000 each year until a maximum of $5,000 is reached. According to Bezos, “The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.” Since employees who quit are ineligible for unemployment, this compensation can help them to get back on their feet while searching for a new job.
Netflix, whose corporate mantra is “Adequate performance gets a generous severance package”, also uses the same general tactic. The company would prefer to have unproductive workers leave with some money so that their positions may be filled by more dedicated employees. However, some critics of these programs believe that the costs of losing an employee far outweigh the benefits. In terms of hiring employees, companies spend a great deal of money on advertising the position, interviewing, and screening possible candidates. Once new employees are hired, they must be trained by managers, further using the time and money of the company.
In a recent article by Zane Benefits, a rough estimate of the cost of replacing an employee is about 6 to 9 months of that particular employee’s salary. Productivity from the employee can be lost and take up to two years to replace. In the meantime, other employees who see high worker turnover rates may also become upset with the company and lose productivity. Additionally, another drawback of this program is that some discontent employees may feel that their poor performance is not due to their own lack of motivation, but rather a result of inadequate company standards. Companies need to be certain that employees do not intend to use the money they receive to retaliate by partially funding a lawsuit.
There are many other tactics businesses can use to retain employees. Benchmarking employee retention rates as opposed to employee loss rates can provide current workers with a more positive perception of the company and maintain productivity within the workplace. Allowing employees to express their feelings towards the company in a high feedback environment and conducting exit interviews with employees who quit also enables companies to learn what policies worked and how they can improve their practices to retain employees. Above all, if employees are doing an exceptional job, some type of benefit should be offered. The small costs of compensating an employee for the hard work they do are nothing compared to the amount of money potentially lost by losing a valued member of a company.