Would You Pay Employees to Quit?

It is quite an interesting question. Which employees would you pay to leave and why? How much would you pay? Most employers would never think of such a thing. They would think of terminating bad employees rather than paying them. Terminating a bad employee or poor performer is an answer, but what about an employee who is performing adequately? They are clocking in and out everyday, pulling their forty hour week, and spending the majority of their time trying not to be bothered with anything more than the minimum. They are largely disengaged from the workplace and would be doing anything else if not for the need of a paycheck. Some employers have recognized this problem and have decided they don’t want these people working for their companies any longer. They have calculated that with only a certain number of positions available within their organizations, they don’t want those positions taken by people who are not happy to be there and make a huge contribution to the company.Paid to Quit

In a recent LA Times article, Amazon has made an offer to their fulfillment center employees to leave the company if they would like and the company would actually pay them to do so. It is a new program the company is calling Pay to Quit. The offer is only available once a year and it starts out as a $2,000 offer the first year. It goes up by $1,000 each year until it maxes out at $5,000. If an employee were ready to move on, this would hopefully be enough incentive to push them the rest of the way out the door.

The article also notes that Zappos offer a bonus to executives to leave if they are unhappy. In a Businessweek article, I see that the corporate culture at Zappos is seen as their brand. Zappos would like to get rid of the people who won’t fit into their system as soon as possible. New hires go through an intense training program that last four weeks. After the first week, they are given an opportunity that is referred to as “The Offer.” The new hire will get paid for their first week and an additional $2,000 if they choose to just leave the company. It is interesting to note that only about 2-3% of the corporate new hires takes the offer. The other 97% would much rather have the job and work for the company.

Netflix is another company, which offers a bonus. In a Firstround article, I see that Patty McCord put a system in place that really changed how people would think about human resources. One of the issues McCord had was the need for highly skilled and talented employees. Performance problems were not based on not working hard enough, it was people who were not going to reach the expectations the position needed to deliver. Rather than go through a long coaching process that would cost time for everyone, she elected to provide managers with the power to make the employee an offer. Rather than go through a drawn out process, the employee could accept 60-90 days salary to find a new job, get a great recommendation, and leave the company in good standing for their hard work. McCord viewed this as much more positive for everyone in the long run.

I have seen circumstances where a manager will threaten a discontent employee by saying something like, “If you don’t like it, there’s the door” or “You’re not locked in here. You can leave anytime you want!” I don’t think this response is going to cause the employee to feel closer to the company or more apart of the work family. If anything, this type of language will cause the employee to become really negative. The employee may continue to do adequate work, but sabotage progress at every opportunity. These types of toxic situations are ones these CEOs have elected to hopefully bypass with their offer. Obviously, paying a few thousand dollars to get rid of a toxic employee is well worth it. Especially when someone replaces them whose performance exceeds the expectations of the company.

While Amazon’s latest announcement is not exactly groundbreaking, it is an extreme way to deal with employee disengagement. Having an employee of four years just leave and take $5,000 can be costly in terms of hiring and training. These companies have likely calculated that it makes sense for them to make these offers.  I wrote an article some months back on employee disengagement and addressed the seriousness of the problem. It is interesting to see how some of these companies have went outside-of-the-box to find solutions. Please share this article with a friend or colleague if you enjoyed it. Thanks for reading and I’ll see you next time.

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1 Comment

  • Cecil: I have been using the Zappo example of getting money for leaving in my social media classes as a prime case for creating a sound business culture. My wild guess is that if you would interview the majority of employees in Sweden, they only get a kick once a month (usually around the 25th) at their work… when they get paid!

    How about paying the right people in real money, silver and gold? Give them something tangible that is a true appreciation of values?

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