Why Amazon offers quitting bonus

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The company organises this loyalty test annually, which comes with a payout of Rs 3.4 lakh.

Every year Amazon offers its employees the option to voluntarily quit the company for a good some of money. It ranges between Rs 1.34 lakh ($2000) to Rs 3.4 lakh ($5000), depending on the number of years the employee has spent at Amazon. Those who have completed a year get $2000 as quitting bonus and the sum increases every year by another $1000 to a maximum of $5000.

But there is a catch—employees who take up the offer cannot ever return to Amazon.

The Company calls this programme, Pay to Quit, and the subject line of this offer letter that goes to every employee reads—Please Don’t Take This Offer.

What Amazon says is that it doesn’t want its employees to take this offer, but it does so to test their loyalty towards the Company.

Those who decline the offer prove their commitment to the Company and in a way sign a psychological contract. This makes them more engaged, more productive, and ultimately boosts Amazon’s bottom line.

While Amazon doesn’t want its employees to quit, at the same time, it doesn’t want people to stay with the Company unwillingly either.

The Company believes that with such a type of filtration process, the less-motivated employees would go and only the motivated ones would stay making Amazon a healthier place to work.

A Company spokesperson says, “In the long term, staying somewhere you don’t want to be isn’t healthy for our employees or for the Company.”

This programme was adopted by Amazon from Zappos, a company it acquired in 2009. Zappos had a similar kind of programme for its newest employees. It offered $1,000 to quit within the first few weeks of employment. Amazon extended this offer to all the employees.

Jeff Bezos wrote in a letter to the shareholders, “The goal is to encourage folks to take a moment and think about what they really want.”

However, in the age of the millennials, the big question is ‘are they loyal to any company?’ and ‘is it a big deal if they can’t come back to Amazon ever?’ Practically, it’s rare for a person to come back to a company after quitting. Besides, what if certain employees have already made up their mind to quit and just wait for the right time to call it quits? They would laugh their way to the bank!

 

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