Topic: Management

Zappos Pays People To Quit - Should you?

By Bob Phibbs

I've always said, "The body should go when the mind goes."

Unfortunately, that's usually six weeks or more later.

Zappos has a program that pays new employees $4000 to quit the company during initial training sessions. The policy is designed to make sure new employees are committed to working at the online retailer beyond just a paycheck.

Is this something you should do?

Known to Zappos' veterans as "the offer," the quitting bonus offer typically comes a week or two into Zappos four-week indoctrination period that immerses new employees in the company's strategy, culture, and obsession with customers. Typically, at some point in the training session, the training class leader leaves the room and designated employees enter to have a frank discussion with the new hire.

"They say: 'Off the record, really, how is everything going? Does it seem like the right fit for you? Is this really where you think you want to be?,'" Rachel Brown, training manager at Zappos, told Internet Retailer. "Then we say if this isn't the place for you we want to let you know about an early resignation offer that you can take advantage of."

The quit-now incentive, which started with offers of $100, was instituted by Zappos' CEO Tony Hsieh as an experiment about four years ago. The quitting bounty was raised to $1,000 in January 2008, and recently hiked to $4000 because Mr. Hsieh didn't feel enough people were taking the company up on its offer at $2,000.

Only about 3% have so far taken the money since the program was initiated, Ms. Brown told Internet Retailer. Read full article here.

In an online interview with, Mr. Hsieh explained how Zappos' success is directly connected with its unique "two-step" hiring process that in its second-step concentrates on Zappos' corporate culture and core values. Mr. Hsieh said, "We make sure the people we hire have similar values. We won't hire them if they are not a "culture-fit even if they are technically strong."

Less dead wood. Less paperwork. Less write-ups. Brilliant.

Yes, it would be great if you could pay people to quit but let's start with the basics...

Here are there four elements of the Zappos approach any retailer could implement:

  • Screen employees at a very high level
  • Train at a very high level - two to four weeks making it a combination on the floor and training room.
  • Monitor their progress with frequent quizzes and role-play
  • Have a senior managment person who understands your philosophy and what you are trying to accomplish (for example "Create an exceptional experience for everyone you come in contact with from customers to the CEO to the delivery guy") take the new hire out for coffee or lunch and asking how it really is going. They need to be sure there is no judgement but looking for clues how they feel the fit is from their perspective.

We often find someone just "up and quits on us" when the clues were there for awhile.

And let's be honest, it's not like them quitting on you unannounced had no financial impact with overtime, additional training and lost business so whatever you paid them is a cost you already are absorbing.

Money isn't the only way to get the body to go when the mind goes, what say you?

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