Performance, Culture, and Employee Engagement at Amazon
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This report discusses the performance-related initiatives, culture-related initiatives, and engagement-related initiatives at Amazon, along with recommendations for improvement.
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Student’s Last Name1 People, Culture and Contemporary Leadership By (Name) Course Professor University Date
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Student’s Last Name2 Introduction When Amazon began its operations in 1995, its only business was selling books. Within a month since its inception, Amazon had shipped books to over forty states. Since then, the organization has diversified itself to become one of the globe’s leading e-commerce company with approximately 49% of its total e-commerce sales in the United States as of 2018. Amazon has been able to pull these impressive results by improving the performance of its workforce, the culture it adopts, and improving rates of employee engagement. The report addresses Amazon’s performance-related initiatives, culture-related initiatives, engagement-related initiatives, and gives recommendations for each of the three HR strategies. Performance-Related Initiatives Recently, Amazon has made headlines by aiming to improve the performance of its workforce by announcing that it would voluntarily increase the company’s minimum hourly wage to $15 (Benjamin, 2019). While the federal minimum wage remains at $7.25, Amazon’s pledge may be viewed as a curious decision. However, if the costs associated with raising wages are brought into consideration, an essential issue is missed: raising wages is effective in boosting workplace productivity (Albrecht, Bakker, Gruman, Macey and Saks, 2015, pp.21). Considering that Amazon has got a reputation for being a long-term and a data-driven organization, it is a fact that the company has carried out analysis and come to an understanding that increasing the employees’ wages, - from a business perspective- has got more benefits compared to the costs associated with it (Al Mehrzi and Singh, 2016, pp.840). Higher wages motivate the employees and it spurs productivity within an organization. Amazon is motivated to do both prosocial as well as antisocial things and a pay hike will benefit both the staff and the company’s bottom line.
Student’s Last Name3 Higher wages allows the organization to attract as well as retain better employees. In addition, efficiency wages, - paying wages that are above the market place- is a motivating force to an organization’s existing staff such as the case of Amazon (Hogan and Coote, 2014, pp.1611). The intuition is straightforward because increased wages makes the job more desirable. Efficiency wages also results in productivity gain due to the staff’s innate sense of reciprocity. Forced ranking of the employees is one of the ways to measure this performance-related initiative. Using this method, the managers and the supervisors rank the employees into three groups; the top, average, and the lowest-performing staff. Forced ranking is a technique used to measure the achievements of every staff against those of their workmates, rather than comparing a worker’s current evaluation period against their own past (Humaniqasolutionscentre.com.2019). Due to this, forced ranking measures performance in an organization and creates a very competitive work environment. Culture-Related Initiatives A kindness initiative is one of the culture-related initiatives. A kindness initiative helps bring into the workplace more respect, empathy, as well as kindness. Such kind of initiative comprises creating a set of kindness “pillars” that are to be followed by all the employees (Bedarkar, Pandita, Agarwal and Saini, 2016, pp.22). Such an example include assigning work based on the staff’s strengths to set every employee for success or when giving performance feedback or even constructive criticism, it is good to give “compliment sandwiches”, - a compliment, comment, and compliment. Additionally, regular employee recognition can be instituted. For example, the team leaders or even the managers can organize a monthly meeting
Student’s Last Name4 where employees are rewarded for their excellent work (Lacatus, 2013, pp.423). Creating a wall of fame to post pictures of the high-performing employees can help create a tangible element for such kind of recognition. Nonetheless, the workers can be encouraged to recognize one another based on current business successes. Amazon is recognized for its culture initiative where it pushes the employees to explore new ideas and take risks. The culture of innovation has enabled the organization to seek new opportunities in utilizing data-intensive to offer efficient online retail service. According to Amazon.com Inc., “We’re a company of pioneers. It’s our job to make bold bets, and we get our energy from inventing on behalf of customers. Success is measured against the possible, not the probable” (Fankhauser, 2019). Based on this statement, it is clear that Amazon’s culture is made up of three features: Amazon enhances boldness among its staff evident on how the organization pioneered to sell several items through e-commerce. The corporation encourages the employees to take risks by considering new ideas of doing business. Customer-centricity is the other feature whereby Amazon determines trends as well as changes in customer preferences and makes use of such preferences in its e-commerce services hence maintaining its effectiveness to meet customer needs. Engagement-related Initiatives “Employee engagement” has become one of the most popular terms in HR. There is a direct correlation between organizational performance and employees’ satisfaction. Intuitively, it makes sense because engaged employees are more motivated and committed to drive organizational performance (Guest, 2014, pp.143). Organizations are taking major steps in encouraging the employees’ buy-ins are prevalent (Schneider, Ehrhart and Macey, 2013,
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Student’s Last Name5 pp.375). Also, companies are working to create a culture where the staff is empowered and challenged by their work. Regardless of the approach taken by an organization to enhance employee engagement, it takes a lot of time to effect cultural change (Merrill, et al., 2013, pp.16). Much of this is mostly spent in trying to convert the workers who are disengaged in their work to those that are engaged and who are driven to assist the organization to attain its goals. This kind of thought led to Amazon’s adoption of an employee engagement program whereby the company offers to pay its employees to quit. The headline of the program is “Please do not take this offer.” The program aims to encourage the staff to take their moment and think of what they really want to achieve. This is because, in the long-run, an employee that stays in an organization is not healthy both to the company and the employee. Bezos’, - Amazon’s CEO- a concept which was borrowed from Zappos recognizes that by incenting the workers to leave, it results in increased returns on investment (Espenson and Espenson, 2019). However, the results are low when trying to turn around employees that do not want to work in the organization and who are not committed to the company’s objectives. Nonetheless, Amazon’s employee engagement strategy cannot work in isolation. It is important to create an environment where there is a large percentage of committed employees which translates to an overall positive impact. Recommendations Regardless that Amazon’s growth history has made it dominate the e-commerce marketplace, the company’s success is not guaranteed. The following are proposed recommendations that Amazon can adopt to improve its workforce performance, culture, and employee engagement.
Student’s Last Name6 For optimal performance, Amazon can try to improve or balance motivation. The company should look at the employees’ level of motivation and determine what motivates them to achieve maximum returns. In this instance, Amazon should consider that some of the motivations are better in the long-run than others. Employees that are extrinsically motivated often work for the wrong reasons, such as working because they have no other choice. Amazon should thus work in collaboration with the workers to help them adopt the best level of motivation as well as ensure that the employees are motivated for the right reasons. Amazon uses the feedback tool as one strategy to enhance employee engagement. However, the feedback tool has been criticized because it facilitates criticism of employees behind their back. Amazon can improve on this employee engagement strategy by sending the feedback directly to the staff. Many organizations, such as Amazon, make the mistake of passing all the feedback to the manager, who then decides if to share it with the employee or not. However, the organization should not shield the feedback from its employees. It is clear that Amazon relies on unsolicited feedback whereby the employees give their feedback anytime they want but they are not empowered to request for feedback. Hence, this results in imbalance on the negative side. Amazon should enable the staff to give and request feedback. Despite that Amazon has improved its culture, there is still room for improvement. Still, there are disturbing issues regarding the company’s high-stress and highly competitive work environment. Amazon can improve on its “bruising” culture by being nicer to its staff. The company should consider the employees have another life besides work. Creating a culture that values the employees enhances employee loyalty and productivity thus resulting in increased returns on investment.
Student’s Last Name7 Conclusion Culture, performance, and employee-engagement are important human resource strategies to an organization. Amazon is trying to improve the performance of its workforce by voluntarily increasing the company’s minimum hourly wage to $15. In addition, Amazon’s culture pushes employees to explore new ideas and take risks through innovation. The organization improves employee engagement by initiating a program whereby the employees to quit. Some of the proposed recommendations that Amazon can consider include improving and balancing motivation and creating an environment where employees can give and request feedback. In addition, Amazon can improve its high-stress and highly competitive work environment by creating a culture that improves employee loyalty and productivity.
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Student’s Last Name8 Bibliography Al Mehrzi, N. and Singh, S.K., 2016. Competing through employee engagement: a proposed framework.International Journal of Productivity and Performance Management,65(6), pp.831- 843. Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee engagement, human resource management practices and competitive advantage: An integrated approach.Journal of Organizational Effectiveness: People and Performance,2(1), pp.7-35. Bedarkar, M., Pandita, D., Agarwal, R. and Saini, R., 2016. Examining the impact of organizational culture on customer centricity in organizations: An analysis.Prabandhan: Indian Journal of Management,9(2), pp.19-28. Benjamin, J. (2019).Employee Rewards - who would you rather work for – Amazon or Apple? [online] Blog.xexec.com. Available at: https://blog.xexec.com/employee-rewards-who-would- you-rather-work-amazon-or-apple [Accessed 3 Apr. 2019]. Espenson, A. and Espenson, A. (2019).Amazon's Employee Engagement System is Making Waves. [online] Tech.co. Available at: https://tech.co/news/amazons-employee-feedback-system- can-teach-us-employee-engagement-2015-11 [Accessed 3 Apr. 2019]. Fankhauser, D. (2019).Amazon's New Performance Review Process Will Be Employee-Focused | Reflektive. [online] Reflektive. Available at: https://www.reflektive.com/blog/amazon- performance-reviews/ [Accessed 3 Apr. 2019].
Student’s Last Name9 Guest, D., 2014. Employee engagement: A sceptical analysis.Journal of Organizational Effectiveness: People and Performance,1(2), pp.141-156. Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model.Journal of Business Research,67(8), pp.1609-1621. Humaniqasolutionscentre.com. (2019).If you don’t like it, leave! – Amazon’s strategy to improve employee engagement. [online] Available at: https://humaniqasolutionscentre.com/blogs/humaniqa-hr-blog/14274109-if-you-don-t-like-it- leave-amazon-s-strategy-to-improve-employee-engagement [Accessed 3 Apr. 2019]. Lacatus, M.L., 2013. Organizational culture in contemporary university.Procedia-Social and Behavioral Sciences,76, pp.421-425. Merrill, R.M., Aldana, S.G., Pope, J.E., Anderson, D.R., Coberley, C.R., Grossmeier, J.J. and Whitmer, R.W., 2013. Self-rated job performance and absenteeism according to employee engagement, health behaviors, and physical health.Journal of occupational and environmental medicine,55(1), pp.10-18. Schneider, B., Ehrhart, M.G. and Macey, W.H., 2013. Organizational climate and culture.Annual review of psychology,64, pp.361-388.