MBA401 Assessment 1: In-depth Analysis of Amazon's HR Practices

This report provides a comprehensive analysis of Amazon's Human Resources (HR) strategies, focusing on performance-related, culture-related, and engagement-related initiatives. The report begins with an introduction to Amazon's growth and diversification, highlighting the importance of workforce performance, organizational culture, and employee engagement. It then delves into specific HR practices, such as the increase in minimum hourly wage to improve workforce performance, the implementation of kindness initiatives to foster a positive culture, and the adoption of an employee engagement program that offers employees to quit. Each initiative is discussed in detail, including its potential impact and measurement methods. The report also examines the type of culture prevalent within Amazon, emphasizing its innovative and customer-centric approach. Furthermore, the report provides recommendations for enhancing these HR strategies, including balancing motivation, improving feedback mechanisms, and creating a more employee-friendly work environment. The report concludes by emphasizing the significance of culture, performance, and employee engagement as crucial HR strategies for organizational success, with specific suggestions for Amazon to maintain its competitive edge in the e-commerce market.

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People, Culture and Contemporary Leadership
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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.

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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

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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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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.

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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.

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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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Bibliography
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