PG Diploma in Strategic HRM: Amazon's HRM Strategies and Impact

This report delves into the human resource management strategies employed by Amazon, a leading global online retailer. It examines various aspects, including employee management, compensation and incentives, recruitment processes, growth opportunities, and employee involvement. The report analyzes how these strategies are influenced by global economic drivers such as increased competition, economic growth variations, and rising unemployment rates. Furthermore, it explores the direct relationship between Amazon's HRM strategies and its organizational objectives, particularly its customer-centric approach. The analysis highlights how effective HRM practices contribute to achieving employee commitment, flexibility, quality, and strategic integration, ultimately impacting organizational performance and success. The report emphasizes the importance of aligning HRM strategies with the company's mission to maintain a customer-focused brand image and achieve maximum output from its human resources, especially in a global context. The report also discusses the impact of Amazon's cost leadership strategy and geocentric staffing to meet the global demands.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
Name of the student
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Table of Contents
Introduction......................................................................................................................................2
Human resource management approach of Amazon.......................................................................2
Major human resource management strategies by Amazon............................................................3
Employee management................................................................................................................3
Compensation and incentives......................................................................................................4
Recruitment process.....................................................................................................................4
Growth opportunities...................................................................................................................4
Employee involvement................................................................................................................5
Impacts of the global economic drivers in organizational strategy.................................................5
Influence of human resource management strategy in achieving organizational objectives...........7
Conclusion.......................................................................................................................................9
Reference.......................................................................................................................................11

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Introduction
The complexities related to the human resource management are more relevant in the
case of global organizations due to the reason that they are facing the diverse issues from
different social and economical backgrounds. Amazon is selected as the chosen firm for this
assignment because Amazon is the leading online retailer in the world and is having their
presence across the globe (Alfes et al.2013). Their diverse workforce is one of the most difficult
challenges being dealt by Amazon due to the fact that employees from across the world are
working with Amazon. Apart from their diverse range of employees, human resource strategies
being followed by them are also effective and innovative enough. Thus, reviewing these
strategies will help to gain an understanding about how Amazon can manage their employees.
This report will discuss about the different human resource management strategies being
initiated by Amazon and how they are meeting the organizational objectives. In addition, this
report will also discuss about the impacts of the international economic drivers in the designing
of the human resource management strategies of Amazon. Lastly, the linkages between the
human resource management strategies of Amazon and their influence on achieving the
objectives will also be discussed.
Human resource management approach of Amazon
The overall approach of the human resource management approach of Amazon is based
on their mission and their mission to maintain their brand image as the most customer centric
organization in the world. They also strive to have the maximum output from the side of the
human resources and making them effective in line to the current market situation (Albrecht et
al. 2015). In view to this approach, it is identified that Amazon is following more production and

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performance oriented human resource management process. The level of employee performance
is being maintained at the peak level at any point of time and each of the strategic elements is
designed accordingly. The evaluation and monitoring process of Amazon in regards to their
human resource management process is also effective in the identifying the changes and
limitations and amending accordingly.
Major human resource management strategies by Amazon
Being a global organization, Amazon is following and initiating different human resource
management practices in their operation. The following sections will discuss about each of these
processes.
Employee management
At one point of time, Amazon was infamous for treating their underperforming
employees and creating pressurized working environment in the workplace. In addition, retention
of the existing employees was not given the due importance and thus the attrition rate in Amazon
was all time high. In view to change this scenario, managing and maintaining the satisfaction
level of the employees is given the maximum importance by Amazon. For instance, they have
initiated a training program known as Pivot that aimed at retraining the underperforming
employees over terminating them (Paille et al. 2014). This is helping in up-skilling the existing
employees and turnover rate is getting down. In addition, different benefits and perks are also
developed in engaging and motivating the employees such as offering maternity and parental
leave, paid holiday leave and employee discounts on the Amazon products. All these offerings
are creating positive image among the employees and their level of organizational citizenship is
getting enhanced.

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Compensation and incentives
Financial benefits are the most common and effective motivational technique for the
employees and Amazon is no exception. They are following the pay for performance strategy
where the employees are being able to gain incentives for better performance. This strategy is
well matched with that of the organizational objective of Amazon due to the reason that their
performance oriented approach is getting enhanced by pay for performance. The rate or level of
incentives being offered by Amazon is maintained at the higher side compared to the industry
standards (Larkin 2014). Thus, the employees of Amazon are motivated at any point of time due
to the attachment of the financial benefits.
Recruitment process
The recruitment process of Amazon is maintained as a unique approach because selection
of the new candidates as per their skills and expertise influences the long term productivity. The
recruitment process of Amazon is based on different criterions and one of the major criterions is
the skill sets and performance ability of the candidates. As discussed earlier, Amazon is one of
the leading performance oriented organizations in the current time and new candidates are being
selected only on the basis of their acceptances towards the high performing workplace culture
(Klotz et al. 2013). Thus, the sets of employees in Amazon are having uniform approach towards
the workplace expectations and requirements. In addition, the gender and cultural diversity is
maintained in the recruitment process in order to have a more inclusive workplace in Amazon.
Growth opportunities
Amazon maintains the approach that employees will treat their respective job profile as
work but as the career opportunity. In this case, the employees of Amazon are motivated and

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engaged and they are also encouraged in upgrading their skills and expertise, which will be
effective in the long term. Thus, the employees in Amazon are not dealt with the performance
figures but also their long term sustainability is focused. This is also creating positive and
favorable image among the employees and they are feeling more inclusiveness in the workplace.
From the perspective of Amazon, long term sustainability for the employees is also reflecting in
their business viability with the availability of the multi skilled human resources and lower
attrition rate.
Employee involvement
The more involved will be the employees in their workplace and in the organizational
affairs, the more will be their job effectiveness. This is due to the reason that they will have sense
of importance with having higher involvement. In the case of Amazon, employees are
encouraged to take up the ownership of some goods being sold. This creates sense of importance
and ownership among the employees and they treat the workplace as their own business rather
than just a salaried employee. On the other hand, the employees are given certain extent of
autonomy in their decision making process, which also helps in enhancing their involvement in
the organizational process. In view to the objective of Amazon of achieving the customer
centricity, involved employees are offering the best services and dealing with the different
customer issues according to the situation by own. The effectiveness of the entire process of
service delivery of Amazon is getting enhanced.
Impacts of the global economic drivers in organizational strategy
Amazon is operating on the global basis and thus is exposed to the various global
economic trends. One of the major economic trends or drivers for them is the increased

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competition in the market. This is due to the reason that with the recent boom in the internet
services across the world along its high market penetration, competition for Amazon in the
online retail sector got increased. In this case, they leveraged on their customer centricity in
meeting the diverse and different expectations of the customers (Kehoe and Wright 2013).
Accordingly, the diverse employees are selected in the workplace to meet the different social and
cultural differences. The major reason or requirement for Amazon in having diverse sets of
employees in their workplace is due to the different customer groups from different social and
cultural backgrounds. With the increasing trends of globalization, the human resource
management process of Amazon is becoming more diverse and inclusive. The organizational
objective of Amazon in being the most customer centric brand in the world is getting fulfilled
because diverse sets of employees in the workplace are meeting the individual expectations of
the customers and offering of personalized services are also made possible (Kramar 2014).
Another major economic trend is the economic growth, which is different in different
regions. Amazon is having their presence across different countries and only few of them are
witnessing positive economic growth. In this case, the cost leadership strategy of Amazon is
effective enough in meeting the challenge of fluctuating economic growth. Amazon is gaining
the most from the countries with positive economic growth and still holding the significant
market share in the countries with negative market growth. However, it should be noted that
there are certain factors that are being followed by Amazon in initiating their cost leadership
strategy. This includes lack of intermediaries in the value delivery process, good number of
suppliers and enhanced volume (Jackson, Schuler and Jiang 2014). Amazon buys the goods
directly from the wholesalers and distributors, which helps in mitigating the cost of
intermediaries and end products can be offered in more competitive price points. In addition,

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Amazon is working with large number of suppliers from across the world, which is reducing the
bargaining power of them. The competitive price at which Amazon is sourcing the goods is
enabling them to offer to the end customers in lower price. Thus, cost leadership approach is
getting maintained in the business. Lastly, according to the business model of Amazon, the lower
profit margin is getting adjusted with the high sales volume.
The rising rate of unemployment is also contributing in the cost leadership approach of
their human resource management. This is due to the reason that the more will be the
unemployment, the more will be the availability of the skilled labors at affordable rates. This is
helping Amazon in having the access to low cost human resources in the workplace and helping
in gaining the lower average cost of operation. With the increase in the global competition,
Amazon is also indulged in the price war with their competitors. However, the level of
competition for Amazon is different in different regions and thus geocentric staffing is followed
by them. With the help of the geocentric staffing process, Amazon is having both host and home
country nationals in their different strategic business units and ensuring the market adaptability
approach in managing the employees. For instance, the American employees will not be
motivated in the same way as Chinese employees and thus they are having the requirements for
different and diverse sets of human resource management approaches. With the help of the
geocentric staffing process, each of the strategic business units of Amazon across the world is
having both home and local officials, which is ensuring both standardized and market adaptable
approach. Thus, it can be concluded that there are multiple economic trends or drivers relevant
for the human resource management process of Amazon.
Influence of human resource management strategy in achieving organizational objectives

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Human resource management strategies and organizational objectives are having direct
relationships between the two. This is due to the reason that the more effective will be the human
resource management process of Amazon, the more will be their competency in meeting the
objectives. The core organizational objective of Amazon is to maintain their customer centricity
and in order to maintain this customer centric approach, employees should be effective enough.
For example, it is the effectiveness and skill sets of the employees that are important in providing
the after sales services to the customers. Hence, the initiatives taken by Amazon in increasing the
skill sets, motivation and engagement level of the employees are influencing their effectiveness
in meeting the customer expectations. This is identified as one of the major linkages between the
human resource management strategies and organizational objectives. Another strategy being
initiated by Amazon is the performance appraisal process by the middle level managers. This
refers to the process of determining the performance evaluation of the employees by the middle
level managers and not by the top level managers. Middle level managers are having higher
exposure among the lower level employees and they are having better understanding about the
real world situation. Thus, the performance management process for the employees in Amazon is
getting more effective and probability of employee satisfaction is also more. The more will be
the level of employee satisfaction, the more will be their organizational citizenship and they will
be more oriented towards providing the best services to the customers. Thus, the organizational
objective of Amazon of becoming the most customer centric organization in the world can be
achieved.
Another organizational objective of Amazon is to gain the cost leadership in the internal
management and reducing the average cost of operation. In doing so, the human resource
management process of them is designed in enhancing the productivity and performance of the

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employees. In the case of Amazon, the human resource management process is designed in view
to the performance enhancement of the employees. It is reported that the employees of Amazon
across their global operations are considered as one of the most productive in the world. With the
presence and access of productive and high performing employees in place, Amazon is being
able to make the most out of the people and average cost of operation is getting down. Thus, the
linkage between achieving the cost leadership in the internal management and human resource
management process is proved for Amazon.
In the current business state of affairs, maintaining the gender equality and employee
diversity is important in gaining the long term sustainability. Amazon with their global
operations is bound to follow each of these sustainable approaches. In view to this scenario, the
recruitment and selection process of them is designed in achieving the diversity and equality. It is
reported that more than 40 percent of the global workforce of Amazon are female, which denotes
the emergence of the gender equality in the workplace. In this case, the major linkage between
the human resource management process and the organizational objectives is gaining the long
term brand and social sustainability. The organizational objective of Amazon of gaining the
social value in the market is being influenced by their human resource management process and
strategy. This is also proving the linkages between the organizational objectives and human
resource management process of Amazon.
Conclusion
This report concludes that the human resource management process of Amazon is well
aligned with their organizational objectives. This is due to the reason that each of the elements of
the human resource management process of them is designed in achieving the organizational

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objectives. There are different strategies of human resource management discussed in this report,
which are followed by Amazon. Each of these human resource management strategies is based
on developing the skills and productivity of the employees. The key organizational objectives for
Amazon identified are gaining customer centricity, cost leadership and social sustainability.
Based on these objectives, the human resource management strategies of Amazon are designed.
This report also identified the key international economic drivers that are influencing their
human resource management approaches and Amazon is facing it most due to their extensive
global presence. Lastly, this report concluded that the human resource management strategies of
Amazon is well linked with their organizational objectives and are having influence in achieving
them. However, it should be noted that the approach of human resource management of Amazon
should be made more flexible in coping up with the current changing scenario of the external
business factors. The more flexible they will be, the more will be the effectiveness and ability of
Amazon in meeting the changing market demand and trend.

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Reference
Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee
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Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human
resource management practices, engagement and employee behaviour: a moderated mediation
model. The international journal of human resource management, 24(2), pp.330-351.
Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic human
resource management. The Academy of Management Annals, 8(1), pp.1-56.
Kehoe, R.R. and Wright, P.M., 2013. The impact of high-performance human resource practices
on employees’ attitudes and behaviors. Journal of management, 39(2), pp.366-391.
Klotz, A.C., da Motta Veiga, S.P., Buckley, M.R. and Gavin, M.B., 2013. The role of
trustworthiness in recruitment and selection: A review and guide for future research. Journal of
Organizational Behavior, 34(S1), pp.S104-S119.
Kramar, R., 2014. Beyond strategic human resource management: is sustainable human resource
management the next approach?. The International Journal of Human Resource
Management, 25(8), pp.1069-1089.
Larkin, I., 2014. The cost of high-powered incentives: Employee gaming in enterprise software
sales. Journal of Labor Economics, 32(2), pp.199-227.