Pay Your Employees to Quit

Zappos Logo2
This article about an interesting hiring practice at Zappos, the billion dollar shoe and handbag seller that’s known for its customer service, has been floating around recently.

Essentially, Zappos pays its new employees to quit after a week or two on the job. After employees go through part of their four weeks of paid training, the company makes an offer to have them quit. The offer is pretty lucrative, too: a $1,000 bonus, plus whatever they’ve made so far.

What the company is trying to do is essentially talk (and pay) people out of the job. Good companies try to convince new or potential employees not to work for them to some degree. They are looking for employees that will be dedicated to the company and to their jobs. Employees that don’t have that level of dedication aren’t worth it. By paying its new employees to quit, Zappos is weeding out the employees that aren’t in their jobs for the right reasons. If the particular employee is willing to leave the company for $1,000, then Zappos doesn’t want them. It’ll save the company money and employee a lot of unhappiness in the long run.

Companies like Zappos depend on their customer service to differentiate themselves. There are a million places to buy shoes, about half of which offer a way to buy the shoes over the Internet. Zappos depends on its customer service to be number one. And they do a great job at it.

Customer service, though, is dependent on people. People are the lifeblood of any customer service company. Without good people, it’s impossible to have good service. By offering new employees $1,000 to leave, Zappos is leaving itself with only the best people.

The ones that stay are the ones that are committed to their jobs, to Zappos, and to customer service. They’ll have a great career providing great service at a great company. Zappos needs employees like that to continue to provide great service. As soon as the people at Zappos come to work thinking it’s just a job for just a paycheck, there will be a serious problem. Those “I just want a paycheck” employees are usually just fine at providing average service at average companies, but they’re rarely exceptional.

I’ve gotten to know Zappos not only through my interview with the company’s CEO, Tony Hsieh, but also from listening to Tony speak at Customer Service is the New Marketing and working with him on that. They’re a unique company and one that I think any customer-centric company could learn a lot from. They know what it takes to be exceptional and they do a great job at being exceptional.

5 Responses to “Pay Your Employees to Quit”

  1. Larry Streeter - VP Customer Support, Constant Contact said:

    May 28, 08 at 3:50 pm

    I read about this a few weeks back and at first glance thought “that’s ridiculous”! But after thinking about the time and effort invested in “bad hires” it didn’t take long to see the brilliance behind this idea.

    Just last week I sat in a meeting with our Training & Development staff and management team reviewing the progress of our latest new hire class. At the end of the meeting I posed the question: “If we offered $1000 to each of the new hires right now to leave the company, do you think anyone would take it?”.

    The conversation that simple question provoked was highly enlightening! Everyone around the table quickly saw the value proposition and was eager to test it. Not surprisingly, these were the very managers who at one time or another had to deal with an employee that was not a cultural fit and were recalling the time and energy it takes to manage the situation.

    And when you look at it that way, the $1000 seems like pennies!

  2. Service Untitled said:

    May 28, 08 at 9:32 pm

    Larry,

    Thanks for your comment! I think that’s an interesting story and I’d be curious to see what your team decided to do as a result. Did you decide to go ahead and make that offer?

  3. troy said:

    Jun 07, 08 at 11:01 pm

    I’m curious where the $1k is budgeted. Talent Management or Marketing?

  4. Service Untitled said:

    Jun 08, 08 at 12:32 pm

    I’d say it is an HR expense. This might have created a bit of a marketing buzz for Zappos, but it is definitely an HR practice.

  5. Service Untitled» Blog Archive » Quirky customer service commercial said:

    Mar 10, 10 at 10:59 am

    […] training and two weeks of practical knowledge answering customer calls, they are offered money to the tune of $1000 to quit if they feel they do not fit with the culture. Employees who decide to stay within the […]