Pay to Quit scheme 
Published on July 6, 2016
published on July 6, 2016

ThePeopleAlchemist Edit: HR, Business and pay to quit scheme

 

I recently read an article in the CIPD People Management magazine about an interesting people practice.

Amazon is offering its staff up to $ 5,000 to leave the company immediately, the so-called “Pay to Quit” scheme (only available in the US to warehouse workers).

The principle behind it is apparently to encourage people to “take a moment and think about what they really want” which, according to Amazon CEO, is something only a small number of people do (take up the scheme).

When I first read the article I couldn’t quite believe it. After reflection, though I can see some points that deserve a mention:

  1. The weakest-link employee can quickly turn a positive working environment (and that great culture the business worked so hard to build) into one that is divisive and negative.
  2. In addition to the direct costs affecting co-workers’ performance, there are additional soft costs to factor into the equation like absenteeism, wasted managers time and customer loss.
  3. The scheme is broadly comparable to the voluntary redundancy practice adopted by many companies in times of re-structuring/re-organisation but in business as usual times.
  4. The scheme is “voluntary” and, in a way, gives more choice to employees (albeit for less money) than the settlement agreement practice which normally comes at a time when the relationship between employer and employee has become difficult to manage and both, but more frequently the employer, are seeking a way out.

 

Provided people are not forced to leave and there is a caveat whereby the company reserves the right to accept people participating in the scheme (you can’t really stop people from resigning but you don’t need to incentivise them either especially the ones possessing the most critical skills) it seems a frank way to deal with discontent: ultimately employees resign only when they are good and ready ($ 5,000 does not exactly give you a lot of breathing space if/when looking for another job).

It is a practice though that would/could only work in some countries from a cultural perspective, in others would create a backlash and more trouble that is worth.

 

Laura Mariani

Laura Mariani

Best Selling Author, Speaker, Change & Transformation Expert

 

Hi there, I hope you enjoyed this post. Please do provide me with feedback.

I want to hear ‘the good, the bad and the ugly’. If you disagree with me or want to provide a different perspective, leave a comment. Tell me what’s on your mind.

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Laura xxx

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