Friday, May 23, 2008

Get paid to quit your job

I haven't used Zappos, but apparently it's an online shoe store that has really good customer service. How do they get it? By paying employees to quit. After four weeks training (at full pay) and one week on the job (also full pay), they offer employees $1000 to leave. And as the company has grown, the amount they pay quitting employees has risen. The argument is that they only want really dedicated people, and what better way to test dedication than paying someone to leave? The problems as I see them are:

  1. Better workers are more likely to leave. The $1000 is a lot more tempting when you expect a month-long job search than when you expect a yearlong search.
  2. People who know they will hate the job might be willing to go through the five weeks to get the $1000 payoff.

The benefits:
  1. The aforementioned weeding out of the undedicated. I find the whole company loyalty thing vaguely creepy, but I can see why they would value it.
  2. Cognitive dissonance will lead the employees who stay to be happier and more dedicated than they otherwise would have been. With absolutely no data, I declare this to be the most valuable effect of the program.
  3. There will be threshold/snowball effects that make employees happier more dedicated still.
Things I would have to know before declaring this a good program:
  1. What employees who take the buyout go on to do
  2. Comparison of any quality metrics between employees who stay and those who go.
  3. Average tenure of employees who stay, compared to similar jobs elsewhere
  4. How much does the program cost Zappos (compared to the benefits calculated from the above data points)
  5. I'd like to know the wages of the Zappos employees, but honestly, all the other data captures the relevant points better
If I remember correctly, Zappos is the same company that pays you if you return shoes. That is a piece of brilliance. Assuming they have some kind of metric to prevent serial returners, it's a great way to demonstrate confidence in their product and compensates for one of internet shopping's big costs, and on the way leads to a lot more impulse purchases.

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