Amazon offers employess $5,000 to quit

[MissStache]

An interesting article passed along by my boss talks about Amazon's "incentive" program where they offer employees a $5,000 bonus to quit working.  Jeff Bezos says it is to test employee loyalty:

“Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. ... The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”

The article goes on to mention that $5,000 is enough for most people to survive for 3-4 months, which I actually though was pretty generous for non-mustacians!

Here's the full article: http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/Pay-to-Quit-Bonuses.aspx

Would you quit your job for $5,000?  I wouldn't quit the one I have now, but I've had a few where I would have jumped at the chance, so perhaps it is a good way to test loyalty and job satisfaction! 

[Cheddar Stacker]

Obviously it depends on how much you enjoy your work, but putting that aside this is all relative to how much money you are currently making. At the beginning of my career with new grad wages $5K was like 2-3 months pay, and now, not so much. My earning potential is too high to leave on the table for that kind of cash. I would gladly leave now for $100K+, and I may have that opportunity in a few years so we'll see what happens when faced with that kind of decision.

Interesting concept though. It's completely backwards from the normal mentality of "we need to do everything to make sure our employees stay."

[vern]

Bezos definitely marches to his own beat.  Seems to be working for him!

[Workinghard]

I wonder what kind of references Amazon gives the employees that leave...

[MissStache]

I wonder what kind of references Amazon gives the employees that left....

It may be nothing.  I know my (very large) company can only confirm work dates- they won't say anything about the reasons that someone left, or even if they were fired or not.  They certainly won't speak about performance.

I think many major corporations have that same type of policy for legal protection.

[dragoncar]

It may also have something to do with this:

A typical unemployment claim against a business increases the amount that business pays in state premiums in a range of $4,000 to $7,000 over a three-year period, said David Prosnitz, owner of Personnel Planners, a company based in Chicago that fights 15,000 unemployment claims a year for its 1,000 business clients. But it can be much worse.

http://www.nytimes.com/2011/10/20/business/smallbusiness/managing-unemployment-premiums-in-a-time-of-joblessness.html

I wonder what kind of references Amazon gives the employees that left....

It may be nothing.  I know my (very large) company can only confirm work dates- they won't say anything about the reasons that someone left, or even if they were fired or not.  They certainly won't speak about performance.

I think many major corporations have that same type of policy for legal protection.

This is standard operating procedure for large employers.  I never really got the hang of getting employment references for this reason - awkward to ask supervisor for reference when you know they could get fired for giving one.  Most of my references ended up being academic/volunteer work.

[TrMama]

Hmm, I think offering someone $5K to quit is a better test of how healthy the local job market is. I wouldn't quit for $5K because that's about 6 weeks salary for me. I'm not sure I could find a job that pays the same as my current one in 6 weeks.

Of course, if I had an offer on the table, or was about to FIRE, I'd absolutely try to time things to get both the incentive payment and the new job/FIRE at the same time.

[oldtoyota]

I think Bezos got the idea from Tony Hsieh, who offered $2,000 to people who quit after the training program at Zappos.

[Zaga]

We were just offered 6 month's salary to quit (or more for people who had been there longer than 10 years), plus 6 month's cobra.  I took it, I've been planning on switching careers, so this is an amazing opportunity to get my backside in gear and go for it!

[Cheddar Stacker]

We were just offered 6 month's salary to quit (or more for people who had been there longer than 10 years), plus 6 month's cobra.  I took it, I've been planning on switching careers, so this is an amazing opportunity to get my backside in gear and go for it!

Awesome. Congrats! Good luck with with the switch.

[Ian]

I don't know what kind of money these employees are getting, but wouldn't $5000 be a relatively small amount of money compared to a year's salary? Unless you had another career lined up, I don't think it's much of an incentive. A test of short term thinking, perhaps.

[Thegoblinchief]

$5K to blindly quit is just dumb.

But if I was ready to FIRE or had a job lined up? Why the heck not?

[Zaga]

Yeah, if I was only being offered $5K, I would not be quitting without a job lined up.  6 month's salary is significantly more than $5K, even for a low paid lab rat like me!