Why Zappos Pays People to Quit

Dan Percival
Aug 1, 2017 · 2 min read

Getting paid is one of the strongest motivators to get up and go to work everyday. But it has never been used as an incentive to quit a job; Zappos has changed that.

Zappos comes from humble beginnings, starting off in 1999 as an online shoe retailer because one of the co-founders could not find the right color shoe he wanted. Nowhere in that plan did they expect to redefine employee commitment. The focus of this post is not to go down the HR rabbit hole that Zappos has become, but to focus on one aspect of their HR policy that offers beautiful insight into how Zappos has dominated the concept of employee engagement.

Call centers are a staple among online retailers, receiving complaints, solving problems, and helping customers in anyway possible without being in the same room as them. And if you have ever worked in a call center, you know how dismal they can be. Zappos debunked that theory and runs one of, if not the most effective call centers in the country. They accomplish this lofty goal by establishing a set of standards, or lack thereof, for their employees. There are no scripts or time limits on these calls, the employees are trained to be friendly and accommodate any request to the best of their ability.

During the month long training to operate a phone at Zappos, everything is stopped and each employee is offered $2,000 to quit on the spot. The CEO, Tony Hsieh, believes that this is an optimal way to offer an out for any trainee who is feeling overwhelmed by the training or culture and is too nervous to quit on their own, or for anyone who feels they simply won’t be a perfect fit in the company. Beyond the first month of training, every employee is offered a quitting bonus starting at $2,000 and increasing by $1,000 every year, capping at $5,000. This prevents any employees staying too long and burning out, and offers employees the chance to leave the company on a positive note. This strategy means that every employee that leaves their company has a positive experience and shares this sentiment with their friends, bolstering Zappos public image.

As any management aficionado knows, deeply engaged customers can only be obtained through deeply engaged employees. Zappos proves that every day by providing stellar customer service, and in return receiving dedicated customers who refuse to take their business elsewhere. They provide a culture that has employees turning down thousands of dollars NOT to work, we can only hope to emulate them.

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