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Hundreds Leave "Boss-less" Zappos As "Get-Paid-To-Quit" Scheme Backfires
Many workers dream of one day being their own boss. At online clothing retailer Zappos — an independent subsidiary of Amazon — employees can realize that dream via the company’s “Holacratic” corporate culture. Holacracy is, in the words of CEO Tony Hsieh, “a system that removes traditional managerial hierarchies allowing employees to self-organize to complete work in a way that increases productivity, fosters innovation and empowers anyone in the company with the ability to make decisions that push the company forward.” So essentially, it’s a boss-less structure aimed at driving productivity and innovation by allowing employees to take ownership of their respective goals and responsibilities.
On the surface, one might imagine that everyday employees would be thrilled to work in an environment free from overbearing supervisors (that class of non-farm laborer who, in America, is enjoying record wage growth even as those they manage have seen their pay stagnate) harboring false notions of superiority. This is probably why Hsieh felt comfortable distributing a memo which criticized the company’s lack of progress in shifting to a completely Holacratic structure, to Zappos’ 1,500 employees.
In the memo, Hsieh essentially gives employees a deadline for full implementation before reminding them that they are free to take “the offer”, a reference to Zappos’ practice of offering to pay employees to quit. The rationale behind the practice is to ensure that everyone who works at Zappos truly wants to be there. Historically, only around 1-3% of employees accept the pay-to-quit proposition and as such, it likely came as quite a surprise to Hsieh when more than 200 people chose to take the money and run rather than work in an environment with no managers. Here’s WSJ:
About 14%, or 210, of the company’s roughly 1,500 employees have decided to leave the firm, according to Zappos. The exodus comes amid the company’s transition to an unusual management structure called Holacracy, in which employees essentially manage themselves, without traditional bosses or job titles.
The company has acknowledged that the transition to this new form of self-management has been a difficult one. In March, Mr. Hsieh sent a 4,700-word memo to staff stating that Zappos, an independent subsidiary of Amazon.com Inc., was taking too much time switching to this new management structure. He offered all employees at least three months’ severance if they decided by April 30 that working in Holacracy was not for them.
In its training for new hires, Zappos promises a month’s pay to anyone who decides the company’s playful culture, in which employees have dressed up in animal costumes during the firm’s all-staff meeting, isn’t for them.
Here are excerpts from Hsieh’s memo:
We’ve been operating partially under Holacracy and partially under the legacy management hierarchy in parallel for over a year now. Having one foot in one world while having the other foot in the other world has slowed down our transformation towards self-management and self-organization. While we’ve made decent progress on understanding the workings of the system of Holacracy and capturing work/accountabilities in Glass Frog, we haven't made fast enough progress towards self-management, self-organization, and more efficient structures to run our business. (Holacracy is just one of many tools that can help move us towards self-management and self-organization, but simply abiding by the rules of Holacracy does not equal self-management or self-organization.)
After many conversations and a lot of feedback about where we are today versus our desired state of self-organization, self-management, increased autonomy, and increased efficiency, we are going to take a "rip the bandaid" approach to accelerate progress towards becoming a Teal organization (as described in the book Reinventing Organizations)...
Teal organizations attempt to minimize service provider groups and lean more towards creating self-organizing and self-managing business-centric groups instead. As of 4/30/15, in order to eliminate the legacy management hierarchy, there will be effectively be no more people managers…
Self-management and self-organization is not for everyone, and not everyone will want to move forward in the direction of the Best Customers Strategy and the strategy statements that were recently rolled out. As such, there will be a special version of “the offer” to everyone who reads Reinventing Organizations and/or meets some other criteria (outlined towards the end of this email).
We’re sure there are lessons in here somewhere both about workers’ desire for guidance and structure and about whether it’s a good idea to force people into choosing between a seemingly unpopular ultimatum and free money, but we’ll leave you with the following gem from the Zappos employee who we cannot say is “in charge” of the transition to Holacracy because to say that would be to violate Holacratic principles, so we’ll just say he’s ‘interested’ in facilitating the transition:
“Whatever the number of people who took the offer was the right number.”
It's hard to argue with that.
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You say all that as though it were a bad thing.
Personally, I look good in gray blue coveralls. They cover my problem area.
And Gruel Thursdays in the factory chow hall is the high point of my week.
We've arrived when the new business model realizes it doesn't need to distribute all the profits to the owner.
Just one phrase can get you through life: "Be of value".
Idiocracy at its best
Amazon should offer CEO Tony Hsieh $25 million to quit...
Changing social mood is cause and catalyst for current negative behavior in business and politics. This kind of anti-establishment behavior is anticipated by socionomists...
http://www.globaldeflationnews.com/recognizing-changing-social-mood-is-k...
I wonder how many of the good workers left.
Smart move because you will be paid just like the laziest and you will NEVER BE REWARDED EVER.
Go flip burgers, they have a structured careeer path we are told where you can get a title and earn more than those who are only in it for the paycheck.
This idea could be used a great tool of "reverse psychology"... A company wants to eliminate 15-20% of it's useless eaters and offers to pay them to quit based on their(the employees) dissatisfactions with company policies.
They think they're getting paid for superior performance and differing ideas, but really they're getting paid because of their lack of skills and performance. It's taking the trophy for everyone "win or lose" progressiveness from the playing field to the office.
Companies used to call this severance, and it was generally reserved for long time employees and upper management.
YenCross not sure I see the difference in getting laid off except it sounds like a government program to offer voluntary incentive severance pay (VISP)
Reminded me of this theory that Asian did not cross the straight to Alaska over Ice but actually drifted in boat for thousands of years establishing DNA all over the world. The natural currents of the Oceans pull boats everywhere and you can fish for food along the way. China is famous for ships and maps and American Plants on their shores. Later the sails cam in.
But think of Useless Eaters: either war or send men off in ships or boats. Eventually DNA shows men and women came from Taiwan, China, Korea, even Thailand, Vietnam.
They even found Asian DNA in the Azores.
Populations as big as the USA cause problems in concepts of what to do with workers that aren't productive or don't have garden plots or farm fields.
Put them on boats to become men, explorers, to establish new villages, travel the oceans, then they follow rivers even in the Americas, even like the Mississippi.
What will we do? Send men to War or ship them into space.
Or try to tame men with new laws, new stronger State Authorities. Obviously led by Ivy League and their wealthy Patriarchs.
Hsieh's DNA is all over the planet?
Zappo's sells boat shoes or hires boat people?
One aspect to not having managers is that even if you can differentiate yourself, how do you advance? I don't know, it sounds a little socialistic to me.
Playful culture? Dressing up as animals? Sounds like a good idea was ruined by people who should be in kindergarten
Furbies at work?!! *shudder*
GGGgggeeezzzuuusss H C what a bunch of altruistic non- senseical crap.
HOLACRATIC ?
Self organizing ? (too many people running around in circles w/ their heads cut off already)
Great Leadership example !
Put this country out of it's misery please...
Loonies's running & ruining the show
Bring on more Clowns...
I can't wait until the USPS tries this! Oh, boy!!
Dear Mr. Hsieh:
you are a fucking idiot.
Last month I implmented the same plan with my Lab/retriever Service puppy in foster training.
The result is pretty much the same thing: a mess.
Management requires a certain temperament, skill set, and other traits that are not extant in most human beans.
My good neighbor and long time companion, Budgie Twitters, says that the typical ladder of advancing to higher levels of authority in a structured environment, will promote a majority of people into "management" who have no business anywhere near telling another human frijole what to do.
The understanding of human bean nature is mandatory and most people know nothing much about themselves, let alone other people.
That's why "management" is typically higher paying in many organizations, although those chosen to occupy the position----mostly determined by tenure, rather than raw talent, experience, and past success in managing others----have no business being there.
Managing people successfully, is the most difficult job on earth.
"human beans" ???
Please tell me this was a 'joke'.
Of course. I confiscated it from the movie, "Little Big Man".
Dustin Hoffman and his mentor, Chief Old Lodge Skins, was teaching him something and referred to the white man as 'human beans'. At least that's what it sounds like to me when he says it.
I've used it ever since as it, I think, is more characteristic of what passes for us humans. Not so much 'beings' but as obtuse, hard, and irregular as beans.
In my career, I've quit every job I've ever had, and I've had a lot of them. Every time I've quit, it was because I had a horseshit boss. I'd get to a point where I'd need a manager to make a decision and stick with it, and inevitably, at some point, every one would eventually refuse. I would tell them that was bullshit, and I'd quit. At my last job, I'd been there 5 years and due to reorganization, was reporting directly to the CEO of the company (not a large company). He knew my value and track record. He started talking about the annual review process, and I told him if he ever told me of a problem with my work for the first time in a review, I would quit on the spot. He was very taken aback and didn't like that at all. I told him I owed him my very best effort at work, and would stake my job on it; and that required a lot of communication and judgment. I expected him to take work seriously enough to reciprocate; that's all, nothing personal, just business.
Needless to say, I was out of there pretty quickly. I went into business for myself, doing the exact same work. Except I earn twice as much money doing maybe 2/3 the work as I had done.
Management is hard. Most people aren't cut out for it. They lack the knowlege, competence, and more importantly, the confidence in themselves and their intelligence to do the work. They think there's some secret, which leads to a very lucrative market in Emperor's New Clothes bullshit books and programs. The truth is much simpler, and much harder. To be a good manager, you have to be intelligent, competent, work hard, and communicate well in both directions. It's not easy. That, in theory, is why managers get paid more.
The reality is that most managers are terrible at it.
Corporate structure and the employer/employee relationship is also usually terrible, and inherently bad for people. I ran my own business for a short time in my 20s, and while it was a disaster, I learned a lot. Afterward, I was usually the only employee who understood my pay; where it came from, what the total cost was to employ me; how much insurance cost; etc. I often knew better than the people who paid me, and I proved it on occasion. Most of my peers had not a clue. I remember one guy turning 40 and being enraged by the fact that his monthly contribution to his gold-plated health insurance policy went up to about $100. He flat-out accused me of lying when I told him he was paying about 1/8 of the cost of that policy.
The employer/employee relationship tends to turn employers into dysfunctional parents and the employees into babies. I know so many people who hate their jobs, hate their bosses, and live in fear that they'll get laid off or have their pay or position cut back. I advise them to go into business for themselves, because most of the people I know are the sort of professionals who could do that. They invariably say, "Oh, I could never do what you have done. I need the security!" Um, yeah, that security sounds great while you're taking that Zantac and Xanax, neither of which I've ever needed.
So I can see both sides on this Zappo's thing. Getting rid of standard structure and management is probably a good thing. Any program calling itself "Holacracy;" resulting in a company that can be described as "Orange," "Green," of "Teal", or involving in any way anything called "Glass Frog" has earned itself a high bullshit potentiality level, however.
I suppose such programs are necessary, though. Most business operators I've encountered can't simply tell employees what they're supposed to do and how they're supposed to do it, in such a way that the people they are willing to hire are able to do it without bullshit; whether of the Authoritarian or New Age/HR variety. Exposure to the corporate management model has turned me into an Anarchist. But to be an Anarchist requires that one take a high level of responsibility for one's self and one's actions. Most employees are unwilling or unable to do that, either.
In that case, best to take the buyout and start looking for the next dysfunctional parent to take you in.