In 2014, tech giant Amazon introduced a unique programme designed by their CEO, Jeff Bezos, to retain loyal employees who wanted to build their career at the company. Bezos offered employees an incentive of up to $5,000 (about Rs 4.1 lakh) to quit the company annually. His unorthodox leadership strategy was dubbed the 'Pay to Quit' offer and was designed to ensure Amazon maintained a dedicated and enthusiastic workforce.
In a letter to investors, Bezos said he wants to motivate people to pause and consider what they truly desire. In the long run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company."
Zappos, an online shop in Los Angeles, had this idea before Jeff Bezos adopted it. The 'Pay to Quit' offer was usually made once a year after peak seasons such as the Christmas holidays, but was suspended last year due to labour shortages amid the global e-commerce surge prompted by the Covid pandemic. Amazon now only offers this incentive to graduates of its Career Choice upskilling programme. As an Amazon representative Karen Riley Sawyer explained to The Information, the offer is meant "to support [graduates'] transition to a new career should they choose to leverage their new certifications."
Behavioural economist Uri Gneezy found the 'Pay to Quit' strategy to be "remarkably effective." According to Gneezy, "In many organizations, dissatisfied employees have no reason to disclose their true sentiments, but you can incentivize them to do so by offering them money to resign, making it costly for them to be dishonest." He further explains that one outcome of this strategy is that those who stay are more motivated, and that those who turn down the offer invest it in their future with the company, "boosting their productivity and commitment."
Jeff Bezos' 'Pay to Quit' offer is an unusual way to keep employees, but it’s proven to be really effective. This approach gives workers a bonus to think about their careers, and the ones who stay are happier and more dedicated to their work. By offering this incentive to graduates of its Career Choice upskilling programme, Amazon continues to ensure that it maintains a workforce that is dedicated and enthusiastic.