Amazon Announces Changes to Their Employee Review System
Amazon has experienced huge growth as a company since it first emerged in 1994. As “the world’s largest retailer,” it currently employs over 300,000 people worldwide. Now, the company has announced that it’s doing away with their old forced ranking system and implementing a new review process in its place.
Here’s why you should care, even if you don’t work at Amazon.
Jeff Bezos and Risk-Taking
As a result of his company’s success, Amazon’s CEO, Jeff Bezos, ranked No. 2 on the Forbes 400 list this year, just after Bill Gates in terms of net worth. Bezos is reportedly worth about $67 billion. According to Forbes, about $20 billion of that came over the past year or so. This was due, in large part, to the cloud-computing unit, Amazon Web Services. Bezos reportedly shared at the 2016 shareholders meeting that Amazon is the fastest company ever to reach $100 billion in annual sales.
However, Bezos cautions that gains like these don’t come without risk of failure.
“We are the best place in the world to fail (we have plenty of practice!),” Bezos wrote in his last annual report, according to Forbes, “and failure and invention are inseparable twins.”
There is so much that could be said about this leader (his recent trouble with President-elect Donald Trump is pretty interesting, not to mention his keen interest and investment in space travel) but one theme emerges no matter your perspective. Jeff Bezos takes risks, and he also learns and grows and adapts systems as needed. This is not a man who gets hung up on doing things the way they’ve always been done. Instead, he does just the opposite. He questions norms, and he implements changes and advancements as he sees fit. Often, these moves seem to pay off in the end.
The New York Times’ Criticism of Corporate Culture at Amazon
So, it’s not surprising that last year when The New York Times published a fairly scathing piece about the culture at Amazon, Jeff Bezos was quick to take note, and to respond. He may not have agreed with all of the critiques. But, he showed he took them seriously by circulating an internal memo stating, “I want you to escalate [issues] to HR.” He asked that employees email him directly if they experienced “shockingly callous management practices” like those described in the article.
Amazon has announced some changes since the Times article. First, a new parental leave policy offers 20 weeks of paid leave, six of which can be shared with a partner or spouse. Also, Amazon experimented with a 30-hour work week for employees in a pilot program, who worked for 75 percent of their salary but retained full benefits. And now, employee reviews are on the table.
Forced Rankings Are Over at Amazon
Many organizations are rethinking employee reviews. Forced rankings, a system born in the ’80s, in which employees are weighed against one another and only a small percentage receive top accolades (and often an accompanying raise), can crush morale, hurting overall performance and job satisfaction rather than helping it.
In recent months, many companies have decided to do away with the system in favor of something more effective. Now Amazon is one of those companies. As one of the largest employers in the world, this move could help set a precedent for others to follow.
It’s unclear how exactly Amazon plans to change the process, but the current system is definitely a thing of the past. A new employee review process is expected to be rolled out in February of this coming year. In a statement released to GeekWire, as well as several other media outlets, Amazon said the following:
“We’re launching a new annual review process next year that is radically simplified and focuses on our employees’ strengths, not the absence of weaknesses,” the statement read. “We will continue to iterate and build on the program based on what we learn from our employees.”
This latest move by Amazon is yet another attempt to improve the company’s reputation, and hopefully the working environment as well. If they’re successful, it’s reasonable to expect that other companies might learn from their example, and make some changes to their review processes as well.
Tell Us What You Think
How do you think this change will impact Amazon? We want to hear from you! Leave a comment or join the discussion on Twitter.