Commentary
5/22/2008
05:47 PM
Fredric Paul
Fredric Paul
Commentary

Why You Should Pay Your New Hires To Quit

No, this is not a joke. Online shoe-retailer Zappos.com actually offers its trainees $1000 to quit after the first week. And The Harvard Business Review explains why it's a good idea.



No, this is not a joke. Online shoe-retailer Zappos.com actually offers its trainees $1000 to quit after the first week. And The Harvard Business Review explains why it's a good idea.Here's the idea, according to Bill Taylor at Harvard Business Publishing:

Zappos -- a $1 billion online retailer of shoes, handbags, and clothing -- prides itself on its culture of personalized customer service, with "no scripts, no time limits on calls, no robotic behavior." To make sure that customer service agents can deliver on the company's promise, Zappos starts off its new hires with a 4-week training period. And then it gets interesting:

"After a week or so in this immersive experience, though, its time for what Zappos calls The Offer. The fast-growing company, which works hard to recruit people to join, says to its newest employees: If you quit today, we will pay you for the amount of time youve worked, plus we will offer you a $1,000 bonus. Zappos actually bribes its new employees to quit!"

Why? Because if youre willing to take the company up on the offer, you obviously dont have the sense of commitment they are looking for.

A thousand bucks might seem like a lot of cash to pay someone to go away, but what's the real cost of an employee who'd rather have a quick hit of cash instead of committing to your company and its values? This way, if it's not a good fit, everybody knows sooner rather than later, and walks away with no hard feelings.

In fact, "Zappos CEO Tony Hsieh may well go higher than $1,000 as the company gets bigger (and it becomes even more difficult to maintain the all-important culture and obsession with customers.)"

The most important part of being a good manager is having the right people, and I think innovative ideas like this can go a long way toward creating a company culture that can help small and midsize companies stand out. And actually implementing this policy would be a lot easier for smaller companies than for large enterprises.

I'd love to hear more innovative management ideas that SMBs can use to run rings around the big boys.

Note: Thanks to this Freakonomics post for turning me on to this story.

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