There was something missing from last weekend’s NewYork Times hatchet job on Amazon.
Within the 5,400 word piece were many accounts of 24/7 performance
monitoring, celebration of conflict, encouragement of backstabbing and
employment practices that if not discriminatory were certainly highly biased
and near unbearable. But nowhere did the
piece answer the questions I kept asking myself: are these kind of Hunger Games working
conditions necessary to drive business results in the 21st century? Are the Amabots the future of work?
Greedy time-travelers: buy Amazon shares back then!
Certainly, Amazon is stunningly successful and relentlessly
innovative. In the past month alone
Amazon launched or expanded three new services, piloted two shows and launched
another, created 1,000 jobs at a new fulfillment center, exceeded Black Friday
sales with their first Prime Day and announced second quarter sales up 20% to
$23.18 billion. The Times’ slating did
not have much if any financial impact. In
the first day of trading following publication,
Amazon’s stock went up 124 basis points (which sounds impressive until you
realize that the stock has risen 7,246 basis points this year – 75 basis points
a day on average).
And, of course, customers love Amazon. Has anyone reading this post never bought
from Amazon, from their delivery services, their online media streaming, their
Amazon Web Servers (AWS) or any other of their hundreds of product and service
lines? Amazon can accurately claim to
be Earth’s most customer-centric company because it gives us what we want faster, sooner,
now. AWS is not just cost-effective, it’s
an extremely high-quality, high-reliability business service. We all know about the retail arm of the
business. One-click ordering and our
wishes are on our doorstep. An Amazon
operations executive quoted in the Times piece was not wrong to use words like “futuristic”,
“magical” and “solving a really practical need” to describe how she arranged
for delivery of a sold-out Frozen doll within 23 minutes flat. Manyof us may be intermittently appalled at some of the company’s management
practices, but it doesn’t change our shopping and business sourcing.
So, Amazon is ruthless and Amazon is successful. But is that combination necessary to achieve great
results for shareholders and for customers?
Let’s look at two aspects of the Amazon way which attracted the most recent
attention: continuous performance feedback and a pugnaciously up-or-out
culture.
“It’s as if you’ve got the CEO of the company in bed with you at 3am”
Continuous performance feedback was dreamed of by the original time-and-motionproto-management consultants over a century ago, but it had to wait until
the internet got onto portable devices to be fully realized. Today arash of companies offer software that
tracks employee activity, monitors progress against goals in real time. Proponents claim that everyone wins:
employees get increased clarity, engagement, meaning, even inspiration; the
business gets to see who is really performing, and– let’s be honest – gets more
work done with fewer people in a shorter time.
There’s a lot that’s good about this kind of micro-alignment
of strategy and execution, especially for product-based or remote-working companies
where work consists of processing, programming, delivering on concrete
objectives (it might not be so useful if you’re in a relationship-based
business). High clarity is close to a
necessity for well-functioning work, and if used well these tools can help
everyone know what’s expected of them, fix mistakes in good time, focus on what
matters most. If KPI’s worked well for
you in the last century, chances are continuous performance feedback could help
today.
But Amazon takes even this obsessive technology to new
heights. At Amazon there is a constant
flow of feedback, metrics, ratings. Some
of it is just a ratcheting-up of standard practices – 60 page lists containing
thousands of performance metric data points instead of a cozy Facebook-style goal
progress interface. Some of it, though
is simply toxic. The Anytime Feedback
Tool differs from competitors’ products in allowing comments to be anonymized
in practice (comments go directly to a manager who does not have to reveal the sources
to the individual concerned). In
addition, it seems to have been designed without any boundaries to the kind of
feedback that can be given – the user guidance allegedly includes sample
comments such as “I felt concerned about his inflexibility and openly
complaining about minor tasks”.
It’s one
thing to encourage feedback on specific work activity (“I felt concerned when
he greenlighted the next stage of the XYZ project, since the tech team had not
yet completed debugging of the current build”).
It’s another to talk suggestively about “inflexibility” or “earning
trust”. Such a loosey-goosey system,
especially when its outputs are often used directly as evidence for performance
reviews, can result in discrimination, back-biting and politicking instead of reliable
performance evidence. Never mind the
legal risks, this damages the quality of the inputs on which decisions are based,
a critical blow for a company that prides itself on getting ahead by dominant
use of data analytics.
Amholes, but only for a season
One big use of those data analytics is informing personnel
decisions: who gets a raise or a promotion, who stays, who goes. More people leave than stay or get a raise at
Amazon – a surveyby PayScale ranks the company #464 out of the Fortune 500 in employee
tenure, with the average Amazonian staying just one year. The use of stack-ranking – listing employees
in a division or work-group in order of performance then firing the bottom
tranche – means that turnover is institutionalized and even stars fear
constantly that they will lose their jobs, perhaps by falling victim to the
politics playing out around the Organizational Level Review, when performance
is debated and the losers are out the door.
One particularly nasty twist picked up by the Times was the practice of
sabotaging a colleague in order to get his or her talented direct reports on
your own team. As one survivor put it, “You learn how to
diplomatically throw people under the bus.”
Amazon officially is fine with this level of “Purposeful
Darwinism” as a former top Amazon HR exec put it. They appear to distrust innovations in
data-driven predictive hiring and instead rely on a barrage of interviews to
select candidates, then measure how they perform on the job and fire them if
they don’t work out. Ex-Amazonians don’t
suffer too dreadfully in the marketplace, as evidenced by the long list of ex-Amazonentrepreneurs and the number of Amazonians riding thecommunal bicycles at Facebook and learningto Zumba at LinkedIn.
The company’s
attrition rate is also not way out of line with the industry. In the PayScale survey the 462nd
ranked company was Google, with scarcely a month’s longer average tenure, and
the Fortune 500 leader in employee retention was that cutting-edge Wall Street
darling Eastman Kodak. In such a
fast-moving business, tomorrow’s people may be very different from those you
need today and aggression may drive people to work harder, smarter and longer. As Jeff Bezos said in his 1997 letter to
shareholders, “You can work long, hard, or smart, but at Amazon.com you can’t
choose two out of three”.
Perhaps most people want that choice. Amazon has its work cut out in hiring. Sourcing for jobs is now country-wide and
more than 4,500 jobs are open at head-office.
Issues in warehouse hiring have been eased by the introduction of 15,000 robots, but gaps
remain and working in an Amazon warehouse is often seen as a job of last
resort. Even a generousinitiative to pay upfront 95% of tuition for a range of qualifications
leading directly to in-demand jobs has failed to attract workers – in the 3
years during which the program has been running only 2,000 people have signed up
worldwide and Amazon does not reveal completion rates beyond boasting of the
first employee to finish and start working in her community as a nurse.
Luckily, Amazon does not need that many people, or the same
people for more than short bursts. Its
business is changing so rapidly, talents that are essential in 2015 may be
irrelevant in 2020. And a fraction of
the workforce welcomes the competition and pressure. If Amazon can automate and distill work down
so it can be done by a few pugilists, their business model may be – and, let’s
face it, has been – robust.
Is Amazon the future?
Of course, what concerns all of us is the usual WIFM – is
Amazon showing the way in human resource practice? Will I have to turn into an Amabot or an Amhole in a few years simply to keep my
job?
Sadly, the answer is “perhaps”. With the globalshift of wealth and power from workers to owners, and the spread of workplace
technology in terms of robots, continuous-management software, big data
analytics and increasinglyintelligent cloud robotics and deep learning systems, even highly
cognitively demanding, non-routine work and tricksy manual work may be vulnerable
to being digitized or, at the very least, subject to the micro-controls Amazon
has introduced.
There’s also the “gig economy” factor. With Gen Y happy to work in bursts, with the
rise of Uber and with businesses getting increasingly granular about their
human capital needs, it is possible that the Amazon model of working in short,
intense bursts will become the 21st century equivalent of the 9 to
5.
But even if we become machines, we do not need to become
monsters. Human decency – empathy – is a huge evolutionary advantage and it makes the
world a better place to live and work in.
While we can’t expect the short-term-focused financial markets to
recognize that, we can expect businesses who want to be around for the long
term to take such a powerful factor into account in their strategic
planning.
To achieve that, we in HR need to show them the numbers:
commission high-quality research that examines the impact of empathy in the workplace,
get the right metrics in place to show the power of positive dissent and the
increased productivity from engaged, supportive teams, state our case for
compassion in numbers-driven and action-focused terms.
We also need to recognize that these
conditions may not apply everywhere. In
some business sectors or functions Amabots may be the right answer for everyone
concerned, including the employees. It isn't the only answer, unless we fail to investigate all the other options. If we do, we may as well resign ourselves to
a future as Ambots and invest now in a company that threatens to define
workplace excellence as the ruthless exploitation of human lives.
