Problems and Potential Solutions for HR at Amazon

¶ … HR Polices at Amazon

Amazon are known as a successful firm, over the past five years the organization has increased from 28,000 employees to more than 183,000 (Carney, 2015). Human resources (HR) polices of the firm are highly reflective of the CEO Jeff Bezos, who believes in putting customer needs before all others, including concerns for the employees, while expecting employees to work hard, be committed, frugal, be willing to disagree and admit mistakes, as well as deliver results (Amzon, 2016). These are aims which may be argued as present in many firms; the difference with Amazon are the policies in place to achieve these aims. Amazon is known to be a harsh workplace (Kantor & Streitfeld, 2015). The firm expected a high level of commitment from staff, often worming more than 10 hours a day, in a workplace which is highly mechanized (Daisey, 2015). The job design is associated with scientific principles of management, where employees have strict work performance targets and no empowerment. Many shop floor workers simple stand and unload goods for packaging from an automated system bringing racks to them.

However, it is not the job design and the aims, but the way in which they are operationalized which may be seen as most controversial. Bezos believes that employees have learned bad habits from previous employers, and have to relearn positive workplace practices, which include working harder and being able to hit the wall and carry on (Kantor & Streitfeld, 2015). This approach may be seen as highly aligned with MacGregor's theory X, where employees are perceived as inherently lazy (Buchanan & Huczynski, 2011). The lack of trust in employees is also demonstrated by the secret feedback mechanism where peers can anonymously criticize each outer, with the criticisms being used on performance reviews (Kantor & Streitfeld, 2015). It may be argued that the feedback could be positive (Rossman, 2014), and some is positive, but human nature leads to more complains rather than compliments, even if they are not justified. The harsh approach to employees is also seen in the way work is expected to come first, there are tales of employees being expected to return to work within days of receiving cancer treatment of having a still birth, and being placed on review as they have had low performance (Cadwalladr, 2013; Kantor & Streitfeld, 2015).

There are some policies put into place to encourage employees. There is a share ownership scheme, but the vesting is slow, only 5% after the first year, 15% in the second year, 40% in the third year, and 40% in the fifth year (O'Donovan, 2015). The firm has also invested in some measures for employee comfort, such as spending $52 million on air conditioners for the Pennsylvania distribution center (Fox, 2015). However, this was only after the harsh working condition were reported on the local news, and it should also be remembered the firm choose not to install these when they built the center (Fox, 2015). This indicates the way there is minimal investment in the frim, without the presence any significant training and development programs, or job enhancement programs.

This leads to a position where the firm has received a high level of negative publicity (Cadwalladr, 2013; Kantor & Streitfeld, 2015; Lucas, 2015), and has a very high attrition rate, the second highest of the Fortune 500 (Fox, 2015). This leads to a position where there is a potential for improvement, especially as when examining the financial positon of the firm, these practices are not leading to superior profits; Amazon has a gross profit margin of 33.27% and net profit margin of 1.03% compared to industry averages of 36.86% and 7.25 respectively (MSN Money, 2016).