Organizational Change Readiness Diagnosis at Amazon

Introduction

Amazon is known for providing employees with a harsh workplace environment and a high level of attrition (Kantor & Streitfeld, 2015). Changes in HR policies and strategies — such as adopting a more flexible approach to employee personal issues, management by walking around, and increasing recognition for employee hard work and achievements — may result in positive outcomes. Research has clearly indicated that when employees feel their employer cares, they display higher levels of commitment and productivity compared to employees who do not feel cared for (Buchanan & Huczynski, 2011). This can enhance productivity even in demanding working conditions (McGregor & Doshi, 2015). To assess whether this is a viable strategy, the firm's current situation and its readiness for change are examined below.

Background to Amazon

Amazon was founded in 1994 by CEO Jeff Bezos and is a major online retailer operating internationally. With headquarters in Seattle, Washington, the firm has operations in 17 different countries and pursues aggressive growth strategies that will see it expand further in the future (Amazon, 2016). Employing approximately 230,800 people, mainly in large warehouse locations (Amazon, 2016), the firm faces high HR costs, which may represent significant opportunity costs if employee productivity is not being maximized.

It is apparent that the firm is not fully maximizing productivity through its HR policies, even though it has developed very efficient operational processes (Rossman, 2014). Amazon has very lean operations, particularly in its warehouses, where processes are highly automated and employees have little empowerment (Daisey, 2015) — an approach aligned with scientific management principles (Taylor, 2012). The operational focus is on efficiency and customer satisfaction (Cheng, 2015), meaning employees are expected to work long hours without allowance for sickness or family emergencies. Many employees have identified these expectations as major difficulties. Additional workplace practices perceived negatively by employees include an anonymous feedback system through which employees are encouraged to leave comments on their peers — feedback that is typically negative (Kantor & Streitfeld, 2015). This anonymous feedback is considered harmful, as it is often used in employee appraisals and as a basis for remedial management action (Kantor & Streitfeld, 2015). Examining Amazon's approach to HR reveals clear reasons for change.

Reason for Change

Amazon places customer needs before employee needs (Cheng, 2015); however, this does not mean the firm should completely disregard employee welfare. Bezos has defended the corporate culture, arguing that the poor HR cases cited in negative press coverage were not typical of the firm (BBC News, 2015). Nevertheless, it is possible that Bezos is unaware of how his own policies translate into day-to-day practices, given the high pressure he places on management. A shift in HR strategy that allows employees to feel more valued is likely to produce more positive workplace behaviors, including higher commitment, increased productivity, and reduced attrition — all of which create value for the employer (Cook, 2008). Such change could therefore support value creation, boost productivity, and reduce recruitment costs.

Internal dissatisfaction has become public knowledge following the publication of negative articles about Amazon's culture (Cadwalladr, 2013; Kantor & Streitfeld, 2015). This carries reputational costs: a poor reputation for employee satisfaction can make it more difficult to recruit high-quality staff (Armstrong, 2011), as fewer strong candidates will be attracted to an organization known for its harsh culture.

Negative publicity may also suppress consumer demand (Kotler & Keller, 2011). While improvements in HR practice may not necessarily increase sales directly, they may serve as a protective strategy by preventing further damaging articles and the associated loss of revenue.

Conclusion

While Amazon may benefit from organizational change toward a more considerate approach to employees, it does not appear that the organization is currently ready for such change. Lewin (1951) argued that change will only occur when the pressures for change are greater than the resistance to it. With senior management and the CEO actively resisting change, it is unlikely that any such initiative would be successfully implemented. This view is reinforced by Kotter (1996), who argues that senior management must visibly support change — not only for its psychological impact on employees, but also because of their authority to allocate the necessary resources.

Therefore, before any change is implemented, further preparation within the organization is essential to create conditions more conducive to successful change. This includes winning over the CEO and senior management by demonstrating why and how change will be beneficial to the organization, its customers, and its employees (Lewin, 1951; Luscher & Lewis, 2008). Only after these preconditions are met can change be implemented with a reasonable prospect of success.