Would You Quit Your Job for $5,000?

Recenty, Amazon.com CEO Jeff Bezos revealed a unique program initiated by the online retailing giant: it will pay employees up to $5,000 to quit. The move is not about shrinking its payroll. In fact, Amazon is in the process of expanding its ranks. Instead, the “Pay to Quit” program is intended to measure employee loyalty. In a letter to shareholders, Bezos explained:

The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company.

While the company has experimented with similar offers in recent years, it rolled out the program to its 40,000 warehouse employees in January. To date, fewer than 10 percent of employees who received the offer took it and left the company. However, employment authority John A. Challenger, chief executive officer of global outplacement and employee coaching consultancy Challenger, Gray & Christmas, Inc. in Chicago, wonders if $5,000 is enough to embolden disengaged employees to leave.

“That amount may cover expenses for two or three months, but with unemployment lasting about four months for those out of work, employees who take the deal may fall short of their financial obligations, unless they have an ample rainy-day fund established,” said Challenger.

According to the latest data from the Bureau of Labor Statistics, the median duration of unemployment for those seeking jobs in March was 16.3 weeks. “This certainly is the type of novel approach to workplace issues that we have come to expect from tech companies. There may be more effective ways to gauge and build employee engagement and loyalty, and it is likely that Amazon has many other employee engagement and loyalty programs. As Bezos acknowledged, it is better for both the employer and the employee if that worker truly wants to be there, but there are always going to be some workers who are simply happy earning a steady paycheck,” said Challenger. Should employees accepting “Pay to Quit” offer conceal this fact from potential employers? What other ways can companies measure and/or develop employee engagement and loyalty?