- 1.0 Introduction
- 2.0 Literature review
- 2.1 Poor working conditions
- 2.2 Supervisor mistreatment
- 2.3 Lack of recognition
- 2.4 Lack of opportunity for professional advancement
- 2.5 Discord between organizational and employee missions
- 3.0 Conclusion
- 4.0 Bibliography
Amazon.com, Inc is one of the largest online companies today with annual revenue figures of close to $ 75 billion. With such revenue figures, one would easily conclude that Amazon’s human resource practice must be optimized to enable its workforce maintain a good track record and ensure the company gets the best input in terms of skill to ensure optimum performance. However, the opposite is quite true. Surprisingly, Amazon.com has the highest rate of staff turnover in its class of companies yet still manages to rake in huge sums in revenue. This unusual phenomenon shall be the focus of this literature review alongside trying to identify ways of remedying the situation. In addition, we shall be trying to critically analyze available literature regarding the issue of staff turnover from the company’s perspective.
2.0 Literature Review
Amazon.com was founded by Jeff Bezos in 1994 and launched operations a year later launching an online books store. Since then, the Seattle based online company has grown and diversified increasing its range of services to include the sale of not only media but everything that its clients want. This includes; hardware, clothing, spare parts, perishables and fragile goods. From an employee turnover perspective, Amazon.com has continued to perform poorly making it a target for numerous studies and inquests as people seek to find out why such a large successful company would have major issues retaining its workers. Staff hiring, management and retention is one of the most sensitive aspects that influence a company’s ability to perform well.
From a human resource perspective, turnover is primarily viewed as a problematic issue especially if it is voluntary. The firm’s ability to attract, induct, manage, and retain a skilled workforce is directly linked to its ability to achieve its organizational objectives. If it cannot retain its workers, the firm is left exposed and has to incur unnecessary expenses in the process of recruitment and replacement. In addition, the high rate of turnover affects the company’s productivity as the main source of its operational capacity leave.
As part of a larger more complex organizational function, turnover can be influenced by many factors. The working conditions, level of job satisfaction, and supervisor behavior affect organizational rates of staff turnover. However, from the perspective of Amazon.com, the main causes of its high rate of turnover are poor working conditions, discord between organizational and employee missions, lack of advancement opportunities, and supervisor mistreatment.
2.1 Poor Working Conditions
Harsh working conditions serve to disrupt a worker’s ability to effectively contribute to the organization’s operations. If the environment is conducive, the workers feel motivated and enabled to work harder as they feel that their employer cares about their welfare. Available literature seems to suggest how manipulation of the organizational working environment could have far-reaching consequences on the rate of employee turnover and organizational staff retention. One example depicts how innovative organizations could make great strides on ROI from a staffing perspective by using innovative staff retention strategies (Philips and Connell, 2003).
Herein, we are reminded of the benefits organizations stand to benefit from a revision of their workplace policy. Based on motivation theories, literature supports the notion of higher performance tagged to a conducive environment. As such, Amazon.com needs to improve their workplace to make it more appealing. Many complaints from its former employees pointed to the non-conduciveness of some of its working environments and the inability of immediate management personnel to address this issue as being a major impediment to optimal performance. These sentiments are echoed in related literature most of which seeks to demonstrate the positivity that wor place-motivated employed inject into their performance and how it benefits the organization in the long run (Croucher et al., 2013).
From the perspective of Amazon.com, we can summarize the issue of poor working conditions by stating a need by the company to revise its workplace conditions. In addition to motivating its employers, this would greatly benefit the company by assisting it to evade any liabilities that are attached to dangerous or inhabitable working conditions. One good example was a United States store that forced its staff to endure 38 degree Celsius heat without adequate air conditioning equipment. That would have exposed the company to legal and medical liability due to issues like dehydration and heat stress. A simple solution for this example would simply entail the installation of air-conditioning equipment in the store.
It is obvious that all the above literature articles point to the same place with regard to staff turnover. They all consider the work environment and its impact on employee motivation very important and further their common agenda by stating the need for innovative corporations to exploit this to the firm’s advantage, something Amazon.com should consider doing.
2.2 Supervisor Mistreatment
Amazon.com workers have severally expressed their disdain at the kind of treatment middle and high-level management directs at them. Even the CEO Jeff Bezos has come under sharp criticism for his belittling attacks aimed at members of the board. Such treatment has been shown to negatively affect the morale of workers and even lead to decisions that cause high turnover rates in some companies. (Sliter et al, 2012).
This literature suggests the existence of a good relationship between stress factors at the workplace and poor workplace performance. Amazon.com can implement this on their company where insensitive bosses could be informed of the detrimental effects of their activities when they throw their weights around the office (Fidalgo, 2012).
Interestingly, the effects manager and bosses who treat other members unfairly at the work place is one of the areas that has received a lot of attention with regard to its effects on workplace motivation and organizational performance. Many researchers have invested time and effort in trying to prove how a relatively harmless behavior such as ‘bossing people around’ the office can harm the performance of even the largest companies. Amazon.com presents one such example where there is evidence of employees who left the company due to harassment from a senior member of the company. Unfortunately, Jeff Bezos as the CEO of this large company has been dragged into the allegations. He has lost important members of the company including some who were influential to the company during its formative years.
2.3 Lack of Recognition
The willingness of managerial personnel to identify workers who have contributed to the good performance of the organization is what recognition is all about. Motivation theories associated with expectancy dictate that workers expect their managers, and organizations for that matter, to reward them based on their input levels. So they are encouraged to increase their dedication to the organization to levels they feel are commensurate with the level of output that these firms have attached to them. Amazon.com should attach more value to its workers, especially the most loyal ones that have been with the company from its formation through the growth and hurdled till now. However, that seems not to be the case as issues of future growth, mitigation of unnecessary risks, and dispensation of appropriate strategy to cope with rising competition seem to have taken precedence over workers welfare and appraisal. This is very detrimental even for the most growth-oriented companies as it undermines the same aspect they base their future upon by neglecting the agents of success (Choi, 2009). In light of the above observation, Choi suggests that development-minded organizations need to marry their employee appraisal strategies to their development ones in order to ensure that growth is even within the business.
Many managers are ignorant enough to allow opportunities to appreciate the work of a good dedicated worker when they come up yet some of them are not even active. Research has shown that something as simple as an employee’s name on a memo is one way of keeping a hard-working employee motivated (Mariappanadar, 2009). As such the forward-minded organization will attempt to come up with employee gratification models based on their organizational needs. Such resources themselves are motivational towards the workforce as they demonstrate sensitivity towards the human aspects of labor force.
In order to reduce the high rate of turnover, Amazon.com needs to appreciate the need for recognition of their loyal and hardworking employees. It is self-defeating for an organization to ignore an employee who has stayed on board its work force for a decade to the point of them making the decision to leave. The skills set and experience lost when that happens is considered irrecoverable by most scholars (Ferguson et al, 2008). These scholars exemplify these further using large companies that seem to forget about their earliest recruits prompting them to move on to form their own successful ventures at the cost of their former employer. Amazon.com has had its share of such loses if the formation of such companies as Hulu.com is put into perspective.
2.4 Lack of Opportunity for Professional Advancement
In many organizations, especially large global companies, growth from a personal perspective among employees is a problematic affair. There are usually many other workers that the chances for one to raise the corporate ladder are limited and restricted to a lucky few. Such phenomena has been shown to contribute to high levels of employee turnover among such companies as the workers feel neglected from an appraisal point of view. A lot of research done on the area seems to point to ambitious individuals getting on board companies with their personal objectives which if not met, increase the chances of the same worker leaving for another company that shows more attention to its employees’ ambition(Chiang & Birtch, 2010). Such conditions could be tricky especially for large companies as Amazon.com, with all the global economic hardships and its tens of thousands of employees. However, and as demonstrated by even larger multinationals, it is possible to achieve this level of sensitivity towards employee ambition and factor it into appraisal strategy.
The importance of consideration for employee ambition and professional goals is echoed in more research and literature (Duffield et al, 2011; Ariffen, 2010; Bhuian & Menguc, 2004). Such consideration offers a two pronged approach for organizations to improve their human resource function from a turnover perspective. First, it is a clear demonstration of the organization’s dedication to advancing the employee’s career and a source of motivation. Second, if followed through, it offers the organization with a better batch of skilled workers who in addition to being adequately motivated, as appropriately appraised through retraining and re-evaluation.
Amazon could benefit from the theories and observations forwarded in the above literature regarding ignorance towards employee professional advancement. As a large global company with a complex human resource structure, it needs to factor in more efforts at recognizing the need to enable its employees to develop while on board, and even assist those that express a need to hop off the bus.
2.5 Discord Between the Organization’s and Employees’ Missions
All organizations have visions and missions that drive their business resources through skilled workers to success and organizational objectives. However, many organizations fail to establish if their employees’ missions are aligned with those of their companies leading to disparities that more often than not are erosive to the long-terms growth of the business. One way this disparity harms organizational growth is employee dissatisfaction which has been proven to be a major cause of high employee turnover (Kilbridge, 1961). Therefore, organizations need to establish an alignment between organizational missions and those of its workers in order to foster a synergistic relationship between the two thus propelling the firm better towards success.
Large global companies are subject to more than the average range of problems with seemingly small issues such as economic downturns and competition getting magnified to a global scale. This generates more pressure on the management’s end to sustain growth and ensure the firm continues to prosper, sometimes at the expense of more important issues such as employee welfare and consideration. As we have seen, the alignment of employee missions with those of the organization is an important strategy towards success. But, the situation on the ground is opposite as other issues more directly linked to fiscal performance and shareholder gratification take precedence. Research shows that such ignorance has a demonstrated long term effect on employee motivation and morale as eventually, feelings of self-actualization force employees to start considering moving to other firms (Lee, 2004; Schmidt, 2010; Jones & Skarlicki, 2003).
As demonstrated by these literature resources, the correlation between feelings of consideration towards personal growth and organizational efforts at enabling their achievements has a profound effect on the employee’s morale. Amazon.com could exploit this to their advantage by inquiring their employees’ mission and feelings of highest professional achievement (Simons, 2011). Once they are established, strategies could be formulated to marry them with the organization’s long-term goals, making sure that these important assets of the company feel a lesser need to leave for other companies.
Amazon.com has thrived as an online company offering an internet-based market place for millions of global customers. However, and ironically, the otherwise successful company has been a long-time victim of high rates of employee turnover. Some of the issues that have been raised and identified as being responsible for Amazon.com ‘s high turnover rate include; poor working conditions, supervisor mistreatment, discord between organizational and employee missions and lack of opportunities to advance oneself professionally.
A substantial amount of literature has been used to demonstrate the existence and a strategy from which Amazon.com can derive a way out of its current predicament. Though the literature review provided a wide variety of scenarios from which Amazon.com can derive solutions, it is not intended to form an exhaustive source for similarly challenged organizations to benefit from. More research and industrial trouble-shooting is needed to benefit the situation.
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