(Bloomberg Businessweek) -- Jane was working in Amazon.com Inc.’s Seattle headquarters when she was asked to a meeting with her manager and a human resources representative. They gave her a document outlining concerns about her work performance and spelled out three choices. She could quit and receive severance pay, spend the next several weeks trying to keep her job by meeting certain performance goals, or square off with her manager in a videoconference version of the Thunderdome, pleading her case with a panel of co-workers while her boss argued against her. Jane, who asked that her real name not be used to discuss a personal matter, chose the last one.
The employee appeal process is Amazon’s latest experiment in managing its growing workforce of more than 500,000. When it announced the program last year, Amazon acknowledged it had been quick to fire people instead of trying to resolve problems in other ways. Executives recognized that poorly defined roles, dysfunctional teams, and peremptory managers were among the factors that often remained unexamined, according to a person familiar with the matter. Workers facing termination also lacked a forum to discuss such factors, the person says.
Amazon is borrowing a page from union grievance processes that don’t apply to most corporate employees. But only about 30 percent of those who appeal their manager’s criticisms prevail, meaning they can keep their jobs or seek new ones within the company with different bosses, according to people familiar with the matter. Eighteen months after its debut, the hearing process has created resentment and raised questions about fairness, according to current and former workers as well as attorneys familiar with their situations. “It’s a kangaroo court,” says George Tamblyn, a Seattle employment lawyer who helped one former Amazon worker plan her appeal earlier this year. “My impression of the process is it’s totally unfair.”
Amazon declined to share metrics about the program or answer specific questions. “Pivot is a uniquely Amazonian program that was thoughtfully designed to provide a fair and transparent process for employees who need support,” the company said in an emailed statement. “When employees are placed in Pivot, they have the option of working with their manager and HR to improve with a clear plan forward, of leaving Amazon with severance, or of appealing if they feel they shouldn’t be in the program. Just over a year into program, we’re pleased with the support it offers our employees and we’re continuing to iterate based on employee feedback and their needs.”
Employees whose direct managers recently changed tend to make compelling appeals, according to a person familiar with the process. Workers who lose still get to choose between severance pay or a performance-improvement plan. The downsides of appealing include the stress of litigating a case before strangers and against their bosses and trying to get along with your manager after publicly challenging them.
Jane says her manager had recently changed her job responsibilities and set impossible new goals for her (dayslong deadlines for projects that required weeks). She had an hourlong meeting with a company-appointed “career ambassador” who listened to her concerns and said she’d have a few thousand words to rebut her manager’s complaints about her performance. The ambassador later suggested revisions to her draft, including removing details Jane thought were important for the panel to consider.
Jane had the option of choosing one manager or three nonmanagers as her jury. She got a list of potential panelists in advance, so she could look up their job titles, biographies, or work backgrounds, using an internal phone tool and LinkedIn. Employees can dismiss some panelists they worry will be unsympathetic. It didn’t help much, she says: At the hearing, the videoconference made it difficult to connect with any of the panelists or engage on a personal level, and she sweated through her shirt. She wasn’t invited to watch her boss’s presentation, and he got the last word. She waited by the phone until the career ambassador called to tell her she’d lost.
For a company of Amazon’s size, the system could pay for itself by reducing the high cost of worker departures. A company with a 10 percent turnover rate, meaning 1 in 10 workers leave each year (a low-ball estimate for a tech company) has to dedicate about 5 percent of its annual payroll to recruit, hire, and train replacements, says Fred Whittlesey, a compensation expert who previously worked for Amazon. For a company the size of Amazon, those costs run into the hundreds of millions of dollars. “There’s a huge financial incentive to reduce turnover, if you can do it in a sensible way,” he says.
Amazon hired dozens of “career ambassadors” around the world to explain the new process to employees. Yet the appeal process is so baffling that it’s created a steady stream of work for employment lawyers giving consultations to help workers prepare for their appeal, say attorneys familiar with the process. Tamblyn says the process can be unfair, and that his client was forced to focus on performance issues highlighted by her manager instead of the fact she’d recently changed jobs within the company and had little time to adjust. “The fact that she was hired for one job and switched to another was a very important fact,” says Tamblyn. “She wasn’t allowed to present her case.” Amazon declined to address this specific concern.
Seattle employment lawyer Alex Higgins says he has consulted with about 10 Amazon employees presented with performance-improvement plans. Four of those clients appealed, and one prevailed, he says. But even that client left for another job shortly afterward because the tension remained with his boss. “It doesn’t really provide a long-term solution,” Higgins says. “The people on the appeal panel say you’re right, and they go away. Then you’re still with the same boss, who thinks you aren’t doing a good job.”
After Jane’s career ambassador called to tell her she’d lost the appeal, she had one business day to decide if she wanted to accept about one month of severance pay to leave or attempt to meet the goals of her performance-improvement plan. She chose to keep working.
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