Lot's of folks have covered the the story of Zappos and their practice of paying employees to quit. The practice? Get people through the initial training, then offer them $1,000 to quit. The thinking behind the practice is we'll take the disengaged and give them quick money to leave voluntarily, which makes the company stronger.
Me? I love the practice and the fact they're thinking differently, but I don't think that's enough cash if you want to get rid of the dead wood/non-engaged. Here's the rundown from Taylor at Harvard Business Blogs:
"So when Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period.
After a week or so in this immersive experience, though, it’s time for what Zappos calls “The Offer.” The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” Zappos actually bribes its new employees to quit!
Why? Because if you’re willing to take the company up on the offer, you obviously don’t have the sense of commitment they are looking for. It’s hard to describe the level of energy in the Zappos culture—which means, by definition, it’s not for everybody. Zappos wants to learn if there’s a bad fit between what makes the organization tick and what makes individual employees tick—and it’s willing to pay to learn sooner rather than later. (About ten percent of new call-center employees take the money and run.)"
First up, let me say that I love the practice but don't do anything like it, and don't think I would be able to implement it if I wanted to. It's easy to be critical of a practice and tweak it to death when you aren't the one who's trying to execute it, right?
That disclosure out of the way, let's rip it apart!! The article also said the offer had been increased from $250 to $500 to the current $1,000 over time. I'm assuming that's because they didn't feel like they were getting enough takers. My sense is that they'll likely be increasing it again as they get more data back.
Here's why. Assume the call center employees make $30,000 annualized at the Zappos facility. That means the $1,000 offer represents a little less than two weeks pay. If you just landed the job, weren't feeling the Zappos vibe, but needed to work, would you quit? Probably only if you thought you were ultimately going to be fired in the near term or if you had another job waiting.
So, if you really wanted to trim the folks who weren't getting the Zappo vibe, you'd up the quitting bonus to really entice those, who decided shortly after joining, that they weren't thrilled about the culture, didn't want to be in a call center role, etc.
Of course, the problem with any voluntary package is that as you up the offer, you're going to get more of the talent you don't want to lose taking the offer. That stinks. With that problem in mind, perhaps you'd be better off being Darwinian at the end of the probationary period and cutting those you thought didn't think got it, and bonusing the ones who made it.
Of course, that's just my opinion, I could be wrong. Kudos to Zappos for mixing it up...