Business Insider reports that "Amazon has been pressuring managers to identify low-performing workers to push out of the company using performance-improvement plans, according to a series of leaked Slack messages obtained by Insider … The messages were between managers from numerous divisions, including Amazon Web Services, Pricing, and Compliance. The communications reveal a company where stack ranking - the practice of pitting employees' performance against each other and trying to force out the lowest-ranked workers - is a common topic of conversation among managers. And they suggest that Amazon is using performance-improvement plans, or PIPs, to further drive head-count reduction before the end of the year."
The story notes that "Amazon employees have long railed against the company's performance-management process. Amazon sets a 6% target for unregretted attrition, Insider has previously reported. Employees labeled 'least effective' are placed in a performance-management program called Focus. Amazon expects roughly one-third of the employees on Focus to end up leaving the company. Amazon instructs managers not to tell their employees if they are on Focus, generating complaints that the process is opaque."
Business Insider does offer some context for the Amazon moves: "As fears of a recession have prompted tech giants to tighten their belts, some companies have turned to so-called 'quiet layoffs' to reduce head count by increasing the number of workers on some form of PIP. Employees who fail such plans are usually asked to leave. Meta, Facebook's parent company, asked managers to identify a certain percentage of workers as underperforming, putting them on track to be potentially managed out. Meta laid off about 11,000 employees in early November."
Amazon is in the process of eliminating as many as 10,000 jobs, an effort likely to continue into 2023, it also continues to hire season workers for distribution centers that require increased head counts for the end-of-year holiday shopping season. Amazon has some 1.5 million employees globally, and Amazon increased its total labor headcount by five percent over the past year.
- KC's View:
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I know that these are formal headcount reduction programs, but in the end, shouldn't every manager be evaluating the staff, knowing - based on both tangible and intangible measurements - who the high performers are and who the low performers are? It seems to me that as leaders build effective and sustainable teams, this should be an ongoing process, and one that is a high priority within any organization.
