Work Culture

Why it makes sense to pay employees to quit?

By on July 26, 2016


“Are you bored at work? Then we will pay you to quit”. Sounds unbelievable right? But that’s exactly what Amazon CEO Jeff Bezos recently announced to his shareholders that the company is offering employees $5,000 to quit. That’s right. Imagine being paid to quit!


The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer.” We hope they don’t take the offer; we want them to stay. Why do we make this offer? 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.

– Jeff Bezos in his letter to shareholders.

In an era where top companies are providing benefits to retain as well as attract top talent, Amazon is paying its employees to quit. The belief here is that only those who genuinely want to work at Amazon, will stay behind and not accept the offer. The company hopes to retain only those employees who are fully committed to giving their best whereas the rest can look for better opportunities as they see fit.

Amazon, however, is not the first company to implement the ‘Pay to Quit’ policy. The idea was originally introduced by Zappos (subsidiary of Amazon since 2009). Now commonly known as ‘The Offer’, it’s worth an employee’s one month salary but back then it started with $100. This offer is made to the new hires so that they can take a call whether they really want to go ahead or take the money and leave.

For those who have been in the organisation longer, there is a different offer. They are given a 3 month’s severance paycheck and an additional month’s salary for each month worked beyond 4 years. Which means if you have been working there for 4 years and 5 months (as an example), you would get 3 months severance paycheck plus 5 month’s salary too. Now that is one hell of a sweet deal!

It is evident that those who reject these offers and prefer continuing their association are the ones who are truly dedicated to the company. It is better to have employees who are happy to work in an organisation as opposed to those who are just looking forward to their paycheck at the end of every month.


Amazon as of now is only offering the former option to its new hires. It may or may not extend the second option in the coming years.

Why it makes sense

Save money!

Let’s face it. One of the main concerns of the management is the excessive amount of money that is wasted due to employee attrition. If given the option of a payout to leave, unsatisfied employees will leave sooner and save tons of money that would otherwise have been invested in their salary, training and development.

No company wants to retain unhappy employees. They do not meet expectations and add only to cost of the company. It is better to let these go and hire suitable candidates.

There have been incidents where an employee has gone absconding at the end of the month, and the company has still paid the salary on time. Such employees only look to continue till they can find a better job. While it works in their favour, the company has to face huge losses.

Employees rethink cultural fit

In their eagerness to join, new recruits almost say everything positive about the company culture and how they are best suited in such an environment. More than anything, they want to be employed. They do not research how the culture and whether they will be able to adjust with it. Or even tend to overlook such things in their desperation to join.

But once they are on board, they find it difficult to adjust.

That’s all well for the company though. Each company is unique owing to its unique culture and practices. If someone can’t fit into it, it works well for both when the employee leaves. After all in an eccentric environment only the crazy ones would be happy. A normal person would find it difficult to adapt and would eventually leave. So it’s better he leave at the earliest than cause losses owing to his continued association.

This initiative is surely great to remove unhappy people. But there is also a possibility of people joining the company just to get paid to quit. It does look like a quick buck if you have to spend just a couple of weeks on the job. Only time will tell if this will be adopted widely by many companies or will it be scraped in favour of another better policy.


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