Background
Compensation is the reward that employees receive for their work for the company. It is determined by the performance of specific tasks by the organization’s goals. Compensation issues are closely related to the ethical behavior of employers and employees because the value of compensation is determined, among other things, by attitudes about the work offered. This paper investigated Amazon’s policies regarding the compensation of its employees.
Defining Theme
Addressing compensation issues is a complex issue that requires HR professionals to analyze the abilities and capabilities of candidates and employees. The challenge for the professional is to establish how valuable the staff’s qualities are and to translate them into salary. In addition, HR personnel must ensure that the salary decision covers the employee’s basic needs. As of 2022, the maximum compensation for Amazon employees has risen to $350,000 per year (Kestenbaum, 2022). That is a large enough amount that not every company offers. Calculating pay is positive and consistent with the principles of decent pay (Phillips, 2022). Thus, the company’s policies are pretty transparent and reasonable to employees.
Despite Amazon’s success, ethical issues arise in many company areas, including wages. The minimum wage is $20,000, which is not enough to cover managers’ harsh working conditions and actions (Kestenbaum, 2022). In addition, employees also report discrimination and unhealthy working conditions in the context of the COVID-19 pandemic (Evelyn, 2020). The latter case is worth considering because it raises ethical issues such as the company’s view of each employee’s value and ability to compensate for life threats in the context of the coronavirus.
Analysis and Evaluation
In the face of the pandemic, companies tried to move their employees to a remote format and raise their salaries. For Amazon, increased hourly compensation was given to employees who toiled in the warehouse. In addition, rules were created to prevent sickness: paid vacation time (15 days) (Del Rey, 2020). The company had a corporate social responsibility to take care of its stakeholders. However, it was not fully respected during the pandemic: the company did not take care of employee safety and customers, as the primary stakeholders were disappointed (Greene & Alcantara, 2021). As a consequence, customers created the threat of low demand and the problem of financial losses. With a more responsible approach, customers could have been an opportunity for Amazon to find new ways to organize supply safely.
The organization has economic responsibilities to its employees: it provides wages by the law and paid vacations. Amazon is seen as complying with legal principles, but conflicts with unions in the US and the UK show that this compliance is precarious (Butterworth, 2020). Under the NLRA, all employees have the right to freedom of assembly (National Labor Relations Act, 1953). In addition, the law requires that conditions for unions be provided, but Amazon has repeatedly violated this and been in conflict (Greene & Alcantara, 2021). The consequences of worker strikes and underpayment by drivers are also legal violations (Stoller, 2018; Menegus, 2017). In 2014, Amazon violated the hourly and minimum wage laws, resulting in significant fines (Taylor, 2014). Ethical responsibility for compensation compliance rests with HR managers and finance departments who set the budgeted annual plan (Moriarty, 2021). Motivational compensation programs conflict with legal violations committed against unions. Meanwhile, the economic responsibilities of management are at odds with the behavior of HR managers who shape the wrong wage fork.
In the pandemic, Amazon’s behavior focused on the compensation factor: terms and magnitude. The value of the hourly wage was increased by $2, which is a positive and stimulating action (Del Rey, 2020). The social distancing policy as an idea was good, but strikes in 2019-2020 show that Amazon followed it selectively (Evelyn, 2020). Numerous layoffs for noncompliance with distance show that the company did not create a safe work environment, and $2 is not decent pay for it (Greene & Alcantara, 2021). Instead, the company should have behaved ethically and followed the requirement to sanitize warehouses and facilities promptly (Moriarty, 2021). It would have satisfied the requirement to match compensation and working conditions.
Recommendations
Amazon’s compensation policy is favorable: starter pay, incentive programs, paid time off, and childcare. During the pandemic, however, the company retained investors who would continue to sponsor getting goods into warehouses (Evelyn, 2020). Instead, the company should have focused its energies on ensuring the complete safety of its employees (Del Rey, 2020). Having information channels for moral and medical support would have improved employee attitudes about working under challenging conditions: this would have a positive effect on the work and the image of the organization but could shift the focus away from the pandemic. Amazon also could have resorted to forming particular schedules with pay and reducing the number of deliveries to one customer per day/week. It could have kept compensation and working conditions consistent (Moriarty, 2021). However, it could have again hurt customer attitudes. The ethical principle of decent wages and decent working conditions is consistent with the abovementioned ideas.
Study Results
This study established what ethical principles should guide the formation of compensation. It was found that even large monopoly companies like Amazon violate the law (freedom of assembly), the value of economic compensation, and working conditions during critical situations. Using Amazon as an example, it was found that compensation is a matter of ethical behavior by managers and directors who shape employee opportunities. This information can be used for own practice in the context of assessing employees’ abilities and the conditions that the company offers.
References
Butterworth, B. (2020). Amazon strike: Workers ask public to boycott Prime Day. INews.
Del Rey, J. (2020). Amazon extends bonus pay for front-line workers but says it ends in June. Vox.
Evelyn, K. (2020). Amazon fires New York worker who led strike over coronavirus concerns. The Guardian.
Greene, J., & Alcantara, C. (2021). Amazon warehouse workers suffer serious injuries at higher rates than other firms. The New York Post.
Kestenbaum, R. (2022). Why Amazon is more than doubling salary limits and the bigger issues it raises. Forbes.
Menegus, B. (2017). Amazon’s last mile. Gizmodo.
Moriarty, J. (2021). Business ethics: A contemporary introduction. Routledge.
National Labor Relations Act, 29 U.S.C. §§ 151-169 (1953).
Phillips, L. (2022). How does compensation work at Amazon? Avier.
Stoller, M. (2018). Don’t thank Bezos for giving Amazon workers a much-needed raise. The Guardian.
Taylor, K. S. (2014). U.S. Supreme Court decision in Amazon worker security screening case is clear victory for employers. The National Law Review.