Executive Summary
Amazon is known for its successful HR practices and high profitability. It is implementing various strategies in terms of HRM to improve the cooperation of employees and managers based on the commitment to the company’s values and skills development. However, the existence of unique procedures of employment, performance management, and career development contribute to the creation of an effective, but harsh environment. Therefore, specific improvements in Amazon’s health and safety practices and its compliance with the ethical standards are needed.
Amazon is one of the examples of companies implementing HR practices for their benefit. Despite the existence of numerous initiatives and programs intended to improve cooperation with the employees, the company’s managers still face enough issues that need to be resolved. They relate to all the spheres of Amazon’s activities, from competencies of its workers to the compliance with health and safety measures. Since human resource management was the major company’s weakness in its first years, it is necessary to track the progress in this area and address the shortcomings in order to increase productivity.
History of Amazon and its Place in the Industry
The history of Amazon explicitly reflects the intentions of its founder, Jeff Bezos, to turn it into a big and fast-growing company. Nowadays, it is the largest retailer and provider of web-services in the world (Ferracone, 2019). Amazon was established in 1995 as a company selling books online, but soon enough turned into a huge enterprise in e-commerce focused on various goods (McFadden, 2019). However, such rapid progress should be conditional upon specific management actions in terms of generic strategies.
The essential resources of the e-commerce company are people working for it as well as buying its products. As for customers, it is easier to attract them by demonstrating the distinctive characteristics of the company to make them choose its goods or services. Such measures can be reflected in a single action or a specific policy established from its foundation, whereas the recruitment and retention of personnel require more complex policies. At present, this American corporation is comprised of approximately 560,000 employees, and this number allows to conclude on the efficiency of its human resource management (Courtney, 2018). Nonetheless, it is essential to maintain this amount and attract new talents for further benefit, and this task includes regular changes in the human resource policies of Amazon.
HR Policies, Practices, and Strategies at Amazon
The success of any company is based on the proper management of its resources, and Amazon is no exception to the rule. Its policy not only proves to be effective over time but also represents a unique model of management. It is evidenced by the fact that it received the 2018 Human Resource Management (HRM) Impact Award for its program presented as “Simulation Strategy to Scale and Preserve the Candidate Experience” (Amazon, PepsiCo win HRM impact award, 2018). However, the result reflects not some short-term measures, but long-term work carried out for the achievement of this target.
The principal HRM policies of this organization refer to specific measures aimed at the provision of equal opportunities for all employees. They include anti-harassment and non-discrimination in the workplace. Such provisions are guaranteed by the Amazon’s Code of Conduct available on the company’s website (Code of business conduct and ethics, 2018). They are complemented by the safety and health policies, which are of primary importance for the company (Code of business conduct and ethics, 2018). Hence, Amazon provides a safe environment for all employees without discriminating against any of them.
The HRM policies of Amazon are also reflected in their strategy of creating independent leaders who can manage their activities and help the others to develop specific skills necessary for work. Hence, the successful implementation of their policies requires the development of its unique philosophy as a ground for future prosperity. The ground for HRM policies at Amazon is the six core values or leadership principles presented to all the new workers (McCracken, 2019). They include customer obsession, ownership, frugality, the bias for action, a high bar for talent, and innovation (McCracken, 2019). Thus, leadership starts with the orientation towards target customers and particular attention paid to them.
Human resource management practices at Amazon reflect their philosophy of leadership. They align with the SHRM theory, according to which all decisions in terms of human resources should match the basic strategy of the company (Sagar, 2019). Their strategy refers to obtaining long-term benefits with the help of qualified human resources. Hence, the key objective of Amazon is the creation of the right leaders through training and promotion of required skills and qualities. These leaders are supposed to increase the company’s competitiveness in the market.
As for team working, the policies of Amazon are different for full-time and part-time workers as they are acting separately. The part-time employees’ conditions are less stressful, and it allows them to have a better balance between the time they spend in the office and with their families (Petrillo, 2016). The company’s managers believe that the division of part-time and full-time workers promotes flexibility of Amazon and makes their teams more productive. Their high performance is also conditional upon a system of feedback, which allows the employees to criticize and praise one another.
The success of Amazon’s HRM policies can be measured by the turnover of employees. The company perceives HR practices as the instrument for talent acquisition and retention, ensuring a better understanding of customers’ needs through following the guidelines for efficient leadership. Nonetheless, this approach seems to be quite harsh for the company’s workers as the constant race for correspondence to its standards might result in a higher level of stress, not in increased productivity.
HR Competencies for Effective Workforce Planning
The company’s efficiency is mainly achieved through the use of proper methods of workforce planning. Hence, Amazon’s HR competencies are viewed in relation to its core policy towards human resources and reflect the company’s strategy of long-term benefits. As the successful implementation of this strategy requires the correspondence of such competencies to the six values of leadership mentioned above, they align with the SHRM’s competency model (Strobel, 2016). According to this model, there are several essential competencies of business leaders, ensuring the progress of the company.
The HR competencies of Amazon primarily refer to the leadership qualities that allow managers to motivate employees and create a positive attitude towards the company’s progress. They also include the ethical aspect of Amazon’s activities, which means that employees need to understand and respect the company’s ethical guidelines. Moreover, they need to see the connection between their HRM practices and essential business perspectives (Strobel, 2016). Another competency is related to the ability of a leader to maintain interpersonal relationships for better communication with clients and co-workers. In the case of Amazon, the company’s leaders not only maintain its activities but act as consultants for other employees.
Together with the essential leadership competencies valued by Amazon’s managers, there are several soft skills that allow an employee to become successful at work. Such HR competencies include confidence, curiosity, enhancing the learning process, listening skills, global vision, teamwork, and an employee’s ability to track his or her progress (Premack, 2018). Thus, the image of an ideal worker for the company is a confident person focused on improving his efficiency with excellent skills in cooperation with other employees and planning his work.
HR Theories Regarding Effective Recruitment and Selection
The success of the company’s activities is defined by a human factor, and, therefore, it is vital to develop specific guidelines for recruitment and selection of new employees. The primary task for HR managers at Amazon is to ensure their suitability to the existing practices and understanding of the company’s long-term strategy. For this, Amazon hires so-called bar raisers, the interviewers making decisions on the employment of workers (The Amazon blog DayOne, 2019). This approach allows them to focus on the quality of personnel rather than their quantity.
As Amazon needs highly innovative people, specific tools should be implemented to assess their suitability. Bar raisers are the people outside the company who are entirely objective in their assessments and able to apply the leadership principle to potential employees (The Amazon blog DayOne, 2019). They evaluate not only the existing qualities of candidates but also the perspectives for developing the ones the company needs most. Their responsibilities include the assistance to hiring managers in preparing questions for interviews. The need for objective evaluation is conditional upon the intention of Amazon to hire long-term employees. Thus, Amazon combines the efforts of its leaders with unbiased specialists from third parties to make the right choice of future employees that would suit best the company’s needs.
The process of recruitment and selection is completed by interviews, in which bar raisers and hiring managers of the company participate. The interviewing is simple, and it consists of several stages intended to evaluate the prospective worker (US Day One Blog, 2020). Its purpose is to check his suitability to the corporate culture in addition to the already assessed qualities. Hence, together with answering frequently asked questions, candidates need to demonstrate their understanding of Amazon’s culture, ability to cope with risk based on prior experience, and technical skills.
The combination of methods used by the Amazon managers and bar raisers corresponds to the theory of recruitment, selection, and retention. Accordingly, the HR practice at the company is characterized by a clear vision of what employees they need, what competencies they should have, and how to select suitable people so that they would become long-term workers with high performance (Bean-Mellinger, 2019). The existence of an established hiring practice allows Amazon to attract the best talents with the vision of the company’s prospective development.
HR Processes, Systems, and Strategic Goals
The implementation of HR practices requires constant attention from Amazon’s managers as they need to respond timely to possible changes in the company’s policy towards its employees in a timely manner. They also need to align with the current strategic goals for compliance with its long-term plans. Hence, together with the existing HR practice, Amazon intends to develop new programs and initiatives corresponding to its strategies.
Most measures related to the efficiency of HR practices include the acquisition of new skills by employees for higher performance under new circumstances. One of the examples of such alignments is the latest retraining program of Amazon called Pivot (Howland, 2017). It is intended to improve the performance of employees with the lowest indicators to turn them into efficient workers instead of firing them. For this, they are offered guidance from specialists called career ambassadors. However, despite the initial idea of help, it promotes competitiveness and might result in voluntary resignations rather than improvements due to the increase in stress level. Such measures also contribute to the creation of the reputation of a harsh employer.
Another area for improvement is conditions for the career growth of the existing employees and, consequently, a better image of the company among its workers. One of the recent measures is a program known as Part-Time Team Initiative, according to which Amazon would make up teams of only part-time workers (Petrillo, 2016). This type of employment seems to be less stressful and allows the employees to achieve a better balance between life and work. Consequently, it would result in the presence of different types of workers for a clear division of performed activities as well as promote the company’s flexibility. Such a program might also boost the productivity of Amazon’s workers and lead to a better understanding of the efficiency of various teams.
The measures intended to increase the flexibility of Amazon workers and the company as a whole seem to be a better option than instilling new rules and mechanisms of increasing the productivity for underperformed employees. As the strategic goal of the company is to achieve long-term success, variation in the number of people in a team and the changes in their working conditions would be of better help. The soft approach would increase the satisfaction of work and reduce the stress of employees in the long run.
Compensation, Performance Management, and Career Development
Another distinctive feature of any company is its mechanism of compensation. The system exploited by Amazon was developed in the 2000s, and it is still used in the company (Ferracone, 2019). Its primary characteristics are simplicity and flexibility, which allowed the company to experiment on various options. The system applies to all categories of workers and provides for fixed payments without cash bonuses or RSUs to the best performing employees (Ferracone, 2019). Thus, the compensation system at Amazon is based on the strategy of attracting those people who would significantly contribute to the company’s future success as owners.
Despite the evident efficiency of such a system, it also contains risks. To make it work, HR managers should maintain a high level of performance among employees. The failure to successfully implement the HR practices might result in the inability to support the compensation systems. Thus, the employees with low performance indicators would receive more compensation than it is required while neglecting the ones who lead the company to success.
The performance management of Amazon is defined by its leadership principles. The focus on individual qualities and skills of employees promotes the ability of a person to cope with emerging situations on his own rather than collaborate with others. Such a system leads to the necessity to evaluate the performance of all the company’s employees regularly. For this objective, Amazon is using a program called “Anytime Feedback Tool,” which allows the workers to leave their feedback on the performance of others anonymously (Courtney, 2018). It is complemented by the program called “Connections,” according to which every person in the company should reply a random question a day about work (Kim, 2018). If an employee’s performance indicators do not correspond to the established values, he or she is subject to the three-month “Performance Improvement Plan” (Courtney, 2018). This system of performance management produces excellent results but contains several drawbacks.
The advantages of Amazon’s performance management lie in the development of the ability to respond to constructive criticism as well as defending one’s opinion on what is best for the company. Nevertheless, the amount of problems connected to this system prevails, and HR managers of the company should pay special attention to their elimination. The lack of guarantees of anonymity does not increase the trust in the company’s management. It also prevents people from sharing their real thoughts on how to improve the process through the improvement of individual performance. This situation also results in the inability of people to build teams for performing specific tasks. Therefore, the management of Amazon should develop a more explicit system of employees’ cooperation and feedback.
As for career development in the company, Amazon designs various programs facilitating the process for its workers. One of such programs is called Career Choice, and it aims at assisting in receiving certificates and degrees through financial aid (McNeal, 2016). The only condition for assistance is the following obligatory employment at Amazon for a year. Amazon is also offering additional training programs for future employees at their fulfillment centers (McNeal, 2016). Its current goal includes the retraining of 100,000 workers by 2025 (Gurchiek, 2019). The investment in the education of the personnel is the right decision for any company. However, to make it work, a more clear focus of the company should be developed.
To comply with the needs of businesses, Amazon should do additional research on the changes in demand for jobs. As can be seen from its initiative’s description, the company focuses not only on the occupations defined by the Bureau of Labor Statistics as the ones in high demand but also on all the educational programs developing the skills they favor (McNeal, 2016). Thus, to avoid making the wrong choice of employees due to the changing market conditions and the company’s strategic goals, the management of Amazon should implement a practice of regular research on demand.
Possible Improvements in Health and Safety Practices
One of the essential concerns of any company is the safety of its employees at work. The correspondence of its practices to the defined safety standards improves the overall image and makes it more attractive for potential employees. Hence, Amazon provides training on health and safety in fulfillment centers for all workers. It also uses such a tool as the Safety Leadership Index that allows the company’s managers to assess the efficiency of its measures towards ensuring safety and track the injuries at work (Amazon’s commitment to workplace safety, 2018). Together with the evaluation practices, the company also creates new safety measures for its workers.
Such indicators as the ability of management to create a safe work environment, the success of the conducted training for the company’s personnel, or the feedback of people on the implemented measures are vital for the safety provision. However, the work of Amazon’s managers does not stop with a mere evaluation but expands in scope. Their helpful suggestions for increasing the safety at work include the ideas to reduce the contact of people with equipment and elaborate safe movements with regards to body mechanics (Amazon’s commitment to workplace safety, 2018). Nevertheless, the engagement of Amazon in the process of creating and maintaining safety standards does not always lead to its successful implementation.
According to the information from other sources, Amazon is reportedly exposing workers to situations that can be dangerous in terms of injuries. One of the cases of breach of safety regulations is the discharge of repellent spray at the company’s warehouse, which led to the injuries of several workers in New Jersey (Valentic, 2018). This occurrence reflects the lack of measures ensuring the safety of the workers or the company’s failure to educate them on possible injuries resulting from contact with some substances.
The other cases also speak against the correspondence of the working conditions at the Amazon facilities to the required safety measures. They include killed workers and numerous emergency room admissions creating an unfavorable reputation for the company (Valentic, 2018). According to the results of investigations from the third parties, Amazon was included in the report of the National Council for Occupational Safety and Health (National COSH) as a company that does not provide proper safety conditions for its workers (Valentic, 2018). Eventually, the management of Amazon was put in such a situation that only the changes in its safety practices would allow to improve the company’s image.
The actions of Amazon should be oriented to hiring more personnel responsible for ensuring the safety of workers. From the examples mentioned above, it is clear that their amount is insufficient for improving the safety indicators and training the workers. Moreover, to prevent the risks of injuries, the management of Amazon should consider the employment of specialists who would keep track of the possible violations of safety rules. It is vital to distinguish the failure of an employer to provide the necessary working conditions from deliberate neglect of such regulations by the workers. This task would be the responsibility of such specialists in the event of disputed causes of injuries as well as regular inspections of the company’s warehouses. Finally, the managers should conduct regular tests among the workers on their knowledge of the company’s safety rules. As an option, a feedback instrument, such as the ones for the office employees, should be created. Instead of criticizing other people’s performance, they would allow to inform the company’s managers on deliberate non-compliance with the safety rules of workers.
In addition, as these cases became a public matter, there is a need for a mechanism to improve the image of Amazon. It is essential for further recruitment of specialists and retention of the workers. The company can resort to organizing public tours for potential employees to assure them in the compliance of its processes with the safety regulations. Another possible measure is publishing annual reports on the number of cases of injuries at work with the specification of their causes. It would also allow Amazon to reduce the number of casualties prescribed to it by referring to the actual cause of such an outcome. In this event, the company would be able to prove whether it is a result of its neglect or deliberate actions of an injured worker who ignore the safety rules. The combination of the described measures is the instrument Amazon can use to improve its image.
Ethical Approaches for HR Management
One of the vital components of business success is the company’s ethics, and the management of Amazon makes efforts to comply with it. Hence, they elaborated the Code of Business Conduct and Ethics, which is available on the company’s website and contains principal laws and regulations for employees (Code of business conduct and ethics, 2018). The principal rules include avoiding the use of their position for the benefit of relatives, bribery, and prohibition to trade securities for the persons who have access to the company’s material information.
The employees should also avoid any kind of discrimination or harassment, as well as discussing prices to make agreements with third parties (Code of business conduct and ethics, 2018). Amazon, in its turn, provides “a clean, safe and healthy work environment” for its workers (Code of business conduct and ethics, 2018). In any situation, when an employee is not sure how to conduct himself, he is advised to ask the managers. However, not only employees but also the Board of Directors should comply with the provisions on the company’s ethics.
Although Amazon’s Code of Conduct provides for any kind of violation of the ethical standards of the company, numerous breaches have been reported by media. The reason for them is the apparent attractiveness of the company due to the low prices. Thus, the benefits of using Amazon’s services make people forget about the necessity for the company to comply with ethical standards it promotes.
The high profitability of Amazon is partly explained by the fact that the company tends to avoid paying taxes. At the time of its foundation, physical stores were the only taxpayers, and the law did not apply to online shops (The ethical issues with Amazon, 2019). The situation has changed over time, but Amazon still “forgets” about such obligations. The policy of the company intended to create job opportunities in its new locations instead of paying taxies neither substitutes them nor promotes the development of society.
Another violation relates to the most important regulation of their Code of Conduct – the creation of a proper work environment. Relatively low wages, extremely high targets for the workers at warehouses, and the lack of health insurance worsen the situation and, as a result, the image of Amazon for society and potential employees. The company is also known for the exploitation of temporary workers, who have no chances to receive any guarantees from it (The ethical issues with Amazon, 2019). However, the situation of such workers is not the worst possible position at Amazon.
The disregard for the rights of employees is more evident in other countries like China, where the branches of Amazon provide their services. According to their rules, only 10% of all workers there can be Chinese, but no one regulates this situation (The ethical issues with Amazon, 2019). As a result, a lot of people work without social insurance, paid leaves, and other guarantees from the company. Their poor conditions and lower wages reflect the indifference of Amazon towards its workers.
However, not only workers at warehouses around the world suffer from the lack of proper work conditions. Office employees struggle to comply with all the company’s standards that make them work at home, reply to emails any time, day or night, and answer the calls from managers on vacation (The ethical issues with Amazon, 2019). In combination with the practice of criticizing one another anonymously, such conditions can hardly be viewed as a positive work environment. Constant evaluation of the employees’ performance consequently results in working under stress conditions.
As can be seen from the problems describes above, the management of Amazon should work on the improvement of conditions for workers and office employees at all levels. It would be extremely beneficial for the company as its reputation is mostly created by the people who used to work for it, but had to leave due to the situation at work. For this, Amazon should change its policy of criticizing co-workers as there is no way to check if the information is accurate or this instrument is used for getting rid of the people who are not liked by some employees but have higher performance. Such a tool can be useful only in combination with a regulating mechanism ensuring the objectivity of the feedback. Moreover, it is necessary to comply with the provisions of the company’s Code of Conduct in terms of taxes and guarantees for the workers.
Conclusion
The HR policies of Amazon are reflected in its systems intended to improve cooperation between managers and employees. However, the basis for such an objective seems to be controversial as the idea of criticizing one another cannot lead to a better mutual understanding. Commitment to leadership values, together with the mechanism for exchanging feedback, promote the increase in the company’s profit but does not motivate people to work for it. Moreover, Amazon does not seem to comply with its Code of Conduct in terms of providing the stated work conditions. Thus, the company should consider shifting the focus from its profit to its employees.
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