“It’s like firing someone who got an A- when the rest of the class got A’s”
Amazon has a goal to cut a certain number of employees each year, according to a leaked internal memo.
The memo highlights Amazon’s strategy for forcing employees out, according to a Business Insider report. It directs Amazon Web Services managers to place twice as many employees as the company wants to eliminate into a performance-coaching program called Focus. The program is the first step in a process that could lead to an employee’s termination.
Amazon employees are first enrolled in Focus, a coaching program for underperformers. If their performance does not improve, they can be put in Pivot, a program in which employees can choose between starting a performance-improvement plan or leaving the company with severance.
According to the memo, employees who receive the lowest rating in annual performance reviews were automatically placed in Focus. The memo said once employees were enrolled in the Focus program, a vice president had to approve their removal from it.
The memo also said that if AWS teams failed to meet their targets for employee departures in 2020, they would have to make up the difference in 2021.
“This story is based on a false and incorrect source and the details included here do not reflect company policy,” an Amazon spokesperson told Business Insider. However, the spokesperson did not specify any inaccuracies in the memo and did not respond to a question about whether the measures were practices anywhere in the company, the publication reported.
The company has also denied that people who received low performance-review ratings were automatically enrolled in Focus, saying there was no direct tie between performance ratings and placement in coaching programs.
Amazon employees receive a performance grade during reviews – top tier, highly valued, or least effective. According to Business Insider, managers across the company are given quotas for each ranking – they are reportedly expected to rank 20% of employees at the top level, 75% in the middle tier (which includes three sub-levels), and 5% at the bottom level.
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The company also has a metric called “unregretted attrition rate” (URA), which represents the percentage of employees it would like to see leave the company – voluntarily or otherwise – in a given year. That goal appears to be 6%, according to leaked documents. If AWS teams fell short of the URA goal in 2020, the memo said they would have to make up the difference this year.
A number of employees told Business Insider that Amazon employee reviews resemble stack ranking, a performance review system in which employee performance is evaluated on as curve and a certain percentage of employees must be ranked at the bottom. Stacked ranking is a controversial system because requiring a certain percentage of employees to rank at the bottom can hurt those employees’ compensation and their potential to advance within the company.
Find out some technology to use to streamline performance reviews in this article.
Amazon has denied that it uses stacked ranking, insisting that it evaluates its employees on individual merit.
However, Amazon managers told Business Insider that they felt pressured to rank some employees in the bottom tier, even if they felt their performance merited a higher level. One manager said they faced “unrelenting pressure” to meet the URA goal.
“Whomever is the least best has to go,” the manager told Business Insider. “It’s like firing someone who got an A- when the rest of the class got A’s.”