KATHMANDU UNIVERSITY

SCHOOL OF MANAGEMENT
BALKUMARI, LALITPUR

Leadership and Ethics

MGEM 721

Case study on

Amazon as an Employer

To: By:
Mr. Ajay Shrestha Poudel, Shiva Raj (20518)
School of Management EMBA 2020
Kathmandu University Kathmandu University

Date 30 May 2021

1. Does the people management strategy of care and compassion
make business sense?
The case study has described how Amazon has become successful and has credited its current
success to their employee management strategy. People were asked to work long hours and literally
sacrifice their family/personal time. They were asked to criticize about others which keep everyone
on toes and brought the best of them. Amazon has become a synonym for online business and has
set standard in ecommerce (Amazon), webservice (Amazon web service) or digital books (Kindle).
The strategy of “work first” before personal life has worked well for amazon. They have hired people
who have overachieved, have innovative ideas and, companionate for their profession which
matched to their company philosophy. So their strategy for compassion and care for business (not
for employees) has worked.

However as mentioned in the case, employees with such characteristics are rare and this modality
does not work always. Employees need to be valued, their feeling needs to be listened and they
need to be empathized for earning loyalty and holding employees for the long term. People spend
most part of their active time in workplace and if workplace is like a warzone then employee
satisfaction level and motivation will go down. This will directly hinder their performance. To get
best out of employees workplace should feel like home and co-workers should feel like friends.
Supporting and caring each other (colloquies and subordinates) will bring best out of employees in
long run. Hence, In order to get sustainable growth care and compassion to employees should be
there and it makes sense in business.

2. How does the practice of keeping employees on the edge impact

business in the short and long run?
The case study has shown Amazon has kept employee at its edge and has credited its policy of
keeping employee at edge as one of the key success factors. One of the key policies that kept
employees at edge mentioned in the case are

• Encouraging employees to be critical of other ideas in meeting and send feedback to each
other bosses.
• Software developers were asked to write imaginary press release before even starting the
project. This gave them clear ideas of what they are expected to do. If the thing cannot be
done then the project was abandoned. This lead to quality user/consumer experience which
helped them grow.
• People were asked to work long, hard and smart.
• Bell curve approach of performance management. Rewarding the top performer and firing
the bottom.

It is needless to say how successful amazon is now. Jeff Bezos is one of the world’s richest man, and
also has been listed as one of the top innovator and top CEO in the world. All the current success of
Amazon is a result of current practice. So on short run this will seem to give better results.

But on long run, when people are highly pressurized and are not satisfied then they will left the
company. Same is seen in amazon, the employee turn over rate is high. Performance at amazon was
done on bell curve basis and people below average were terminated. The company has not tried to
find the root cause for the low performance and have not tried to increase their performance.
There are more resource spent in training the new hires. Ex-employees if hired in competition may
use counter tactic to fight the company. And they may spread bad word of mouth and ultimately
even though the compensation benefit is higher there won’t be good candidate applying for the job.
So looking at longrun, it is not beneficial to have employees on edge.

3. Is Amazon’s employer brand as reported by The New York Times

sustainable? Why or why not?
It is needless to say how successful amazon is now. Jeff Bezos is one of the world’s richest man, and
also has been listed as one of the top innovator and top CEO in the world. Some of the key factors
that led amazon to success listed in the case are

• Consumer satisfaction being key focus of a company and “work hard have fun and create
history” was motto of the employees.

On the contrary following points are mentioned as biproducts of the amazon policy

• Employee turnover was very high. Employees were forced to work ling work until they quit,
collapse or terminated.
• Many recruiters were hesitant to hire ex-amazon employees believed they have trained to
be aggressive and work fixated.
• Working long hours averaging 80hrs a week and spending less time with family was key
concern for people working there.

I feel employee hiring process is critical to amazon. They hired people who are passionate about
their profession, who are over achievers, innovative and seek problem as an opportunity to grow.
Online business is dynamic and highly demanding. Amazon work culture and hiring policy seem to
align on line. As long as Amazon is getting employees that aligned with their company policy and are
aggressive and workaholic their business is sustainable. Gen-Z and Baby boomers generations are
thought to be more of individualistic and spend less time with family. Assuming that is true then
Amazon will have no issue in hiring people they would like. So I believe their current status quo will
be sustainable.