Amazon systematically attempts to push out 6% of its office employees every year by relying on a series of complex algorithms as well as a controversial management practice that grades employees against one another rather than against their job description or workplace goals, according to a report.
Internal documents obtained by the Seattle Times show the extent to which the online behemoth’s processes closely resemble the practice of stack ranking despite the company strongly denying it. The documents also highlight how much of Amazon’s human resource processes are reliant on proprietary software, apps, and algorithms and provide a glimpse into how the company uses performance improvement plans to funnel low-ranked employees out the door.
Stack ranking, which is sometimes called the “rank and yank” approach, was first used by General Electric CEO Jack Welch in the 1980s. It’s also known as forced distribution. Employees are ranked on a bell curve as exemplary, meeting expectations, or in need of improvement.
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Some companies believe stack ranking is harmful because it encourages an environment that rewards bad behavior and backstabbing by employees to get a leg up on their “competitors” or co-workers. Critics also say stack ranking leads to an unproductive workplace that strangles innovation and the ability of employees to speak freely in fear of losing their jobs.
In response to the Seattle Times’s report, Amazon said the documents contained outdated terminology and were not created by its head human resources team. However, the company, which boasts 789,000 employees, did not dispute that the documents describe Amazon’s policies.
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The news follows an investigative report into Amazon’s hiring practices by the New York Times, which revealed the Seattle-based retailer was burning through 3% of its hourly associates each week with a turnover rate at a sky-high 150% a year. That means Amazon has to replace the equivalent of its entire workforce about every eight months.
The report also revealed that Amazon’s warehouse workers are largely made up of minorities, with more than 60% of associates at its JFK New York plant being black or Latino, and that black associates were nearly 50% more likely to be fired than their white peers.
