
Why Zappos Pays New Employees to Quit—And You Should Too - chaostheory
http://discussionleader.hbsp.com/taylor/2008/05/wy_zappos_pays_new_employees_t.html
======
prakash
It's a very interesting company to say the least. I saw a SXSW presentation by
their CEO and how much he emphasized on their culture. You can email him and
ask for Zappos Culture book, it has nuggets from a lot of their employees;
it's a good way to understand the company.

[http://www.slideshare.net/zappos/zappos-sxsw-presentation-
to...](http://www.slideshare.net/zappos/zappos-sxsw-presentation-
top-10-lessons-learned-in-ecommerce-03-08-08)

------
jobeyonekenobi
Quite a smart strategy. I wouild love to impliment this and infact, I think I
could come up with a very good business case for it. As with most of you I
suspect, I at first thought about the angle of "it's a quick $1k, I'll just
quit in a week and be better off for it". But of course - Zappos has already
weeded out unsuitable candidates in interview/tests. That 10% figure is highly
realistic because Zappos have a good idea that the vast majority of their new
hires ARE right for the job, before they even start their training.

~~~
ph0rque
Plus they're probably running Bayesian statistics on all the data they have on
the interview/test results of the candidates, so they can get better on hiring
those that are less likely to quit. (And if they're not, they should be.)

------
seano
In addition to the filtering element, this strategy probably has a long term
benefit. Those who reject the offer and join are likely to stay committed and
enthusiastic in order to be consistent with their original decision. The
desire to be consistent is a hugely powerful force - read Influence by Robert
Cialdini if you're interested.

------
josefresco
I wonder is Zappos backs up all this "enthusiasm" for the company with actual
money paid. Typically these "fun" organizations expect total commitment from
their employees but shy away from actually giving them a tangible 'interest'
in the org.

~~~
run4yourlives
You'd be surprised though at how much cash people are willing to sacrifice
just to be able to enjoy coming to work each day.

As long as they're ballpark, they'll always have people beating down their
door.

------
redorb
Think its a great idea it separates the employees that have already thought
about quitting. It also gives an easy exit without any anxiety...

------
mattmaroon
I seriously question the economics of Zappos. I mean, I've ordered shoes there
4 times, and I've probably got a record of something like 6 returns total and
2 shoes purchased. They had to eat a ton on that.

I don't really see their ratio being high enough. I'm rooting for them, but I
really feel like any day their prices are going to go up to MSRP and they're
going straight out of business.

And I'd love to know what % of people take them up on the $1k.

~~~
randy
They probably did eat a bit on that, however:

1) Most customer's don't return stuff anywhere close to the rate you do (they
usually get it right the first time. It's also a hassle to return stuff, even
if it's free).

2) I can imagine with your atrocious rate ratio of returns, you'd be far more
inclined to pay a few more dollars to make that experience better via Zappos
then stinge out and deal with paying for the return shipping and poor customer
service issues elsewhere. (i.e. if they raise their prices, who cares?
Everyone knows Zappos was built on their excellent customer service and
selection, not their prices)

(Note: I personally haven't used Zappos myself, but I've heard Tony talk about
his customer service oriented culture in person and they sure seem to be doing
just fine with it).

~~~
mattmaroon
Well, I bet they return shoes a lot. Not as much as I did (and that was only
due to 2 different brands having odd sizes) but I'd not be surprised if half
of their orders end up returned.

It's not a hassle at all with Zappos, it's trivial. I'm the kind of guy who
would just eat the $50-$100 if it required more than 10 minutes of my time.
I've got boxes full of crap to prove that.

~~~
dcurtis
You value your free time at a rate of 300-600 dollars an hour? Wow.

~~~
forgotmyaccount
Post-tax! Must be a patent attorney. Yet somehow he's posting on Hacker
News...

------
edw519
This reminds me of an innovation by another company known for its excellent
customer service, Southwest Airlines.

They would put all of the current applicants in a room and have each one
present themselves to the others. The recruiters never observed the presenter.
Instead, they observed the audience. Those paying attention would be more
likely to care about their customers, and were invited to interview.

~~~
wallflower
If I were a people person, Southwest would be the company I would work for. I
love their reality show because it shows you how people can remain calm in a
storm.

Nordstrom's is a department store known around here for extraordinary customer
service. I walked into a Nordstrom's the other day. I felt out of place
because the marble floors reflected the well-heeled patrons. I went in just to
see if it was true that they never ask "Can I help you?". Because if you are
asked that - you'll probably say "No, thank you." At Nordstrom's, they asked
me "Have you shopped here before?" It's a tricky question - because it's not
really a closed-ended question. "No" "No? How can I.."

~~~
edw519
You _are_ a people person. And you can hack. May be better to stay right where
you're at. :)

------
boredguy8
If you didn't follow the link inside the story:
<http://www.zazlamarr.com/blog/?p=240>. That's how you make raving fans - and
a corporate environment where your employee is free to do something like that
is just going to out-service everyone else.

------
TrevorJ
A bunch of the Twitter employees inexplicably began following me on Twitter
last week, at first I was like "huh"? but then I just chalked it up to Zappos
having a corporate culture that creates a lot of really savvy web people.

------
gojomo
I can see this being more efficient if it's a surprise.

Now that the tactic is public, some may apply and go through the training just
for the buyout, making the filter much more expensive.

~~~
johnyzee
I think they think about this the same way they think about their returns
policy: They just assume that most people will be reasonable, and not go out
of their way to abuse the system.

On a tangential note, I seem to notice more and more how this pattern of just
trusting people seems to win out in all kinds of fields, even though it seems
non-intuitive. Wikipedia is another example and in a sense the whole open
source phenomenon is based on this. Both of these would have been considered
preposterous until they succeeded and completely changed the world.

------
hsu
What will prevent someone who knows about the deal from trying to get a job at
Zappos with no intention of staying, grabbing the $1000 after a week, and
leaving?

~~~
Psyonic
Hopefully those kind of people will be caught by the interview process, but
I'm sure they slip through the cracks every once in awhile. In that case, they
eat $1000. Oh well... it would appear that most people are honest enough that
it doesn't happen very often, and doesn't make much of a difference to their
overall business.

------
vestedinterest
How about bribing employees to quit so they don't vest?

------
senthil_rajasek
you get the boot even before you start :-)

