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May 1, 2014

If I Pay You – Will You Quit?

Filed under: Incentive Pay,Performance Management3:10 pm

What would you do if your boss gave you a monetary incentive to quit your job?  I don’t mean a severance payment for a layoff or reduction in the workforce, but rather he simply paid you to quit.  It is a very interesting thought.  This is the type of incentive Amazon is offering its employees, and here is why.

Gaining the trust and loyalty of an employee is not something that happens overnight, and sometimes for various reasons the bond never really happens and employees become disillusioned.  When an employee is disengaged from their work, companies pay dearly in productivity, morale, and absenteeism.  Jeff Bezos, CEO of Amazon, introduced a new program to employees called “Pay to Quit.”  Here is what he said about it:

“Pay to Quit is pretty simple.  Once a year, we offer to pay our associates to quit.  The first year the offer is made, it’s for $2,000.  Then it goes up one thousand dollars a year until it reaches $5,000.  . . . The goal is to encourage folks to take a moment and think about what they really want.  In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”

Paying disgruntled, unhappy, and disengaged employees to leave is in itself a protection to the company and to the rest of their workforce.  This may seem like a risky move on Amazon’s part, but really it is an experimental strategy to address employee engagement and to give employees the opportunity to better themselves and do what makes them happy!

 

Source:  www.tlnt.com

 

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November 30, 2012

HR Fact Friday: It’s No Wonder – Hostess Asking Approval for $1.8M in Exec Bonuses!

Picked this up off the wire . . . this kind of thing gives compensation consulting professionals an upset stomach and begs the question of what kind of severance package was offered to the 18,000 employees that lost their jobs? I have heard of bonuses to to keep executives on board following a merger to support the integration but a retention bonus after declaring bankruptcy and laying off all the staff is a new one on me. Unless I am missing something, weren’t these same executives  responsible for managing the company while it was failing? Nonetheless, and my opinion aside, we will see how the judge rules on this one.

Hostess Brands Inc. plans to ask for a judge’s approval Thursday to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans.
The maker of Twinkies, Ding Dongs and Ho Hos says the incentive pay is needed to retain the 19 managers during the liquidation process, which could take about a year. Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation.

Hostess is also seeking final approval for its wind-down, which was approved on an interim basis last week.

The process includes the quick sale of its brands, which also include Wonder Bread. Hostess says it has received a flood of interest in the brands.

The company’s bankruptcy means loss of about 18,000 jobs.

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November 16, 2011

Weekly Wednesday Acronym – ROI

If you approach senior management with a plan to implement a wellness program in your organization, one of the first words out of his or her mouth will most likely be “How do you plan to measure the ROI?”  What ROI refers to is Return on Investment (ROI), a calculation which complicates executive buy-in of wellness programs as it isn’t always easy to obtain significant data of ROI.

We all know wellness programs are important and they have become a staple of many corporate benefit packages.  Some organizations start small, offering reimbursement to employees for gym memberships or holding a wellness fair once or twice a year.  Other organizations simply have a deeply engrained principle that forms the basis for decisions about health and wellness offerings.  And larger organizations may offer monetary incentives for participation in wellness initiatives.

No matter how exciting your wellness plan is or how well received it is by employees, ROI will most likely be the measuring stick for success of the plan in the eyes of your CEO.  Fortunately, some organizations have had plans in place that have been able to measure ROI.  One such example is a state program implemented in Delaware in 2003, appropriately named DelaWELL.  First year’s savings were estimated at $62,000 simply through the reduction of emergency room visits.  Currently, health insurance premiums haven’t increased for the last three years.

As wellness programs have now been in place for several years, we are hearing more about the success of these programs and the resulting ROI.  So although ROI may be a difficult measurement, it’s not impossible.  For more information and free resources, check out the Wellness Council of America (WELCOA) by clicking here.

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