In Bloomberg this week they wrote about Amazon’s plan, Pivot, to help with employee performance. Pivot is to help employees placed on PIP (Performance Improvement Plan) and also help them remain as Amazon employees. Apparently, PIP did little to help improve performance or maintain employment at Amazon. Amazon admits they probably weren’t using PIP as they should have and stories from employees placed on the internet validate it. In his 1997 shareholder letter, Jeff Bezos warned the Amazon workplace could be difficult and that appears to be true, also.
Performance improvement plans are used by a lot of different workplaces. They can be a good tool to help resolve misunderstandings and correct behavior. The problem is some use them in a negative way and that appears to be what happened at Amazon. The stories from employees are fairly consistent . Employees tell the improvement plans have happened too often and are used whether an employee is performing well or not. Some employees also say it’s a way for Amazon to terminate employees and that created the need for executives to develop Pivot.
While most managers dislike situations escalating to a performance plan, it can sometimes be absolutely necessary and many times they can provide a remedy to a difficult situation. The problem can be it can cause resentment from the employee but it also depends on why the plan is needed, how it is done and how it will be used. When performance plans are done correctly, it requires some work and follow-thru not just on the employee’s part but also on the supervisor, too. The purpose behind any performance plan should be to help the employee succeed and that’s also why regular meetings need to be held while the performance plan is in place. Both the employee and supervisor should meet together to develop a plan both think will work. Any goals established should be realistic and obtainable. It also provides the employee with an opportunity to have some feedback so they know whether they are doing something right or an adjustment is needed. It did not appear Amazon supervisors were applying PIP effectively.
Amazon added Pivot to give another dimension to performance plans. Executives said employees needed to be able to respond to the issues being raised when being placed on a performance plan. In addition, executives realized employees also needed the chance to maintain their employment since so many appeared to fail. That sounds like a great approach but, unfortunately, especially for employees, it hasn’t always worked out. As with the PIP process, there have been issues with Pivot, too, as both Bloomberg and Business Insider articles point out. Both articles describe the process. When an employee receives a performance improvement plan under Pivot, they have three choices they can make. They can quit and obtain their severance pay or they can work on some performance goals set by their manager or they can meet with a panel of their peers and tell their side of the story and the manager will give their argument. A fourth person, called a career ambassador, helps the peer panel with their decision and later informs the employee of that decision. The career ambassador is someone experienced in team and employee matters according to the job openings on Amazon and other job placement sites.
Again, the idea of allowing employees to respond to their performance improvement plan is important and should be part of any improvement plan such as with Pivot. Even though employees may show resentment, supervisors need to allow and listen to the concerns and issues the employee raises. There may be some reasonable counter arguments by employees that need to be taken into consideration. A good supervisor will do that and it can provide some help with the plan development. It also may be best to meet a day or two after the plan has been given to allow the employee to think about what happened, maybe to help eliminate some raw feelings and work on a rebuttal. It’s critical for supervisors not to wait too long from giving the performance plan because the behavior or issue needs to be addressed and it also is important to give the employee the time to work on improving the situation. This will allow the employee time to succeed.
The problem though with Pivot is it didn’t really make any improvements for employees or the performance plan process. It has been a band aid for the old process, PIP, and is one plan on top of another that has its own set of issues. For instance, the panel is supposed to listen to both sides of the story, from the manager and from the employee. They are then, with the guidance of the career ambassador, supposed to make a decision just like a jury. The panel members don’t know the employee and may not know the job the employee has done but can represent the employee. Even though they may represent the employee, it doesn’t mean they will decide in the employee’s favor, which apparently happened frequently. It also doesn’t mean the decision reached will actually result in an effective process that will lead to clear expectations or change of behavior. Another issue with Pivot is having peers decide the fate of a fellow employee is never a good idea because it can cause division, resentment and trust issues among employees which create a bad workplace environment. The culture becomes “us versus them.” In addition, it puts a burden on the employees on the panel of having to decide what happens to a fellow employee, and they, in turn, may be concerned about their own fate if in the same position.
Pivot is also a bad communication tool between everyone. When meeting with an employee to put them on a performance plan, it should be done in private without interruptions. There was no guarantee of privacy on at least two of the three choices. Having peers involved is not a good idea because it’s uncertain if they will keep the matter confidential. For most employees this can be an embarrassing situation and shows lack of respect for them.
In addition, video conferencing was used with the panel choice and that’s not a good way to resolve serious issues such as performance. No reason was given why video conferencing was used but meetings regarding performance should always be face-to-face situations. It demonstrates the seriousness and concern of the problem. It also helps to convey the sincerity of trying to resolve the issue, too, and can be a way to show a supervisor wants to help the employee succeed. Plus, there’s less of a chance of miscommunication problems. There are too many occurrences of technology breaking down which reduces the ability of everyone to actually listen and comprehend during the session. It also can mean important information could be left out.
There are other issues with Amazon’s performance plans but both plans show a much bigger underlying problem that occurs within Amazon culture and some other companies as well. That issue is the lack of understanding of the important role employees play in the success of the organization and why it’s necessary to help them succeed, too. It helps to establish the culture of an organization which can determine the fate of the organization. There have been stories of Jeff Bezos throwing out insults or criticizing employees. It’s not an example of good leadership and it doesn’t help the culture as that behavior will trickle down to others. This is not a critique of Jeff Bezos because he’s not alone. There are plenty of CEOs out there that exhibit similar behavior but it only hurts the organization. It may be okay for a short period of time but it will eventually drag the organization down if that continues. If an organization wants to be a success for both the short term and the long term, then they need to help employees be successful, too.