Background Information

In the 1990’s, the popularity of the Internet exploded and selling products over the world
wide web became a new avenue for business exploration. In 1994, Jeff Bezos, the founder and
CEO of Amazon, left his job on Wall Street to create an outlet for selling books online. In July
1995 the website debuted and quickly became the top online resource for purchasing books.
Today, Amazon is an internet based commerce and cloud computing company with
headquarters in Seattle, Washington. Amazon is currently the largest online based retailer in the
United States. Amazon started as a book store and later expanded to sell other audiovisual
products, clothing, furniture, food, toys, housewares, jewelry, and countless other products. The
company also offers e-commerce products such as Kindle e-book tablets, Fire tablets, TV, and
Fire phone. Essentially, what started as “Earth’s biggest bookstore” has now expanded to
“Earth’s biggest everything store”.
Historically, the vast scale and efficient operating business model at Amazon allowed
them to thrive despite the downward pressure on price. In 2011 and 2012 Amazon suffered a
decline in net income due to the small margins associated with the Kindle fire tablet. In 2013,
Amazon returned to profitability and netted a total of 274 million. This year, Amazon has out
rivaled Walmart as the largest retailer in the United States when ranked by market capitalization.
Summary of the Case
Amazon has been a source of controversy since its debut in 1995. Just recently,
Jodi Kantor and David Streitfeld of the New York Times published an article, “Inside
Amazon: Wrestling Big Ideas in a Bruising Workplace”, highlighting criticism directed at
the online retailer. Specifically, the ethics of certain business policies and practices were
drawn into question. The company has faced various allegations of monopolistic type
behaviors both in the media and in the court room. However, the Times article focused on
the accusations surrounding the mistreatment of workers within the corporation.
Unethical treatment of workers has been reported repeatedly, including allegations of
dismissals due to health related issues, anti-union agendas, and questionable mass layoffs.
There have been specific cases that have brought a lot of attention to some less
than favorable practices occurring at the corporation. In September of 2011 in Allentown,
PA, 20 past and present employees at a nearby Amazon warehouse were interviewed. All
but one employee criticized the conditions in which they worked and the employment
practices. Employees claimed that the heat in the warehouse was so extreme that
ambulances were regularly placed outside the facility to transport employees to the
hospital after they passed out. Another employee claimed that she was terminated due to
her contraction of breast cancer. The work environment was compared to that of a
“sweatshop”. Only after Amazon began selling foods and electronics that needed to be
kept under certain temperatures did they make a massive investment into cooling their
warehouses. Amazon has rarely made a business decision that did not affect their bottom
line, but many would like to believe that their was an element of humanity in their
decision to upgrade their warehouse environments.Another instance in the UK further
compromised Amazon’s corporate image. In 2013 the Daily Mail ran an article claiming
that Amazon was using employee GPS, “tagging and subjecting them to harsh working
conditions, describing employees as “human robots”. Secret cameras placed within one
of Amazon’s UK warehouses documented worker abuses and described the practices as
“horrendous and exhausting”.
Amazon has also opposed the formation of trade unions in the US and the UK. In
2001 850 employees were laid off after a unionization effort. The Washington Alliance of
Technological Workers proclaimed that the company had violated union laws in this
instance. Amazon has also been associated with The Burke Group, a consulting
organization hired to assist in the defeat of uniting any unions among employees.
The main focus of the article, however, is on the interpersonal culture in the
company. At Amazon, the workers are encouraged to rip apart each others ideas in
meetings and to be available at all hours of the night to answer emails and text messages.
The company seems to take pride in it’s unreasonably high standards. Amazon employs a
feedback system that allows every single employee to send secret feedback to one
another bosses. Many employees who were interviewed for the article claim that the
system is primarily used to viciously sabotage their colleagues. In a sense, the company
is performing a gross social experiment, testing the limits of the human work
environment. An Amazonian Human Resources director willingly refers to it as
“purposeful Darwinism”.
Amazon has also been notably discriminatory towards women in their work
environment. Pregnant women or those suffering from miscarriages, and other personal
crisis claim to have been evaluated unfairly or pushed out of the company instead of
being granted the approbate amount of time to recover. Motherhood is considered an
imposition in the Amazonian workforce. For example, Michelle Williamson, a 41-year-
old parent of three, said her boss had told her that raising children would most likely
prevent her from success at a higher level. Her boss said that Ms. Williamson had been
directly competing with younger colleagues with fewer commitments, so he suggested
she find a less demanding job at Amazon. The Amazon corporation has a clearly growing
gender gap, unlike its competitors. For example, Walmart, Facebook, and Google all
have woman on their top leadership teams, whereas Amazon does not have a single
female executive. Several former high-level female executives.
Women are not the only members of the Amazon culture suffering, however.
Amazon does not portray that catering to their employees is a priority. The company is
totally data driven and cut-throat. Compensation is competitive and employees are
encouraged to embrace frugality to a radical extend that many times includes paying for
their own work travel expenses. To be a good employee at amazon, longer lasting
employees saying that you must become “one with the company, you must become an
Amabot.”. The article is littered with horrifying and disheartening quotations such as:

“You walk out of a conference room and you’ll see a grown man covering his face,” he said.
“Nearly every person I worked with, I saw cry at their desk.”

“When you’re not able to give your absolute all, 80 hours a week, they see it as a major
weakness.”
 “I would see people practically combust.”

Those who do not wish to be dehumanized in this way suffer greatly, and typically
end up leaving the company. Jeff Bezos has denied the majority of the claims put forth in
this article and Amazon continues to thrive as one of the most profitable companies in the
world. Their tremendous success is admirable, but Amazon’s methods are being drawn
into extreme scrutiny. It is so important to consider what aspects of our humanizing
qualities and health are we willing to sacrifice for our careers and at what point does the
corporation need to take responsibility for the degradation of these qualities?

Three Key Problems

A huge issue associated with Amazon’s current business model is that they use a “rank
and yank”, or stack ranking, program. This type of system forces managers in the company to
constantly pit team members against one another, and the least productive team members are
continuously let go from the company. This type of program is ruthless and cut-throat, and it
ultimately results in the loss of valuable workers. A constant weeding-out process is encouraged,
and it isn’t always accurate. For example, those individuals who are ill or taking time off for
maternity leave may be fired in these situations. In addition, this type of system creates so much
resentment between employees that many talented and capable employees leave to work for
competitors. The rank and yank style programs create huge amounts of stress and lower morale
among employees. Very often, stack ranking cripples the ability for a company to foster
innovation. The team-based environment suffers tremendously because employees are so
ruthlessly pitted against one another. By this method, individual success is advanced very
quickly, but at the questionable cost of teamwork and collaborative efforts among employees.
Another issue that presents itself at Amazon is the feedback system that allows
employees to anonymously critique each other, at all times. The article purports that this type of
system isn’t very helpful, and its most prominent phenomenon that it encourages is the vast
amount of criticism between colleagues. The current system promotes harassment,
discouragement, and discrimination. It creates a high level of tension in the workplace and
among colleagues, and it only serves to decrease motivation and dedication. Perhaps, most
importantly, it completely diminishes any desire for employees to cultivate a positive team
environment. The current feedback system also hinders effective communication between
employees, which could potentially cause great ideas to be stifled by fear of harsh criticism.
Amazon also has a failing Human Resources department. Amazon has been faced with
many legal suits in regard to the way that they treat their employees. One of the main concerns
presented in the New York times article was Amazon’s lack of focus on workplace health. There
seems to be a complete disregard for the value of ergonomics, human factors, safety procedures
and protocol, stress management, and tension and hostility in the workplace. From here, there is
a downward spiral into issues with extreme anxiety about coming in to work and many other
forms of absenteeism. This also leads to a decrease in the quality of the work produced by
employees because it is harder to function under extreme levels of stress and anxiety. A
moderate amount of stress is actually beneficial to productivity, but that does not seem to be the
case at Amazon. The company’s HR department is also placing very little value on their work
life programs. As the article stated, the needs of many pregnant women, and terminally ill
employees are being shockingly overlooked. It is unjust for a company to demand an employee
to stake their job stability against a personal or family emergency.
Applicable Theories in Industrial Organizational Psychology
Amazon seems to be lacking a Positive Reinforcement element in their managerial
strategy. Reinforcement is such an important tool when a managers goal is to strengthen or
diminish certain employee behaviors. Reinforcement is also fundamental to developing a highly
effective team. Achieving a smooth work atmosphere can greatly benefit from the use of operant
conditioning. Essentially, the theory describes how the effects of praise and reward can be used
to shape behavior, and it can be especially helpful in the workplace. For example, offering praise
to an employee after their improve their numbers in the previous week will urge them to repeat
or even improve upon those numbers so that they can gain further praise. Examples of positive
reinforcement int he workplace are incentives, bonuses, early departure from work, casual dress
days, or in office game day or personal time. As time passes, positive reinforcement becomes
less effective because employees become desensitized to it. To avoid this stagnancy, the manager
simply needs to withhold the reward until the performance is continually improve upon. For
example, if a website designer at Amazon is able to complete is task and is continually rewarded
for completing it in 8 hours, after he is desensitized, the manager may begin to reward him if he
can complete it in 5 hours. This is a positive and very effective way to increase the efficiency
and quality of work being conducted.
Another applicable theory that could be useful for Amazon to consider is the Motivator-
Hygiene Theory (also called the Two-Factor Theory). In recent years this theory has been helpful
in transforming many organizing in terms of employee motivation, which seems to be lacking
among Amazon employees. This theory is based on the idea that an employee has two basic
needs in the workplace. The first is motivator needs. These needs create job satisfaction and are
considered the higher needs within the theory. Motivator needs can be satisfied by providing
challenging, stimulating, and interesting work. When the lack of an appropriate level of
challenge is present, employees will become dissatisfied. The lower level needs for this theory
are referred to as hygiene needs. Examples of hygiene needs are company policies, work
conditions, supervisor, salary, and a variety of external factors that directly affect the employee.
When these needs are met, it does not result in job satisfaction, but job dissatisfaction is
prevented. This theory is important to consider because they emphasize the importance of job
enrichment. When this theory is put into action, job enrichment is boosted. The potential of every
single employee is maximized because they are able to consciously recognize the opportunities
that they are given to promote their own satisfaction and to reduce their dissatisfaction at work.
Cognitive dissonance is another important concept to consider in regard to the
Amazonian workplace. Cognitive dissonance stemming from this underlying workplace
dissatisfaction results in an array of unfavorable effects. Stressed employees are likely to being
withdrawing and disengaging from their tasks and projects. Absenteeism increases as employees
find it easier to emotionally justify lack of contribution. Withdrawal and disengagement is also a
common occurrence which can lead to significant reductions in performance across the board.
Stress is not the only contributing factor, however, as other negativity and inappropriate behavior
may surface in the forms of disappointment, anxiety, and anger. Unfortunately for Amazon,
these negative emotions commonly manifest themselves in the form of counterproductive
behaviors which include: silent obstruction, malicious compliance, sabotage, and cyber loafing.
Overall, cognitive dissonance and the associated issues result in a high rate of staff turnover. In
terms of Industrial Organizational psychology, this is often has negative consequences for the
business in question. Dramatic losses are suffered for the business in the realms of organizational
practices, recruitment, training, and development. When employees develop hostile attitudes
stemming from these issues, the reputation of the business can suffer dramatically. This puts an
enormous amount of strain on recruitment and future hiring efforts.
Why Amazon Should Care
The most glaring consequence associated with working for Amazon is the associated
health risk. Employees at amazon are caught up in a frantic cycle of dread and stress related
responses. Employees are driven to work very long hours, sacrificing sleep and periods of mental
rest. Employees at amazon experience extreme insecurity due to the constant flux of their job
security. This type of system creates a pattern of unhealthy behaviors in workers and it promotes
negative health consequences. Recently, a study has suggested that almost 120,000 excess deaths
and 190 billion dollars of health care costs, annually, are due to stress at work. This high-risk
health environment is being encouraged by the Amazon corporation, and cognitive dissonance is
playing a major role in the issues that are arising from these practices. Cognitive dissonance in
the workplace is common and it causes a significant amount of stress for professionals.
Individuals are coerced to tolerate, support, and contribute to projects that are in conflict with
their underlying sense of right and wrong, ethical practices, and personal beliefs or values. When
work practices are so deeply discomforting, they create a deeply seeded feeling of stress and
anxiety that serve as chronic threats to a persons overall well being. Not only does the work
environment create health related issues, but employees are seemingly punished for them as well.
As the New York Times article mentioned, countless individuals working at Amazon were
penalized for sacrificing their work schedules to seek medical treatment or to take care of their
newborn children and terminally ill family members. In sum, amazon is asking their employees
to emotionally trade their personal values for future rewards that may or may not be awarded to
them.
Possible Solutions
Important changes that should be considered by Amazon right off the bat are as follows:
Abolish the Feedback Tool that encourages anonymous criticism between employees
Abolish the Levels system that classifies workers by number and letter
Abolish the Stack Ranking system
It is clearly important to abolish these practices because, simply put, they are
dehumanizing. They undervalue the potential of all of the employees within the company. The
most glaring obstacle involved in making these changes is the resistance from the company. Jeff
Bezos has denied claims that the workplace is an unhealthy environment. However, it is clear to
most that making these changes would incredibly beneficial for the company because behaviors
and attitudes of employees can be improved through the development of consistent and fair
hiring practices, training programs, and feedback systems. There is a lot of needless burnout that
is occurring at Amazon and it could be prevented if they followed a more concise and organized
strategy to hire and manage employees.
Amazon needs to place more focus on their hiring and training process. Testing should be
implemented to assess the job knowledge, skill set, personality, and physical abilities of the
potential employee. Interviews conducted should be structured and the hiring process should be
more refined. The training and development of employees needs to focus on computer-based
learning, executive coaching, management development, mentoring, and leadership. Team
design and training needs to be heavily encouraged and measuring training effectiveness needs to
occur regularly.
It is obvious that Amazon does not prioritize the fostering of employee attitudes and
satisfaction. Because the company itself is so profitable and high performing, they set the
importance of this aside. Involvement and empowerment need to be encouraged amongst
employees otherwise, retention of qualified employees greatly suffers. If job satisfaction is not
nurtured, corporations begin to see burnout, conflict, and stress related issues; all of which lead
to preventable resignation, voluntary turnover, and the formation of a negative image for the
company. Employee motivation must be encouraged so that these issues can be prevented.
Amazon also needs to address their organizational development protocol and their current
human resources management system. Management needs to focus on strategic planning to
reengineering group processes that boost productivity and quality improvement. Surveys also
need to be given to assess and reevaluate the climate and culture of the workplace. These surveys
should be given to all employees and managers and should address the following:
Job design
Organizational Structure
Team Building
Downsizing and Rightsizing
Cross Cultural and Diversity Issues
Availability and Functionality of Technology
Customer Service Issues
Feedback Systems
Human Resources also needs an overhaul at Amazon. Workplace health should become a
huge priority for the Amazon HR department. Ergonomics, human factors, safety, overcoming
stress, and workplace violence (i.e. inappropriate levels of conflict) should be addresses in an
organized and structured fashion. Compensation and benefits also need to be structured.
Employees should be aware of what they are required of to receive pay, perks, rewards, and
recognition. Amazon is currently undervaluing positive reinforcement in this respect. Employee
behavior should be addressed more stringently as to prevent the hostile competition that
currently exists within the amazon company. Hopefully, positive changes in these regards could
lessen harassment, absenteeism, and disciplinary issues. Work life programs are also extremely
compromised at Amazon. There is no structured system for flexible work arrangements, quality
of work life, work-life balance, working parents, maternity/paternity leave situations, and
telecommuting.
The feedback and labeling systems for employees at Amazon are absolutely abhorrent. It
is important for them to make a change in the way that they conduct performance evaluations
and assessments. The design of job performance measurement systems for feedback and
performance improvement need a complete overhaul. The current feedback system promotes a
hostile environment and needs to be abolished and replaced with a system similar to the check-in
system that was implemented at the Adobe corporation.
Conclusion
Following the New York Times story about how Amazon treats its workers, the company
has faced a great deal of backlash. It’s hard to read this article and not come away with the
feeling that something is very wrong. There seems to be an excessive amount of needless
burnout and negativity stemming from bad elements of company culture. This particular article
has initiated a widespread debate over how Amazon and the technological industry, as a whole,
treats its workers. The practices outlined in this case analysis highlight the unethical business
practices that are becoming commonplace in some of the worlds largest corporations. Amazon
and other similar businesses are soaring to the top of the worldwide market and this is causing
many people to ask, “At what cost?”. Ideally, CEO Jeff Bezos would consider the psychological
and ethical mistakes of the company and put forth an effort to make some drastic changes. Much
like Adobe, Amazon could benefit from a serious Human Resources overhaul. The culture and
workplace conditions need to become Amazon’s priority. If Amazon could develop a work
environment that encouraged a healthy and happy workforce, while continuing to deliver
amazing customer service in a sustainable way, the world would begin to see positive change in
the lives of millions of people world wide.

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