Back in January, I wrote about some of the intriguing aspects of Netflix’s human resource policies. One of these policies was that they provide generous severance packages to people they don’t feel are performing at a superior level. (Look for the reference to slide 22)
Back in April, Amazon CEO Jeff Bezos sent a letter to investors outlining his company’s policy to offer warehouse employees up to $5,000 if they decided to leave the company.
While the Amazon offer based on a voluntary decision, like Netflix the policy it is based on the idea that an employee who isn’t motivated or completely proficient at their job is a threat to the long term health of the company.
So the question for a lot of companies and organizations is, is there an employee whom you might wish would take advantage of this opportunity if it was presented to them? If the answer is yes, the question that follows is, then why do you keep them around?
For non-profits, the obvious answer probably is that there are a lot of things you can accomplish with that $5000. You can’t just tie up that much money for even a portion of your employees against the day they decide to quit.
The amount of the severance pay doesn’t matter. The whole premise behind Netflix and Amazon’s policy is that they stand to lose more than they will payout if an ineffective person remains with their company. Figure out what that number is for you over the course of 5 years or so, and you have your severance pay.
If your answer is that the person means well and is enthusiastic, then you have to consider if you are actually acting as a good steward of the trust and funding invested in you by your supporters by employing a person who is not operating at close to the potential of someone in that position.
If your answer is that they are willing to work at less than market rate so you save money, then the question might also be if you are subjecting your clientele to poorer treatment than they deserve in the name of saving money.
The hiring process is an expensive one in terms of time, money and other resources so no one wants to be engaging in a replacement search every few months. This all goes to underscore the importance of high quality human resources and hiring practices right from the outset so you are attracting and retaining the right people. If the local talent pool doesn’t appear strong enough, it might require identifying overlapping applicable skillsets possessed by people outside your immediate field.