Monday, February 9, 2009

Paying New Employees to Quit

Let's say you've just started a new job and you are going through the company's initial 4-week training program. One week in, a company representative approaches you and offers you a nice little bonus to quit. Sound strange? Well, it's the approach online shoe retailer Zappos takes with its new customer service reps. After the first week of training, new hires are offered a bonus of $2,000 (plus they get paid for the time they have already spent in training) to quit. Reportedly, about 2% - 3% take the offer.

Nice way to ID future weak employees - the weakest ones are the ones most likely to take the offer and quit. This article also speculates that it provides the company an incentive to do a better job with initial screening of trainees to avoid paying out the quit bonus. I wonder if the evaluation/compensation of those who actually do the screening is tied to later payment of the quit bonus. If not, I don't think it's likely that it will affect their screening behavior.

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