Case Study: Zappos - Getting Paid to Quit

Telling your employees to quit might be the best way to keep them (the good ones, anyway). At least that's the thinking behind Zappos CEO Tony Hsieh's plan to pay any employee $1,000 to quit the company. Employees who can't contribute--for whatever reason--take the money and run.

It's definitely a splashy new story--CEO pays employees to quit!--but does Hsieh's plan work? It certainly could, but it requires companies large and small to have a few crucial elements in place before a plan like this should be implemented. In order for the plan to work, a company needs, at minimum:

1. A rich core values ideology that translates into an identifiable work culture. Hsieh decreases the chances of having too many employees that are a bad fit by screening them before they're hired, and then engaging in an extensive training period (during this time they are being paid as regular employees). "We interview people for culture fit," Hsieh stated in 2006. By having a strong identity and a training program, Zappos makes sure that anyone that doesn't share the same ideology is quickly weeded out.
2. Accountability. Business leaders can't just pay lip service to a certain philosophy of management--he or she has to make sure that the ideology of the company permeates the entire organization. This means holding under-performers accountable at every level, from entry level to senior staff.
3. Investment in employees. Hsieh's plan is meant to attract and keep only the best and most capable employees. Capable employees will leave if a job isn't what they signed up for. That's why in order to minimize turnover, a business needs to do one simple thing: make staying more attractive than leaving. Investing in an employees' future makes staying more worthwhile, especially for those who are especially talented because it allows them to build on previous skills, and learn new ones. Employee investment may come in the form of professional development offerings, or the type of personal investment discussed in books such as The Dream Manager, but it has to enter the picture somehow in order for a company to retain the best talent for as long as possible.

You can't overstate the importance of these three points, especially the one about core values and work culture. Zappos' culture is unique and forward-thinking (many of Zappos' employees post on social media sites such as Twitter), and it's what sets Zappos apart from their competitors in the shoe industry, as well as the job market.