Saturday, July 26, 2008

FIGURING OUT FREE AGENTS

PAYING EMPLOYEES TO QUIT

You've heard of a sign on bonus, but likely not a sign off bonus. While most companies dangle cash to lure employees to join their ranks, one company literally pays its employees to quit. In his blog for Harvard Business Publishing, Bill Taylor explores the innovative approach being taken by Zappos, a Nevada-based online shoe seller.

Why would a company reward its quitters? At Zappos, quitters get a parting gift of cash so that the company's pristine track record of customer service is preserved. By giving employees financial incentive to leave, Zappos weeds out uncommitted workers before they ruin the company's reputation.

Here's how it works. Zappos has high standards for its call center employees, who are expected to provide stellar service to its customers. After an intensive interviewing process, call center candidates enter 4-weeks of immersive training. After a week of training, Zappos makes an offer: either the candidate agrees to fulfill the rigorous demands of their role, or they walk away with $1,000, plus payment for their week of labor�no questions asked.

Some managers may balk at the steep cost paid to those who depart. However, for Tony Hsieh, CEO of Zappos, the quality of a customer's experience is well worth the financial cost incurred to find the right people for the call center. Does Zappos' counterintuitive strategy actually work? Accordingly to Bill Taylor, it's a smashing success.

Zappos has also mastered the art of telephone service�a black hole for most Internet retailers. Zappos publishes its 1-800 number on every single page of the site�and its smart and entertaining call-center employees are free to do whatever it takes to make you happy. There are no scripts, no time limits on calls, no robotic behavior, and plenty of legendary stories about Zappos and its customers.

Zappos' leaders are betting the outstanding performance of highly engaged workers will more than offset money paid out to malcontents. And it's a bet they seem to be winning.

Taylor closes with a final point about the business-customer relationship. "Companies don't engage emotionally with customers," he writes, "If you want to create a memorable company, you have to fill your company with memorable people." Business boils down to relationships, and relationships happen between people. Are you attracting the best people to join your ranks? What price are you willing to pay to find out?

To read more of Bill Taylor's insights about the novel business practices of Zappos, visit Harvard Business Publishing.

Taken from http://www.injoy.com/newsletters/leadership/content/printerfriendly/11_13.htm#2

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