Amazon’s Workplace Culture Analysis

THE FEEDBACK CULTURE

Every employee at Amazon is requested to abide by 14 leadership principles. One of these, “Customer
Obsession”, illustrates the company’s commitment to serving its customers, which is reportedly prioritized
over employee engagement or satisfaction.

Although the company keeps its internal processes a secret with confidentiality agreements signed with each
employee, there have been endless rumors about employee breakdowns and controversies. In fact, a 2013
survey by PayScale revealed that Amazon has one of the lowest employee retention rates among other
Fortune 500 companies. The interviews made by The NY Times journalists Jordan Kantor and David
Streitfeld reveal that one reason is the company’s feedback culture. The article claims that each employee is
encouraged to harshly criticize coworkers’ ideas and they are instructed on how to send secret feedback to
one another’s managers. It is also claimed that the feedback culture is too open to abuse and it is often used
for undermining the work of others.

THE STRUCTURE

Designed by Amazon, the feedback system at Amazon is made to push the limits of each employee, which
is described by some Amazonians as “an intricate machine propelling them to achieve Mr. Bezos’ ever-
expanding ambitions”. Amazon’s difference is its ability to quantify every aspect of its business. Also
applied to its performance management, Amazon holds weekly or monthly business reviews, where each
employee is held accountable for an array of metrics.

Kantor and Streitfeld claim that employees receive these data in print form of 50 to 60 pages. During these
reviews, employees are often tested on their knowledge of these metrics. These sessions are told to be long
and exhaustive, with preparation and discussion of the metrics consuming a substantial amount of work
hours.

PROVIDING FEEDBACK

Amazon currently uses its internal tool for making feedback available between employees. Called Anytime
Feedback Tool, employees can directly send praise or criticism about their coworkers with the system. The
feedback is sent directly to the manager of the person receiving the feedback and the identity of the feedback
provider is only revealed to the manager.

Amazon spokesman Craig Berman informs The NY Times that the tool only provides a way to share
feedback with one’s manager in a way similar to having a 1-on-1 conversation. The system is akin to
Workday’s Collaborative Anytime Feedback. Considering that Bezos was one of the earliest investors of the
human resources management company, this comes as no surprise.

THE OUTCOME

Another claim made in The NY Times piece is how Amazon uses the feedback provided by co-workers to
managers as the basis for creating a list of bottom performers to let go annually. Each year Amazon
organizes Organization Level Reviews, where top and bottom performers are presented to the board of
managers. Named “purposeful Darwinism” by one former Amazon HR director, the system is apparently the
traditional ‘rank and yank’ process in disguise.

Managers reported to The NY Times that preparing for these reviews is similar to getting ready for a court
case. Often, managers have to come armed with proof to defend their employees against unfair accusations.
And in some cases, supervisors resort to choosing a scapegoat in order to keep the most essential team
members.

THE CRITICISM
While companies such as Deloitte aim for a comprehensive way of measuring performance that accounts for
personal lives of its employees, there are cases at Amazon where personal problems are viewed as liability
and employees are put under performance improvement plans. To give an example, one former employee
reports that Amazon decided to monitor her performance "to make sure her focus is on the job” after she had
a stillborn child.

Using individual experiences of former employees for chastising people management policies of a company
might not be just. In fact, Jeff Bezos recently sent an internal memo company-wide, stating that the article
does not describe the Amazon he founded and requested from his employees to report any unfair treatment
to the HR. He further claimed that working in a company like the one described in The NY Times would be
“crazy”. Another Amazon employee, Nick Ciubotariu, wrote a piece on his LinkedIn account, offering his
own stand and rebutting the claims made by the original article. In his article, he states that The NY
Times based its claims on past practices that were already improved upon and that the article is a “horribly
misinformed piece of journalism”. For this reason, giving claims of The NY Timesarticle the benefit of the
doubt is only fair. However, Bezos’ and Ciubotariu’s stands are also undeniably biased and one-sided.

The most fair, and relevant, criticism for Amazon’s performance management would be its structure. The
system endorsed by Bezos supports meritocracy, where ideas are forced into competition and the best ones
win. This kind of competition lays the groundwork for unhealthy workplace environment where everybody
has to outperform others. The harsh nature of the feedback culture adopted at Amazon is different than the
ones applied at other innovative companies such as Facebook, Google or Adobe. The company’s
performance management philosophy places too much pressure on the link between employees’ individual
performance and the company’s overall success from the very start. The misinterpretation of the ownership
culture results in employees overwhelmed with the responsibility given to them. Coupled with the reportedly
hostile language used during these feedback sessions, employee morale is probably not doing so well at
Amazon.

LEARNINGS
Taking the side of The NY Times article or of the counterclaims made is a pointless attempt at best. More
important are the learnings that we could obtain from the whole debacle. At a time when big companies such
as Deloitte, Accenture and Adobe are changing their performance management systems, it is important to
tread very carefully in handling people management.
One major downside of the feedback system at Amazon is that it does not enable employees to see feedback
themselves, they can only hear about it from their managers. However, this goes against the whole purpose
of performance management, which is to help your employees grow. For this reason, we at Impraise believe
in empowering employees with feedback. Employees can initiate their own feedback cycles and choose to
share them with their teams or managers only when they want. This way, employees are enabled to take
ownership of their own development without worrying about negative feedback. 360-degree feedback
sessions are initiated by managers but even then the feedback is completely transparent.

Another issue with Amazon’s feedback system is the complete anonymity of the feedback. This makes it
easy to abuse feedback for sabotaging others. On Impraise, the feedback is also anonymous by default, but
users can choose to reveal their identities when providing feedback. In the case of unfair feedback, managers
can view feedback with complete transparency to settle any conflicts.

Continuous feedback should not be viewed as a replacement to the whole performance management cycle.
We believe that 1-on-1 conversations are still more important than anything as far as employees’
development plans go. We built Impraise to serve as a tool for saving time on feedback cycles, so that
managers can have more time conducting 1-on-1 conversations with their employees.

Last but not least, culture management is even more important than introducing new tools for managing
performance. Without proper training on how to provide feedback and how to ask for it, new tools and
methods will not be able to change performance management for the better.