Amazon comes under scrutiny for workplace culture

Amazon has become a hot topic of online debate in recent days, ever since a New York Times article on Saturday portrayed the company as a cold-hearted workplace that demands results from employees with little regard for personal cost.

The newspaper reported that Amazon workers who were fighting cancer or had suffered a miscarriage believed they were treated as problems. It cited the experience of one former Amazon marketer, Bo Olson, as follows: “His enduring image was watching people weep in the office, a sight other workers described as well. ‘You walk out of a conference room and you’ll see a grown man covering his face,’ he said. ‘Nearly every person I worked with, I saw cry at their desk.’”

The report also said Amazon uses data to constantly monitor employee performance.

After the article appeared, Amazon’s chief, Jeff Bezos, sent a memo to employees in which he said the “shockingly callous management practices” described did not match “the Amazon I know, or the caring Amazonians I work with every day”.

Mr Bezos wrote that in fact the Amazon approach was not to create "a soulless, dystopian workplace where no fun is had and no laughter heard … I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay. I know I would leave such a company."

Below are three perspectives on the matter.

One: it lacks empathy

The New York Times can take at least some consolation in getting a response from Bezos. A similar depiction of the company's cut-throat culture in my 2013 book, The Everything Store: Jeff Bezos and the Age of Amazon, earned ire only from Mr Bezos' wife, Mackenzie, in the form of a one-star book review on Amazon.

But there is now plenty of fodder to support the narrative that the secretive beast is not always a pleasant place to work.

While 82 per cent of respondents on the job-search site Glassdoor say they approve of the chief executive, only 62 per cent would recommend a job there to a friend. That is much lower than Amazon’s peers.

The byways of technology, particularly in Seattle, are now filled with former Amazonians who will eagerly dredge up stories of inhumane treatment. Many seem to be touched by a form of post-traumatic stress disorder. They did witness the kind of working conditions described in the Times story and burnt out quickly, leaving within a year or two and abandoning their stock options.

It is important to note, though, that there are also many former employees and executives who will testify on Amazon’s behalf. They consider the company to be an energetic and productive place to work that doesn’t tolerate the kind of mediocrity infecting many other tech giants and that moulds employees with a disruptive way of thinking. That is why Silicon Valley start-ups, such as Uber, try to recruit from Amazon as much as possible – they are familiar with the demanding pace of work that is required when you are tearing down old institutions and creating new ones in their place.

Experiences largely vary by division. The conditions described in the Times piece likely have little to do with the engineering paradise of the Amazon Web Services division or its growing Amazon Studios arm in Los Angeles. Based on my interviews with current and former employees, the pace of work actually seems to be most intense and unforgiving in the areas where Mr Bezos himself has direct interest, such as the Kindle e-book division or the Lab126 hardware group in Cupertino, California.

The more serious allegation against Amazon is the way it treats sick employees and, in particular, women. One possible solution should be clear to Mr Bezos and his top lieutenants – they need to add an entry to the company's vaunted "leadership principles", the 14 written values that guide new employees and mould the thinking of executives. The new 15th principle should read something like this: have empathy. Brad Stone, Bloomberg

Two: it has admirers

For high-level Silicon Valley types, though, the corporate culture portrayed in the newspaper article was actually something to admire – even two decades after its founding, Amazon still acts like a scrappy start-up.

Instead of free food and lavish benefits, Amazon offers something more like a perpetual boot camp. While this approach will never land Amazon on a 100 Best Companies to Work For list and leads to pretty high employee turnover, that high turnover is endemic in the tech world anyway and the company seems likely to stay the course as long as it delivers results.

When “work comes first” is the message from the top, of course you are going to get ambitious midlevel managers who give employees low performance ratings for getting thyroid cancer, or who think it’s OK to build a distribution centre in Pennsylvania with no air conditioning, then station paramedics outside during heatwaves to treat stricken workers. That does not mean Mr Bezos wants his people doing those specific things, just that they are in keeping with the overall corporate ethos of putting customers first and being frugal.

In the case of the Pennsylvania warehouse, after the local Morning Call newspaper published an in-depth look at the appalling conditions, the company spent $52 million adding air conditioners there and at other facilities around the country. It had been mistreating low-wage workers who had few options, and deserved to be shamed into changing its behaviour.

As for its treatment of white-collar workers in Seattle, I am not sure that, apart from the occasional mistreatment of the ailing that Mr Bezos now says will not be tolerated, there is much for Amazon to be ashamed of. These are people who, for the most part, do have options and alternatives – and many of them choose to leave. But many actually thrive in Amazon’s tough environment, and do not perceive it as unpleasant. That was the message I got from The New York Times article, and also from Nick Ciubotariu’s much-read LinkedIn defence of life at the company. The latter is a silly, unnecessarily defensive piece of writing. But clearly Mr Ciubotariu, the head of infrastructure development for the company’s “search experience”, has had a rewarding 18 months at Amazon. More power to him.

The bigger question is how long Amazon can keep this up. Rivals such as Google, Apple and Facebook can sometimes seem to be in possession of secret recipes, formulas that allow them to keep churning out massive and rising profits year after year. Amazon has never made much in the way of profit. Its main competitive advantage may well be its willingness to accept razor-thin or negative margins. This is a company that simply cannot afford complacency.

So far Amazon's ambitions and its rising stock price – there was an eight-year lull after the dot-com bubble, but in general the trajectory has been upwards – have enabled it to keep attracting great people and driving them hard. The hiring approach feels a little like the traditional law or consulting firm set-up – bring in lots of really smart young people and work them hard, with the understanding that only a minority get to stick around as partners and get rich. Justin Fox, Bloomberg

Three: it’s catching

Amazon is not the only company that is using data on employees to raise productivity. Experts say the kind of data-driven staff management Amazon uses is set to become more common as technology continues to transform the US workplace.

“Every company is somewhere in process toward using data to get a better handle on who their top performers are and to understand where people stand,” said John Challenger, chief executive of outplacement consultancy Challenger, Gray & Christmas.

Companies, both large and small, have been moving away from traditional human resources reviews that rely on annual performance evaluations. They are moving toward a more data-driven approach with more frequent feedback, check-ins, and other metrics.

The consultancies Accenture and Deloitte both said this year they would revamp their performance-review processes, for example, adopting a more data driven approach that includes more frequent ratings by managers and other internal feedback and data that can be aggregated and analysed to provide a better portrait of performance than a single rating. In an essay in the Harvard Business Review, Deloitte said the new approach uses "the technology to go from a small data version of our people to a big data version of them".

Tech companies have been even speedier in applying data analytics to staffing. Google, for example, uses data to figure out how to put together optimal-sized teams for projects and figure out what makes effective leaders.

Paul Hamerman, a Forrester analyst who focuses on human resources management and financial applications, says the future may look more like what Glint, based in Redwood City, California, is offering clients. The company, with clients including music-streaming site Pandora and marketing automation company Marketo, sends employees what it calls “pulses”, or short surveys about how they are feeling and how they feel about their job.

The Glint chief executive Jim Barnett said the surveys let executives see how the health of their employees and company are faring in real time, in the same speed with which they might be able to check sales results or marketing impressions. and their data can be aggregated to give a clearer picture of how employees are faring overall.

“The old mentality was once a year we would check in with an annual survey, have an annual review, set goals,” said Mr Barnett. “What we have learnt is the world today moves much faster than that.”

One of Glint’s clients, Marketo, was able to use the data gleaned from the “pulses” to see that women in one department were ranking their work/life balance substantially lower than expected. The company found a staffing shortage in that area and increased its hiring.

“What they were able to do was to go in and increase the staffing before they had significant attrition,” Mr Barnett said. “The beauty of systems like this is you are able to link actions to outcomes.”

The downside to a data-driven approach is it can seem "Big Brother-ish" to staffers. Mae Anderson, Associated Press

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