Strategic Human Resource

Management Mini Project

On
Amazon

Submitted By :
Ankit kumar
Akanksha Tripathi
Baishalee Sahu
Ayushi Sarkar
Palak Luthra
Preeti Padhy

Submitted To:
Dr.S.Dhanabagiyam
Associate Professor
NSB Academy, Bangalore
Executive Summary

Amazon is known for its successful HR practices and high profitability. It is

implementing various strategies in terms of HRM to improve the cooperation of
employees and managers based on the commitment to the company’s values and
skills development. However, the existence of unique procedures of employment,
performance management, and career development contribute to the creation of an
effective, but harsh environment. Therefore, specific improvements in Amazon’s
health and safety practices and its compliance with the ethical standards are needed.

Amazon is one of the examples of companies implementing HR practices for their

benefit. Despite the existence of numerous initiatives and programs intended to
improve cooperation with the employees, the company’s managers still face enough
issues that need to be resolved. They relate to all the spheres of Amazon’s activities,
from competencies of its workers to the compliance with health and safety measures.
Since human resource management was the major company’s weakness in its first
years, it is necessary to track the progress in this area and address the shortcomings in
order to increase productivity.

History of Amazon and its Place in the Industry

The history of Amazon explicitly reflects the intentions of its founder, Jeff Bezos, to
turn it into a big and fast-growing company. Nowadays, it is the largest retailer and
provider of web-services in the world (Ferracone, 2019). Amazon was established in
1995 as a company selling books online, but soon enough turned into a huge
enterprise in e-commerce focused on various goods (McFadden, 2019). However,
such rapid progress should be conditional upon specific management actions in terms
of generic strategies.

The essential resources of the e-commerce company are people working for it as well
as buying its products. As for customers, it is easier to attract them by demonstrating
the distinctive characteristics of the company to make them choose its goods or
services. Such measures can be reflected in a single action or a specific policy
established from its foundation, whereas the recruitment and retention of personnel
require more complex policies. At present, this American corporation is comprised of
approximately 560,000 employees, and this number allows to conclude on the
efficiency of its human resource management (Courtney, 2018). Nonetheless, it is
essential to maintain this amount and attract new talents for further benefit, and this
task includes regular changes in the human resource policies of Amazon.

HR Policies, Practices, and Strategies at Amazon

The success of any company is based on the proper management of its resources, and
Amazon is no exception to the rule. Its policy not only proves to be effective over
time but also represents a unique model of management. It is evidenced by the fact
that it received the 2018 Human Resource Management (HRM) Impact Award for its
program presented as “Simulation Strategy to Scale and Preserve the Candidate
Experience” (Amazon, PepsiCo win HRM impact award, 2018). However, the result
reflects not some short-term measures, but long-term work carried out for the
achievement of this target.

The principal HRM policies of this organization refer to specific measures aimed at
the provision of equal opportunities for all employees. They include anti-harassment
and non-discrimination in the workplace. Such provisions are guaranteed by the
Amazon’s Code of Conduct available on the company’s website (Code of business
conduct and ethics, 2018). They are complemented by the safety and health policies,
which are of primary importance for the company (Code of business conduct and
ethics, 2018). Hence, Amazon provides a safe environment for all employees without
discriminating against any of them.

The HRM policies of Amazon are also reflected in their strategy of creating
independent leaders who can manage their activities and help the others to develop
specific skills necessary for work. Hence, the successful implementation of their
policies requires the development of its unique philosophy as a ground for future
prosperity. The ground for HRM policies at Amazon is the six core values or
leadership principles presented to all the new workers (McCracken, 2019). They
include customer obsession, ownership, frugality, the bias for action, a high bar for
talent, and innovation (McCracken, 2019). Thus, leadership starts with the orientation
towards target customers and particular attention paid to them.

Human resource management practices at Amazon reflect their philosophy of

leadership. They align with the SHRM theory, according to which all decisions in
terms of human resources should match the basic strategy of the company (Sagar,
2019). Their strategy refers to obtaining long-term benefits with the help of qualified
human resources. Hence, the key objective of Amazon is the creation of the right
leaders through training and promotion of required skills and qualities. These leaders
are supposed to increase the company’s competitiveness in the market.

As for team working, the policies of Amazon are different for full-time and part-time
workers as they are acting separately. The part-time employees’ conditions are less
stressful, and it allows them to have a better balance between the time they spend in
the office and with their families (Petrillo, 2016). The company’s managers believe
that the division of part-time and full-time workers promotes flexibility of Amazon
and makes their teams more productive. Their high performance is also conditional
upon a system of feedback, which allows the employees to criticize and praise one
another.

The success of Amazon’s HRM policies can be measured by the turnover of

employees. The company perceives HR practices as the instrument for talent
acquisition and retention, ensuring a better understanding of customers’ needs through
following the guidelines for efficient leadership. Nonetheless, this approach seems to
be quite harsh for the company’s workers as the constant race for correspondence to
its standards might result in a higher level of stress, not in increased productivity.
HR Competencies for Effective Workforce Planning

The company’s efficiency is mainly achieved through the use of proper methods of
workforce planning. Hence, Amazon’s HR competencies are viewed in relation to its
core policy towards human resources and reflect the company’s strategy of long-term
benefits. As the successful implementation of this strategy requires the
correspondence of such competencies to the six values of leadership mentioned above,
they align with the SHRM’s competency model (Strobel, 2016). According to this
model, there are several essential competencies of business leaders, ensuring the
progress of the company.

The HR competencies of Amazon primarily refer to the leadership qualities that

allow managers to motivate employees and create a positive attitude towards the
company’s progress. They also include the ethical aspect of Amazon’s activities,
which means
that employees need to understand and respect the company’s ethical guidelines.
Moreover, they need to see the connection between their HRM practices and
essential business perspectives (Strobel, 2016). Another competency is related to the
ability of a leader to maintain interpersonal relationships for better communication
with clients and co-workers. In the case of Amazon, the company’s leaders not only
maintain its activities but act as consultants for other employees.

Together with the essential leadership competencies valued by Amazon’s managers,

there are several soft skills that allow an employee to become successful at work.
Such HR competencies include confidence, curiosity, enhancing the learning process,
listening skills, global vision, teamwork, and an employee’s ability to track his or her
progress (Premack, 2018). Thus, the image of an ideal worker for the company is a
confident person focused on improving his efficiency with excellent skills in
cooperation with other employees and planning his work.

HR Theories Regarding Effective Recruitment and Selection

The success of the company’s activities is defined by a human factor, and, therefore,
it is vital to develop specific guidelines for recruitment and selection of new
employees. The primary task for HR managers at Amazon is to ensure their suitability
to the existing practices and understanding of the company’s long-term strategy. For
this, Amazon hires so-called bar raisers, the interviewers making decisions on the
employment of workers (The Amazon blog DayOne, 2019). This approach allows
them to focus on the quality of personnel rather than their quantity.

As Amazon needs highly innovative people, specific tools should be implemented to

assess their suitability. Bar raisers are the people outside the company who are
entirely objective in their assessments and able to apply the leadership principle to
potential employees (The Amazon blog DayOne, 2019). They evaluate not only the
existing qualities of candidates but also the perspectives for developing the ones the
company needs most. Their responsibilities include the assistance to hiring managers
in preparing questions for interviews. The need for objective evaluation is conditional
upon the intention of Amazon to hire long-term employees. Thus, Amazon combines
the efforts of its leaders with unbiased specialists from third parties to make the right
choice of future employees that would suit best the company’s needs.
The process of recruitment and selection is completed by interviews, in which bar
raisers and hiring managers of the company participate. The interviewing is simple,
and it consists of several stages intended to evaluate the prospective worker (US Day
One Blog, 2020). Its purpose is to check his suitability to the corporate culture in
addition to the already assessed qualities. Hence, together with answering frequently
asked questions, candidates need to demonstrate their understanding of Amazon’s
culture, ability to cope with risk based on prior experience, and technical skills.

The combination of methods used by the Amazon managers and bar raisers
corresponds to the theory of recruitment, selection, and retention. Accordingly, the
HR practice at the company is characterized by a clear vision of what employees they
need, what competencies they should have, and how to select suitable people so that
they would become long-term workers with high performance (Bean-Mellinger, 2019).
The existence of an established hiring practice allows Amazon to attract the best
talents with the vision of the company’s prospective development.

HR Processes, Systems, and Strategic Goals

The implementation of HR practices requires constant attention from Amazon’s

managers as they need to respond timely to possible changes in the company’s policy
towards its employees in a timely manner. They also need to align with the current
strategic goals for compliance with its long-term plans. Hence, together with the
existing HR practice, Amazon intends to develop new programs and initiatives
corresponding to its strategies.

Most measures related to the efficiency of HR practices include the acquisition of new
skills by employees for higher performance under new circumstances. One of the
examples of such alignments is the latest retraining program of Amazon called Pivot
(Howland, 2017). It is intended to improve the performance of employees with the
lowest indicators to turn them into efficient workers instead of firing them. For this,
they are offered guidance from specialists called career ambassadors. However,
despite the initial idea of help, it promotes competitiveness and might result in
voluntary resignations rather than improvements due to the increase in stress level.
Such measures also contribute to the creation of the reputation of a harsh employer.

Another area for improvement is conditions for the career growth of the existing
employees and, consequently, a better image of the company among its workers. One
of the recent measures is a program known as Part-Time Team Initiative, according to
which Amazon would make up teams of only part-time workers (Petrillo, 2016). This
type of employment seems to be less stressful and allows the employees to achieve a
better balance between life and work. Consequently, it would result in the presence of
different types of workers for a clear division of performed activities as well as
promote the company’s flexibility. Such a program might also boost the productivity
of Amazon’s workers and lead to a better understanding of the efficiency of various
teams.

The measures intended to increase the flexibility of Amazon workers and the
company as a whole seem to be a better option than instilling new rules and
mechanisms of increasing the productivity for underperformed employees. As the
strategic goal of the company is to achieve long-term success, variation in the number
of people in a team and the changes in their working conditions would be of better
help. The soft approach would increase the satisfaction of work and reduce the stress
of employees in the long run.

Compensation, Performance Management, and Career Development

Another distinctive feature of any company is its mechanism of compensation. The

system exploited by Amazon was developed in the 2000s, and it is still used in the
company (Ferracone, 2019). Its primary characteristics are simplicity and flexibility,
which allowed the company to experiment on various options. The system applies to
all categories of workers and provides for fixed payments without cash bonuses or
RSUs to the best performing employees (Ferracone, 2019). Thus, the compensation
system at Amazon is based on the strategy of attracting those people who would
significantly contribute to the company’s future success as owners.

Despite the evident efficiency of such a system, it also contains risks. To make it
work, HR managers should maintain a high level of performance among employees.
The failure to successfully implement the HR practices might result in the inability to
support the compensation systems. Thus, the employees with low performance
indicators would receive more compensation than it is required while neglecting the
ones who lead the company to success.

The performance management of Amazon is defined by its leadership principles. The

focus on individual qualities and skills of employees promotes the ability of a person
to cope with emerging situations on his own rather than collaborate with others. Such
a system leads to the necessity to evaluate the performance of all the company’s
employees regularly. For this objective, Amazon is using a program called “Anytime
Feedback Tool,” which allows the workers to leave their feedback on the performance
of others anonymously (Courtney, 2018). It is complemented by the program called
“Connections,” according to which every person in the company should reply a
random question a day about work (Kim, 2018). If an employee’s performance
indicators do not correspond to the established values, he or she is subject to the three-
month “Performance Improvement Plan” (Courtney, 2018). This system of
performance management produces excellent results but contains several drawbacks.

The advantages of Amazon’s performance management lie in the development of the

ability to respond to constructive criticism as well as defending one’s opinion on what
is best for the company. Nevertheless, the amount of problems connected to this
system prevails, and HR managers of the company should pay special attention to
their elimination. The lack of guarantees of anonymity does not increase the trust in
the company’s management. It also prevents people from sharing their real thoughts
on how to improve the process through the improvement of individual performance.
This situation also results in the inability of people to build teams for performing
specific tasks. Therefore, the management of Amazon should develop a more explicit
system of employees’ cooperation and feedback.

As for career development in the company, Amazon designs various programs

facilitating the process for its workers. One of such programs is called Career Choice,
and it aims at assisting in receiving certificates and degrees through financial aid
(McNeal, 2016). The only condition for assistance is the following obligatory
employment at Amazon for a year. Amazon is also offering additional training
programs for future employees at their fulfillment centers (McNeal, 2016). Its current
goal includes the retraining of 100,000 workers by 2025 (Gurchiek, 2019). The
investment in the education of the personnel is the right decision for any company.
However, to make it work, a more clear focus of the company should be developed.

To comply with the needs of businesses, Amazon should do additional research on the
changes in demand for jobs. As can be seen from its initiative’s description, the
company focuses not only on the occupations defined by the Bureau of Labor
Statistics as the ones in high demand but also on all the educational programs
developing the skills they favor (McNeal, 2016). Thus, to avoid making the wrong
choice of employees due to the changing market conditions and the company’s
strategic goals, the management of Amazon should implement a practice of regular
research on demand.

Possible Improvements in Health and Safety Practices

One of the essential concerns of any company is the safety of its employees at work.
The correspondence of its practices to the defined safety standards improves the
overall image and makes it more attractive for potential employees. Hence, Amazon
provides training on health and safety in fulfillment centers for all workers. It also
uses such a tool as the Safety Leadership Index that allows the company’s managers
to assess the efficiency of its measures towards ensuring safety and track the injuries
at work (Amazon’s commitment to workplace safety, 2018). Together with the
evaluation practices, the company also creates new safety measures for its workers.

Such indicators as the ability of management to create a safe work environment, the
success of the conducted training for the company’s personnel, or the feedback of
people on the implemented measures are vital for the safety provision. However, the
work of Amazon’s managers does not stop with a mere evaluation but expands in
scope. Their helpful suggestions for increasing the safety at work include the ideas to
reduce the contact of people with equipment and elaborate safe movements with
regards to body mechanics (Amazon’s commitment to workplace safety, 2018).
Nevertheless, the engagement of Amazon in the process of creating and maintaining
safety standards does not always lead to its successful implementation.

According to the information from other sources, Amazon is reportedly exposing

workers to situations that can be dangerous in terms of injuries. One of the cases of
breach of safety regulations is the discharge of repellent spray at the company’s
warehouse, which led to the injuries of several workers in New Jersey (Valentic,
2018). This occurrence reflects the lack of measures ensuring the safety of the
workers or the company’s failure to educate them on possible injuries resulting from
contact with some substances.

The other cases also speak against the correspondence of the working conditions at
the Amazon facilities to the required safety measures. They include killed workers
and numerous emergency room admissions creating an unfavorable reputation for the
company (Valentic, 2018). According to the results of investigations from the third
parties, Amazon was included in the report of the National Council for Occupational
Safety and Health (National COSH) as a company that does not provide proper safety
conditions for its workers (Valentic, 2018). Eventually, the management of Amazon
was put in such a situation that only the changes in its safety practices would allow to
improve the company’s image.

The actions of Amazon should be oriented to hiring more personnel responsible for
ensuring the safety of workers. From the examples mentioned above, it is clear that
their amount is insufficient for improving the safety indicators and training the
workers. Moreover, to prevent the risks of injuries, the management of Amazon
should consider the employment of specialists who would keep track of the possible
violations of safety rules. It is vital to distinguish the failure of an employer to
provide the necessary working conditions from deliberate neglect of such regulations
by the workers. This task would be the responsibility of such specialists in the event
of
disputed causes of injuries as well as regular inspections of the company’s
warehouses. Finally, the managers should conduct regular tests among the workers on
their knowledge of the company’s safety rules. As an option, a feedback instrument,
such as the ones for the office employees, should be created. Instead of criticizing
other people’s performance, they would allow to inform the company’s managers on
deliberate non-compliance with the safety rules of workers.

In addition, as these cases became a public matter, there is a need for a mechanism to
improve the image of Amazon. It is essential for further recruitment of specialists and
retention of the workers. The company can resort to organizing public tours for
potential employees to assure them in the compliance of its processes with the safety
regulations. Another possible measure is publishing annual reports on the number of
cases of injuries at work with the specification of their causes. It would also allow
Amazon to reduce the number of casualties prescribed to it by referring to the actual
cause of such an outcome. In this event, the company would be able to prove whether
it is a result of its neglect or deliberate actions of an injured worker who ignore the
safety rules. The combination of the described measures is the instrument Amazon
can use to improve its image.

Ethical Approaches for HR Management

One of the vital components of business success is the company’s ethics, and the
management of Amazon makes efforts to comply with it. Hence, they elaborated the
Code of Business Conduct and Ethics, which is available on the company’s website
and contains principal laws and regulations for employees (Code of business conduct
and ethics, 2018). The principal rules include avoiding the use of their position for the
benefit of relatives, bribery, and prohibition to trade securities for the persons who
have access to the company’s material information.

The employees should also avoid any kind of discrimination or harassment, as well as
discussing prices to make agreements with third parties (Code of business conduct
and ethics, 2018). Amazon, in its turn, provides “a clean, safe and healthy work
environment” for its workers (Code of business conduct and ethics, 2018). In any
situation, when an employee is not sure how to conduct himself, he is advised to ask
the managers. However, not only employees but also the Board of Directors should
comply with the provisions on the company’s ethics.
Although Amazon’s Code of Conduct provides for any kind of violation of the ethical
standards of the company, numerous breaches have been reported by media. The
reason for them is the apparent attractiveness of the company due to the low prices.
Thus, the benefits of using Amazon’s services make people forget about the necessity
for the company to comply with ethical standards it promotes.

The high profitability of Amazon is partly explained by the fact that the company
tends to avoid paying taxes. At the time of its foundation, physical stores were the
only taxpayers, and the law did not apply to online shops (The ethical issues with
Amazon, 2019). The situation has changed over time, but Amazon still “forgets”
about such obligations. The policy of the company intended to create job
opportunities in its new locations instead of paying taxies neither substitutes them nor
promotes the development of society.

Another violation relates to the most important regulation of their Code of Conduct –
the creation of a proper work environment. Relatively low wages, extremely high
targets for the workers at warehouses, and the lack of health insurance worsen the
situation and, as a result, the image of Amazon for society and potential employees.
The company is also known for the exploitation of temporary workers, who have no
chances to receive any guarantees from it (The ethical issues with Amazon, 2019).
However, the situation of such workers is not the worst possible position at Amazon.

The disregard for the rights of employees is more evident in other countries like
China, where the branches of Amazon provide their services. According to their rules,
only 10% of all workers there can be Chinese, but no one regulates this situation (The
ethical issues with Amazon, 2019). As a result, a lot of people work without social
insurance, paid leaves, and other guarantees from the company. Their poor conditions
and lower wages reflect the indifference of Amazon towards its workers.

However, not only workers at warehouses around the world suffer from the lack of
proper work conditions. Office employees struggle to comply with all the company’s
standards that make them work at home, reply to emails any time, day or night, and
answer the calls from managers on vacation (The ethical issues with Amazon, 2019).
In combination with the practice of criticizing one another anonymously, such
conditions can hardly be viewed as a positive work environment. Constant evaluation
of the employees’ performance consequently results in working under stress
conditions.

As can be seen from the problems describes above, the management of Amazon
should work on the improvement of conditions for workers and office employees at
all levels. It would be extremely beneficial for the company as its reputation is mostly
created by the people who used to work for it, but had to leave due to the situation at
work. For this, Amazon should change its policy of criticizing co-workers as there is
no way to check if the information is accurate or this instrument is used for getting rid
of the people who are not liked by some employees but have higher performance.
Such a tool can be useful only in combination with a regulating mechanism ensuring
the objectivity of the feedback. Moreover, it is necessary to comply with the
provisions of the company’s Code of Conduct in terms of taxes and guarantees for the
workers.
Conclusion

The HR policies of Amazon are reflected in its systems intended to improve

cooperation between managers and employees. However, the basis for such an
objective seems to be controversial as the idea of criticizing one another cannot lead
to a better mutual understanding. Commitment to leadership values, together with the
mechanism for exchanging feedback, promote the increase in the company’s profit
but does not motivate people to work for it. Moreover, Amazon does not seem to
comply with its Code of Conduct in terms of providing the stated work conditions.
Thus, the company should consider shifting the focus from its profit to its employees.