When quitting is an option

How paying people to quit helps keep hard workers and filter out low performers

When quitting is an option
One of Zappos’ most notorious HR policies is what is internally known as ‘The Offer’: after four weeks of training and one week on the job, new hires are given the option to leave. If they choose to walk away, they’ll be paid for their five weeks at the company, plus a $4,000 bonus. Only about 3% of people take the cash and run. The strategy has worked so well for the company that they have kept raising the bonus since the policy was established more than six years ago; when it began, they offered just $100.

Now, there’s psychological evidence to support the billion-dollar company’s technique. Research published in the Psychological Science journal shows that when people are given the option to complete a task, instead of being forced to do so, they tend to work harder and perform better. When an individual chooses to take on a task, the choice reminds them how much they want and identify with the challenge, causing them to work harder. When people are able to reject the option to quit, the researchers wrote, that in itself “strengthens individuals’ commitment to, and increases their persistence on, their chosen path.”

Zappos CEO Tony Hsieh isn’t alone in encouraging staff to leave if they don’t fit with the company. eClinicalWorks CEO Girish Navani recently told the New York Times his unique alternative to dealing with under-performers.

“If you want to ask somebody to leave,” said Navani, “The best way I’ve learned to do that is to sit across from them and say: ‘It’s not working out. Take three months, and go look for something else that you want to do. And if you can’t find it after three months, then you’ll need to change the way you work here.’”

“Sometimes they find something, and sometimes they say at the end of three months, “I think I’d rather do it the other way.” Both are good options because they give you the result you seek,” he said.

eClinicalWorks did not respond to requests for comment.

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