Differential Compensation Packages Causing Friction: Amazon Workers Upset


Whereas current Amazon workers have been given coupons ranging from $10–$25, potential workers will be given a $1,500–$3,000 hiring bonus upon joining the retail giant.

Companies that have not removed jobs during the pandemic have opted for pay cuts, temporary or permanent. They have also been canceling or freezing performance and annual bonuses. Those in the essential services sectors have been giving out hazard pay to workers who may be exposed to the COVID-19 virus due to the nature of their roles. In most cases, employees have been accepting of the steps taken and adapted to those.

As per Bloomberg QuintOpens a new window , Amazon seems to be struggling, however, with a new problem. Amazon Inc. will give hiring bonuses of $3,000 to encourage people to apply for jobs to meet customer demands during this holiday season. This has resulted in discussions in Amazon’s internal chat rooms among employees who have received coupons valued in the range of $10 to $25 for Thanksgiving. Some have also spoken about how the amount they received was not even enough to buy a turkey leg.

This situation reflects Amazon’s differential approach. On the one hand, it will provide high hiring bonuses to attract talent faster, especially in a market where workers are not ready to return to work yet. On the other hand, the holiday reward amounts are too small in comparison. Could this become a reason for more internal disengagement and still not yield the level of hiring that Amazon wants to carry out?

The Deeper Concerns About This Approach

Bloomberg’s report reveals that many people currently without jobs are still hopeful of being called back by their employers. As a result, they may not be excited by the prospect of a short-term role. That could exacerbate the problem for Amazon, where even a substantial bonus may not attract talent.

The other concern is that earlier this year, Amazon had offered temporary pay raises of $2 per hour and unlimited unpaid time off to its workers to meet the increased demands for online order deliveries. Employees feel that this should be brought back since it was stopped in June.

This announcement of hiring bonuses is a classic case of a short-term solution to a long-term problem. What will Amazon do if it can’t hire enough despite this and has also antagonized its existing workforce? Alternatively, what will happen if it does manage to hire and then have too many workers once the situation eases out?

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Companies Have Rolled Back Hazard Pay Provisions

Most companies, especially retailers had started paying an additional $2 per hour specifically during the months of March, April, and May. Some leadership roles were given special bonuses. However, since June, most have rolled back this pay even though the health risks have not reduced. Companies seem to believe that rising unemployment levels have given them a big pool of talent to pick from. However, for workers, this situation needs immediate redressal.

A few days ago, Washington PostOpens a new window reported that the United Food and Commercial Workers Union (UFCW), which represents 900,000 grocery employees from large brands such as Kroger, Safeway, and Giant, has been asking for more protection measures for frontline workers. Also, workers’ rights group United for Respect has been asking employers such as Walmart, Amazon, and Petco to pay an extra $5 an hour for the duration of the pandemic.

While many companies offered a premium on pay in the initial months of the pandemic, the results of the April 2020 survey of WorldatWork seem to have come true now. The WorldatWork’s “COVID-19 Quick Polls”Opens a new window survey of 267 organizations had shared that 65% of organizations did not plan to offer extra pay at the time but preferred to provide perks such as meals and daycare options. Also, only 26% of the surveyed employers said they were planning to provide hazard pay. Of those, only a tiny percentage (9%) would be offering a cash incentive in the form of a flat dollar amount.

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The withdrawal of the hazard pay would have happened at some point in time, given that companies might have possibly seen it as a short-term solution to tide over the pandemic. However, having disproportionately high hiring bonuses when pulling back on hazard pay may lead to a talent exodus and reflect a company’s lack of concern for its existing employees.