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Zappos Will Give You $3000 to Get Your Priorities Straight

October 13, 2011, 12:00 AM
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What’s the Big Idea?

Having trouble figuring out what you want to be when you grow up? The online shoestore Zappos can help you figure out what you don’t want to be. According to psychologist Dan Ariely, Zappos’ policy of offering potential hires $3000 not to take the job is smart psychology and money well spent. It weeds out candidates who are in it for the paycheck (a very small paycheck at that - “the offer” applies only to low-paying customer service positions) and invigorates the rest with a sense of purpose. It intensifies their commitment to the company.

The question, says Ariely, is why startups like Zappos are the only ones trying out innovative strategies like this one. Compensation and motivation, he says, are the two key pieces of the employee puzzle that companies need to get right. They can make or break a business. Yet big corporations continue to rely on “compensation advisors,” who basically tell them what other companies are paying their employees.




What’s the Significance?

At the same time as jobs are becoming increasingly scarce in formerly robust economies, the notion of “work” is undergoing a radical change worldwide. Although they’ve graduated into in a “buyer’s market,” millennial workers are demanding more from their work lives. Recognizing that, when you add up the hours, work is life to a great extent, they want greater synergy between their on and off-hours selves and careers that mean more to them than just a paycheck (though they want the paycheck, too). Scoff if you will about beggars being choosers, but the dizzying rate at which these workers quit jobs leaves employers bleeding human resources and training dollars, and wondering how to build a lasting workforce.

Rethinking employee compensation and motivation along psychological lines – taking into account that human motivation isn’t just a numbers game – is a good place to start. Taking employees’ diverse needs seriously, and meeting them as compensation for their time, energy, and passion, is a smart way to ensure that your company – and your economy – isn’t run by hyper-competitive ladder-climbers whose focus is solely on the most expedient route to power.

This post is part of the series Inside Employees' Minds, presented by Mercer.

 

 

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