Hiring & Recruiting

Should You Offer Trainees a Bonus to Quit? Zappos Does

Special from SHRM Las Vegas
Focus on your culture, and the profits will follow, says Zappo’s CEO and author of Delivering Happiness: A Path to Profits, Passion, and Purpose Tony Hsieh. And the culture at Zappos is all about customer service.

The company, known primarily for its Internet shoe business, does very little advertising, Hsieh says; instead, it counts on satisfied, WOWed customers to spread the word. And spread it they have.

Most of the people in his Las Vegas audience of 14,000 at SHRM’s recent Annual Conference and Exhibition had bought or had a family member who had bought shoes or other items from Zappos.

Hsieh revealed that the company hires for culture. Applicants go through two interview processes, one for “the normal things,” like skills and abilities and experience, and one for “cultural fit.” If applicants don’t pass the cultural fit interview, they won’t be hired, no matter how good their skills or how great their ability to contribute technically.

Interviewees are met at the airport and driven to Zappos’ headquarters for interviews. After the interviews, and after the applicant has been taken back to the airport, the shuttle driver gets his or her say on whether the person should be hired. Treat the driver or receptionist poorly and you won’t get the job.

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All new hires go through a 4-week training program that includes 2 weeks of taking customer calls. The obvious benefit is getting everyone attuned to the customer service standards of the company. But there’s a bonus, Hsieh says. During holidays and heavy sales periods, anyone in the organization can (and does) sit down and start answering phones. That means Zappos never needs to hire temps who might not uphold the company’s high customer service standards.

Bonus to Quit

Once people complete the 4-week training period, they are offered a $3,000 bonus to quit. It’s Zappos’ way of saying we only want people who really want to work here. Two or three percent of trainees take the bonus and leave, Hsieh says. Zappos believes that this is money well-spent as these are people who probably wouldn’t have lasted long anyway.

Hsieh says there’s also a positive effect on the trainees who stay. They’re just that much more committed for having rejected the departure bonus.

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Real Blow Your Socks Off Customer Service

Hsieh told the story of an evening when he was entertaining vendors in Santa Monica, California. After closing the bars at 2 am, one of the vendors was very eager to take the crowd back to her hotel room to order the delicious-looking pizza she had seen on the room service menu. She was very eager to taste this pizza, Hsieh said. Imagine her disappointment when she was informed that the hotel didn’t deliver hot food after 11 at night.

One of the (somewhat under the influence) group said, “Well, they say that Zappos has the best customer service anywhere; we’ve got a problem, let’s call them.”

Soon the client was dialing Zappos in Las Vegas. Perhaps a little surprised, but undeterred in her customer service mission, the Zappos representative put the woman on hold. The rep soon returned to the call, offering the vendor the names of three pizza restaurants that were still open and delivering in Santa Monica.

“I hesitate to tell this story,” Hsieh says, “because I don’t want all of you (14,000 were in the audience) people calling Zappos at all hours to find pizza.”

In tomorrow’s Advisor, Hsieh’s “Top 10 Ways to Instill Customer Service” plus an introduction to a unique 10-minutes-at-a-time training system.

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