While productivity has always been a top-priority in companies’ agendas, as more employees share their “burn-out” stories, firms can no longer ignore the importance of mental well-being. Our report discusses this issue taking Amazon’s “Great Resignation” as an example. The Bloomberg article describes the case of Sarah Schiener, a Senior Program Manager at Amazon, who, overwhelmed by the workload and inappropriate bonus scheme, is forced to leave the company after giving birth to two children. Employee attrition inside the e-commerce giant is reaching crisis levels, with a record of 50 vice presidents leaving the company (Stone, 2022). The turnover rate is not only affecting factory employees but to a large extent senior white-collars, highlighting the severity of the burn-out (now officially recognized as a disease by the WHO) (World Health Organization, 2019). The overarching leadership conundrum must be addressed promptly and effectively, to alleviate the burden on employees and prevent negative repercussions on the company’s reputation. The purpose of this paper is to analyze the root causes of the burn-out problem from a leadership perspective and propose recommendations to Amazon's Senior Leadership Team, aimed at tackling the escalating burn-out episodes within the company.
Although burn-out is generally considered as an individual problem, solvable by applying personal band-aid solutions such as “learning to say no”', this workplace phenomenon is complex and multi-faceted. According to the Harvard Business Review, it constitutes a management problem, triggered by unmanageable workload, lack of communication/support from management and unreasonable time pressure (Moss, 2019). Indeed, the root causes of the problem “do not really lie with the individual and they can be averted, if only leadership started their prevention strategies much further upstream” (Moss, 2019).
Compensation Scheme
Superficially, it would seem employees are burn-out because of long working-hours combined with an unusual pay structure, composed of a fixed salary plus a variable part, linked to stock performance. With rising stock price, managers were adequately compensated, but now that the price is deteriorating, several of them are leaving for less stressful and more remunerative job opportunities (Stone, 2022). Nevertheless, to understand the whole phenomenon, a deeper examination of the company’s culture and employee management is required.
Organizational Culture
Amazon has a powerful corporate culture centered on maximizing productivity through rigorous feedback mechanisms. The data-centered company applies Taylorism philosophy: employees are constantly monitored based on job-specific, pre-settled metrics, measuring labor efficiency (Mitcham, 2005). Performance evaluations determine their career advancement opportunities. This exerts enormous pressure on employees to perform. Schnierer argues it is a “rewarding place to work but the pressure often feels relentless and at times unnecessary” (Stone, 2022). Employees describe it as an “unremitting pace” and “cutthroat environment” that does not consider personal obligations, especially in crisis conditions like the pandemic (Stone, 2022). Generally, a strong culture leads to job satisfaction, commitment, tenure, and job proficiency (Ashkanasy et al, 2001). However, in some situations (e.g., high industry volatility) this relationship can backfire (Sorenson, 2002). If the culture is too focused on increasing productivity, for instance, it can unintentionally lead to undesirable behavior such as burn-out, negatively impacting performance in the long run.
According to Schein (2017), culture is deep and multi-layered. While working long hours and responding to emails late at night are easily observable artifacts, employees’ values and norms are more hidden. For example, when McGah expressed his time-management concerns, his manager advised him to put his child to sleep at 9am, take a nap and then do as much work as possible until 2am. This is a widely held expectation for how people “should” think and act at Amazon. In fact, he confesses, “Every person I tell that to who's an Amazonian, says, ‘Yeah, that sounds about right.’” (Stone, 2022). This is because Amazon employees value hard work and working long hours has become a norm. There is no flexibility, and this has become completely ingrained – everyone inside the company thinks it is a normal way of behaving. This prevents employees from questioning their underlying assumptions. Notably, Amazon is a global company, thus one must be careful when generalizing, as macro-culture may vary slightly from region to region (Schein, 2017). While in the U.S. being workaholic is a norm, in Scandinavian countries (e.g., Denmark), there are strong labor laws preventing it (Stieg, 2020). Therefore, the degree of burnout may not be homogenous across all offices. Nevertheless, uncovering the base of the “cultural iceberg” and driving a change in corporate culture is necessary to prevent the “Great Resignation” from turning into a “Great Exodus”.
In-group vs Out-group
As a result of this harsh corporate culture, employees may feel they should be available 24-7 to prove their commitment. Those who can meet the expectations of the norm are more favored compared to others. According to the Leader-Member Exchange Theory, leaders do not treat all followers identically, which results in an in-group and out-group problem (Graen, 1995). Employees who belong to the in-group receive more support, opportunities, responsibilities and mentoring from the leader, while members of the out-group often face minimal support and low encouragement, that inevitably can result in lower performance, poor loyalty and even resignation. This in-group versus out-group split might have been exacerbated during the pandemic, when the shift towards remote working resulted in the creation of virtual and/or distributed teams, which experience more task and interpersonal conflicts than collocated teams (Hinds et al, 2005).
Women Resignment
Amazon women might also be more prone to resign compared to men. This is because of an HR policy which freezes all pay increases when employees are on parental or medical leave. This is a problem considering that men still lag far behind women regarding parental leave-taking (e.g., in Poland, Austria, Germany women take parental leave 99% of the time) (Rocha, 2020). In the article, the founder of the “Momazonians” community argues that Amazon has no concern for working moms (Stone, 2022). This contributes to creating feelings of powerlessness and frustration among women: in fact, after five years working for Amazon, Schiener decided to leave the company. According to McKinsey (2010), women’s decision to voluntarily opt-out of the workforce is among the barriers to their career advancement. Coping with this is thus crucial to help women’s progress and slow-down the brain-drain.
Leadership Style
The leadership style of the former CEO, Jeff Bezos, might also have played a role. He is considered an iconic leader, who led from the front and by example. Arguably, he adopted a pace-setting leadership style, which sets demanding tasks to be achieved within strict deadlines (Goleman, 2000). Indubitably, his pace-setting leadership style has allowed him to uphold high standards and achieve challenging goals. However, it has also contributed to fatigue in the long run, because in a company with several high achievers, some managers may erroneously set constant high expectations and ignore the ones falling behind (Goleman, 2000). Drained by the continuous pressure exerted on them, some employees might have no choice but to resign.
Acknowledging the severity of the burn-out, Amazon recently added a Leadership Principle, stating that “Managers should lead by empathy” (Stone, 2022). Nevertheless, it continues to emphasize productivity, encouraging workers to “work vigorously” (Jabsky, 2019). This controversy raises doubts about Amazon’s truthfulness in caring for employees. One can question whether these principles are really implemented or are a mere marketing attempt to save the corporate image.
Drive the Cultural Change
Reducing the pressure entails a shift in corporate culture which is neither immediate nor easy, due to Amazon’s long history and complex environment. However, it’s necessary, because it’s hampering the company’s flexibility to adapt and leading to undesired behaviors. Cultural change cannot be mandated: it is fundamental for management to understand that a shift should happen (defined as “unfreezing”) (Schein, 2017), by increasing the so-called “survival anxiety.” Experiments show that overwork diminishes employee’s productivity in the long run and even leads to more accidents. For an efficiency-oriented company this alone should be an alarm signal. This, together with media pressure, reputational backlash, and possible government actions (e.g., stricter labor laws) should create a burning platform. Moreover, management must create the conditions for the transformation to occur, inviting the workforce itself to change the culture (Gertner, 2003). It is important to bring all employees on board, by showing them it will result in personal gain (e.g., reduced stress), as this will encourage them to support change (Benchmarking Report 2005). Dedicated support groups together with a positive vision will reduce learning anxiety.
The second phase is “learning” (Schein, 2017). Here it’s essential for leaders to “walk the talk” and act as role models. They should be clear about their change goals, provide a compelling rationale and allow enough freedom for employees to reach those goals autonomously. For example, a CEO could prepare an internal statement with guidelines on managers’ behavior, stressing that employee’s well-being should be prioritized over hard performance. Finally, “internalizing” consists of making this new culture stick by emphasizing the good results it generates (Schein, 2017). A viable option for Jessy would be to establish regular internal conferences to present the changes implemented and the positive outcomes they have brought. This would remind employees to adhere to good practices to avoid further burn-out episodes.
Moreover, these changes must be supported and reflected in organizational systems, such as Selection, Socialization and Reward and Promotion (Schein 2017). For example, during Recruitment, interviewers should ask more frequently about candidates’ ideal day and whether they value work-life balance. The way people socialize also makes a difference. Leaders should be encouraged to bond with their followers through organized social gatherings and periodic team building activities (equally appealing to men and women) to create a comfortable environment, where everyone feels safe sharing their concerns. In terms of Rewards, Amazon could adopt more drastic policies like Paid-Time-Off, allowing employees to take “unlimited” breaks. According to Boshier (2019), giving people more flexibility can result in a 20% increase in productivity. Amazon’s feedback assessments should also take into consideration the well-being of individuals. Part of a leader’s bonus, for instance, could be linked to an improvement in the average satisfaction scores of their subordinates (assessed through an anonymous weekly survey sent via email). This could further incentivize leaders to consider employee’s higher-level needs.
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