Organizational Behaviour At Amazon Corporation

Case Description

Discuss about the Organization Behaviour at Amazon Corporation.

The current study focuses upon evaluating the issues pertaining to organizational behavior that arises in case of Amazon Inc. The presence of the company around vast geographical areas coupled with high degree of market expansion has displayed that the company has had operational success unmatched by other retailing firms. However, despite generating considerable degree of revenues the company has visible issues pertaining to employee management, organizational behavior. The high degree of turnover pertaining to employees along the degradation of the company’s reputation as a recruiter can be construed as a proof towards presence of issues concerning human capital. Employees have showcased frustration coupled with visible degree of resentment towards working at Amazon. Moreover, the problems as regards to employee feedback, employee-superior relationship have been evaluated thoroughly in light of present and past organizational theories.

The advent of online retailed coupled with the demand for large supplies and high degree of logistics has accelerated the growth of Amazon Inc. as an online retailer. The vast global presence coupled with the culturally diverse set of workforce has aggravated the degree of complexity in labour management. The present workplace conditions pertaining to the company’s lower and mid level employees are not conducive to growth. This is because the company has not displayed visible degree of acclimatization to local culture and work values practiced in the markets that it caters (Zillman 2016). Moreover, the working conditions at its warehouses are reported to be inappropriate for its employees. The payments pertaining to the lower level employees of Amazon are also below par as compared to the payment made for the same degree of labour in other organizations. These factors have contributed towards increasing the degree of non-alignment of employee’s objective with that of the company.

The managerial policy undertaken at lower managerial level seeks to undermine labour welfare and which in turn is tend to be solely profit motivated. Moreover, it tends to lack any visible degree of policies, which facilitates sustainability of cohesiveness, in its workforce. There has been instance, whereby the company has penalized its employees for taking on vacations or for taking time out for medical treatments or serious family engagements (Zillman, 2016). The policies regarding the treatment of employees resemble that of start-ups instead of public company as big the size as that of Amazon. The responses received out of current and ex-employees pertaining to the company’s human resources policies and work culture display low morale on the part of such employees. This tend to arise out of management that tend implement policies which ends up accelerating the degree of labour turnover and results in fostering of negativity in the organizational culture.

Case Analysis

In terms of the scale of negative repercussions pertaining to organizational behaviour, the effects of mismanagement prevalent in the organization affects the human resources (HR) of Amazon. Moreover, it tends to affect the labor turnover and degree of employee motivation generated negatively along with adversely affecting the company’s human capital. In terms of adherence towards classical theories of organizational management, it can be construed that the organizational problems arising out of workforce and work culture in general tend to arise out of both human resource department. Since the classical theories emphasized that reporting of problems are done based upon hierarchical structures and thereby are restricted on a departmental basis (Streitfeld 2016). Thereby, it can be construed that as per the relevant classical theories, the problems visible in terms of employee management is restricted only to the HR department.

Moreover, it is relevant to note the fact that online retail sectors inherently has its own set of constraints in terms of price related competitions and very low or minimal profit margin. It is construed thereby that minimizing the overhead costs pertaining to warehousing, logistics amongst other operations forms a priority for Amazon Inc. Moreover, the motto as regards to work ethics and values for set out by Amazon’s management for its employees comprises of intense degree of hard work coupled with consistently satisfactory performance. The high benchmark set out by Amazon for its employees in terms of minimal holidays, high work pressures and tough workplace conditions coupled with uncertainty regarding their future in the company aggravated diminishing employee morale.

The primary protagonists pertaining to the aforementioned issues arising out of workplace behaviour tend to be the operations manager pertaining to the organisation. The policies as regards to the work ethics, the policies regarding workplace environment, employee retention schemes amongst others have been laid down under the oversight of its CEO and top management team. The primary focus of the operations manager was facilitating enhanced contribution from employees through evolving the labour management policy in a manner that facilities labour productivity and labour welfare. However, expansion policy regarding the operation of the division that the operations manager belongs resulted at a cost of stringent workforce rules pertaining to the employees. This is coupled with considerably low wages and longer working hours at its back offices and warehouses. Moreover, it can be observed that the perception regarding the company as an online retail giant with considerable reputation pertaining to the company at stake due to the image that has been created as regards to its employee management policy.

The different theories of organisational behaviour, which could be significant to address the identified issues of Amazon, comprise of ERG theory of motivation. According to Miner (2015), this theory identifies the needs of the human beings into three major categories that constitute of existence, relatedness and growth needs. The existence needs comprise of all the physiological and material desires of the human beings like water, clothing, safety and affection. Another category of ERG theory is the relatedness needs, which entails external and social esteem. This implies significant associations with different persons like friends, families, colleagues and employers. This helps in bringing a sense of confidence and security amongst the human beings (Hogg and Terry 2014).

The growth needs in ERG theory comprises of self-actualisation and internal esteem. This impels an individual to make productive or creative influences on the person and the overall environment. As a result, it helps in completing meaningful tasks for the individuals (Pinder 2014). It has been identified that Amazon inserts unjustified pressure on its workers in the form of overtime, low incentives and decreased holidays. As a result, the organisation has failed to maintain the existence and relatedness needs of the ERG theory. This is because the employees did not receive holidays for their physical illnesses and this has negatively influenced their level of motivation. Finally, the growth is limited in Amazon, as the organisation does not conduct regular appraisal of employee performance and provide promotion to its staffs.

Another theory of organisational behaviour, which could be applied to address the various employee-related issues of Amazon, is two-factor theory of motivation, as proposed by Mintz Herzberg. According to this theory, the job factors are classified into two major factors like motivation factors and hygiene factors (DuBrin 2013). The motivation factors constitute of recognition, which is the appraisal of the managers for realising the accomplishments of the subordinates. In addition, responsibility is another attribute of the motivation factor, in which the staffs take responsibilities for performing their obligations. In addition, growth and promotion is required in order to enhance the career growth and opportunities of advancement for motivating the employees (Cane, O’Connor and Michie 2012). In addition, the work assigned to the employees needs to be challenging and meaningful, so that it could be used to increase the level of motivation for the employees.

The hygiene factors, on the other hand, are those factors, which are needed to motivate the employees in the workplace. Although these factors are not fruitful in the long-run, absence of these factors might result in loss of motivation for the employees in the workplace (Naylor, Pritchard and Ilgen 2013). The hygiene factors could further be subdivided into dissatisfiers and maintenance factors. The salary structure needs to be reasonable and appropriate in comparison to the industrial standards.

The policies of the organization need not be rigid; instead, they need to be fair and clear. In the words of Altman, Valenzi and Hodgetts (2013), the company policies need to include flexible shifts, vacation, breaks and dress code. In addition, the employees need to be provided with adequate fringe benefit policies like healthcare plans for the family members and help programs. The physical working condition is another criterion of the hygiene factor, in which the organization needs to use modernized and updated equipments (Barrick, Mount and Li 2013).

It is the sole responsibility of the management to ensure that strong interpersonal relationships exist between the staffs and managers. The conflict of interest or element of humiliation needs to be eliminated. Finally, job security is another hygiene factor, which aims to increase the satisfaction and motivation levels of the organisation (Borman and Motowidlo 2014).

According to the identified problems, the lack of motivation and satisfaction level of the employees has declined the organisational productivity of Amazon. This is because the organisation has not undertaken adequate steps; rather it has enforced rigid working conditions for the employees. The employees are forced to work for additional hours without any additional payment coupled with absence of employee appraisal. Hence, the absence of motivation factors, as depicted in the two-factor theory of motivation, is clearly inherent in the organisation policy of Amazon. In this context, Baran, Shanock and Miller (2012) cited that the organisations failing to motivate the employees often experience fall in productivity and quality of services delivered to the customers. Furthermore, the communication gap between the managers and subordinates of Amazon signifies the absence of hygiene factor.

In the current case, analysis regarding Amazon’s workplace and behavioural analysis pertaining to current employees of the company has been undertaken. The study focuses both upon the individual level and at the group level and tend to evaluate the organizational behavior issues pertaining to the company in the current issue. The current study is relevant in assessing the workplace dynamics prevalent in major organizations, in our case its Amazon, and then evaluates the repercussion of such dynamics upon employee performance, level of motivation and behavior as a group. The assessment then takes into account the different relevant theories, model pertaining to organizational behavior, and applies the theories congruent with the prevalent situation at Amazon.

In case of Amazon, for the fresh recruitments a separate set of leadership principles are provided that summarizes the core principles that the employees are required to adhere to. The unproductive habits that Amazon assumes its recruits have inculcated through the previous organizations that they have worked on are to be forgotten and such “poor habits’’ are told not to be repeated at Amazon (Kurtz 2016). Moreover, the evaluations pertaining to employee performances are undertaken on a frequent basis and the weaker link in each department are warned of their future prospects at the company lest they continue performing in this manner. Moreover, those that tend to score the highest on the parameters set out by Amazon for gauging employee performances are provided virtual recognition through the title “I’m peculiar” (Kurtz 2016).

The current workplace environment at Amazon induces frequent clashes of ideas between the employees. Moreover, instead of facilitating alignment and fostering respect for each employee by another, the company encourages employees towards aggravating clashes with other employees (Streitfeld, 2016). Moreover, the working hours pertaining to Amazonians, what the company calls its employees, are long and hard. Moreover, even for emails that are sent to the employees during midnight, this to be followed by text messages at the employee’s phone requiring justification as regards to why the email was not replied to. Moreover, proclamation by the management at Amazon that the organization is not the “easiest place to work” in displays the fact that the management itself implements worker policies that tend to challenge employee in attaining high performances on a regular basis. Further, the organization itself proclaims that its standards regarding employee performance in particular and company’s financial performance in general are “unreasonably high”.

There can be several factors, which has facilitated the development of company objectives of such nature. The exponential growth in the number of internet users coupled with rise in online retailing first in the developed economies and then in the emerging economics has created vast opportunities for Amazon. Thus inducing the company to penetrate large number of offshore markets and thereby facilitate high quantum of expansion. However, the approach that Amazon undertakes in order to capitalize upon such opportunities has resulted in negative repercussions upon the performance, work ethics and motivation of its employees. Practices such as encouragement to employee towards sending secret feedbacks to their immediate superior as regards to the happenings in other department of the organization create a negative vive for the employees. Moreover, the phone directory at Amazon implicitly mentions that the higher management approves such exchanges of secret emails in order to “mitigate organizational hazards”. However, it can be observed that such practices end up being demoralizing the employee and tend to have negative repercussions upon the degree of integrity inculcated in them.

In comparison to Amazon, companies such as Google and Facebook tend to have an organizational structure that is more informal in nature and tend to foster creativity, innovation coupled with enabling its employees towards working under high work pressures. For instance, at Google, no formal outfits have been specified to be worn by its employees and it is at the employee’s discretion to choose what to wear to work. This is coupled with free gourmet food at its canteens that facilitates in ensuring that employee have a better set of communications with each other. The belief that sharing a meal together has positive repercussions upon employee productivity, efficiency and it mitigates the risks regarding high employee turnover. Facebook too has a organizational structure that is overtly informal in nature and operates as a startup and fosters openness amongst its employees. Moreover, in house contests amongst its employee coupled with numerous set of financial and non-financial bonuses and incentives. Further, Facebook undertakes measures that facilitate absorption of workplace pressure such as mid day yoga sessions for its employees for free at the office premises.

In contrast to aforementioned examples, Amazon has an inflexible work regime coupled with the fact that some of its policies directly aggravate internal politics in the organization. Presence of sample texts in Amazon’s employee directory provides a representation of how the company encourages secret communications regarding minor issues and which encourages sabotage of an employee by another. The aforementioned policies clearly states the fact that work practices at Amazon is not conducive to excellence or growth in the context of employee performance. Moreover, the company has displayed practices that make it difficult for majority of its prospective employees along with those currently employed at retaining their job in the long term. The “purposeful Darwinism” as described by its human resources is aimed towards weeding out the weak links in the organization but in turn has resulted in creating a bad reputation as a recruiter (Streitfeld 2016). The company undertakes the largest logistical operations in order to facilitate timely deliverance of its products to its government.

Moreover, in terms of handling human capital pertaining to the organization, there has been instances that workers suffering from miscarriages, cancers and other major illnesses are not provided adequate time to recover and rejoin the organization. Moreover, in case of performance evaluation, such illnesses and recuperations are seen as a drawback and thereby the probability of such employee not provided a fair hearing prior to being retrenched is significantly high. Therefore it can be construed that organizational culture pertaining to Amazon tend to foster group think where each department tend to assimilate the collective inputs from their employees in order to facilitate higher performance but in turn result towards undertaking dysfunctional decisions.

Hogg and Terry (2014) stated that in case of managing occupational stresses, it is required to be ensured that the objectives of the employee has an fair degree of alignment with the organizational and occupational requirements.  It can be construed from the practices as observed in case of Amazon that there seems to be substantial degree of non-alignment pertaining to the objective of employees and that of the company. Primary objective of each employee is towards responding to incentives that are both of financial and non-financial nature and to maintain work life balance. In case of the current company, it is observed that few of the employees get to achieve the stringent set of benchmark as has been laid out by Amazon. Even though that facilitates incentives such as financial bonuses and stocks for managerial employees and executives, it is absent in case of lower level staffs. The nature of Amazon’s business resulted in putting high degree of emphasis upon the warehousing and deliverance of goods. However, the observations made pertaining to the warehouse conditions and the inadequate incentive structures related to lower level workers showcases that Amazon has serious organizational management issues.

Shafritz, Ott, and Jang (2015) stated that in case the human resources and incentive structure tend to be constrained by adverse managerial policies, the organizational stress tend to aggravate. It can be construed in case of Amazon; the organizational stress is prevalent in a high quantum. Moreover, it can also be mentioned that there are clear instances of workplace incivility prevalent at Amazon. It can be construed that the policies regarding employee and workforce management that comprises of facilitating means to aggravate office politics, accelerate high degree of employee turnover cannot contribute positively towards Amazon’s performance in the long run.

Naylor, Pritchard and Ilgen (2013) stated in the context of employee performance, job satisfaction is the primary determinant of the rate of employee turnover that the organization faces. Moreover, Altman, Valenzi and Hodgetts (2013) stated that in case of high growth companies, the emphasis shall be upon lowering attrition rates and through incentives and recreational activities. The aforementioned set of observations made upon Amazon results in a perception that the company requires revising its organizational framework and emphasize upon facilitating a workplace environment that is permeated by job satisfaction.

Armstrong and Taylor (2014) advocated that transformational leadership theory tend to inculcate the mannerisms and attitudes showcased by the leaders and which in turn is then affects the organization as a whole. CEO Jeffrey Bezos has set high benchmarks for its employees and the financial performance, pertaining to the company has displayed enormous growth prospects. However, the leadership skills of the CEO have failed in motivating the employees in providing their best efforts as regards to performance for a sustainable period. Greaves, Zibarras and Stride (2013) stated that in the organizational contexts, intrinsic motivation has greater degree of dependency upon employee-superior relationship. In case of Amazon, the pressures of generating high quantum of revenue out of thin profit margin on each transactions has resulted in exerting high degree of pressures upon its employees. Timely deliverance of products to consumers coupled with an incentive structure that is below par as far as comparisons are made to incentive structures.

The prevalent set of work culture at Amazon requires a though evaluation in order to identify the shortcomings in managerial policies pertaining to employee and worker motivation. The policies that aggravates workplace politics requires amendment in order to facilitate an environment where the employee can focus upon the designated jobs rather than indulging in activities that are predominantly unproductive. The feedback policy pertaining to the employees requires overhauling and a grievance redress department is required to be set up by the company. That, in turn, shall facilitate minimizing the adverse issues faced by employees. Moreover, the human resources department requires undertaking measures that aggravates the degree of job satisfaction as is faced by the employee. Moreover, a certain quantum of profit requires to be distributed onto its lower level employees in order to improve the risk mitigation measures.

Moreover, the performance parameters are required to be scaled down in order to facilitate minimization of attrition rate of employees. The company requires to observe other giants such as Facebook, Google, Apple amongst others in terms of reframing its policies regarding employee engagement.  The leadership pertaining to the CEO and higher-level management requires to be permeated into its employee. Moreover, the company requires focusing upon the fostering motivation onto its employees and restricts policy that tend to aggravate resentment and sabotage.

Conclusion:

The above study showcased analysis of factors affecting organizational behavior at Amazon Inc. The study had sought to address those issues in light of organizational behavior theories and find remedies pertaining to the problems prevalent in the organization. The observation of employee management policies prevalent at Amazon has displayed that there are serious negative repercussions upon the employee performance. In order to minimize the attrition and turnover rate pertaining to the organization, the aforementioned recommendations are required to be followed by Amazon.

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