Strategic Human Resources Management (SHRM) At Amazon

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Introduction

In the past two years, the US investment community has had a very interesting topic, “What will be the next industry subverted by Amazon?” An investment bank has also published a series of reports, showing how terrible Amazon is. Amazon started as a bookstore and defeated Barnes & Noble, the largest bookstore in the United (StatesSnap Agency, 2018). Later, from the sub-sector of the bookstore, it entered the entire retail industry, and now the market value exceeds the sum of the top eight retail chains in the United States. Later, the retail company started the cloud service business and is now the world’s largest cloud service provider. Since 2017, it has entered the fresh food market through the acquisition of the Whole Foods Supermarket (Forbes.com, 2018). On the day of the acquisition, the stock prices of chain retailers such as Wal-Mart, Target, Good Market and Sprouts fell sharply. Amazon’s commercial map has no boundaries (eBay, 2018). The successful business must come from the successful HR management. This article will analyze the SHRM, recruitment and selection, performance and reward management of Amazon, discussing its advantages, as well as its disadvantages, and giving suggestions finally.

Strategic management

In recent years, many e-commerce companies have fallen, and Amazon has stood out to create exciting e-commerce performance. Its amazing growth rate is attributed to the unique management of Amazon’s president, Jeff Bezos. The biggest reason for Bezos’ success was that he found the most essential and immediate needs of people: they wanted more choices, but they also demanded more convenient, fast and cheap ways to shop. Bezos pointed out that Amazon’s online business model is to provide a link between customers and providers, and to revolutionize the sales of products. Amazon is only an information broker, and the company has bridged the gap between products and customers, thus forming two kinds of customers: one is a reader looking for books, and the other is a publisher looking for readers (Gaylord, 2011). That is, the reader finds a book or a book to find a reader (Decandia et al., 2007). Bezos’s business philosophy is: Amazon is not a company that sells groceries. It should be a “customer’s company”. It is an “intermediary” that provides a supply and demand between customers and goods, and therefore requires professional knowledge (Boyle, 2018).

As mentioned above, Amazon’s success and mission, it can be seen that Amazon’s general strategic goal is to provide customers with fast and good service. As long as the customer wants to buy something, it will be available on Amazon’s website. And Amazon’s services must meet all of the customer’s needs. From the perspective of strategic human resources concept, the marketing and positioning causes the strategy, and the strategy of the enterprise causes the required behavior of the employee and the HR practice. Therefore, in Amazon, the known factor is that the workers are in harsh environment and conditions to worker longer times to meet customers’ needs. According to the interview of the CEO of Amazon, Jeff Bezos (M.youtube.com, 2018), Jeff was asked how he thinks about the public critique of the Amazon setting strict rules for the employees that fully against work and life balance. Jeff said it is totally the reflection of the strategy of Amazon. Since Amazon is can be considered as a high-tech company because the process is based on the Internet, so according to what Jeff said, the people involved in this process should be prepared for the harsh environment and changes. In terms of work and family balance, Jeff strongly stated that “There is no work and family balance, but the work and balance harmony (M.youtube.com, 2018)”, which means the integration of the work and family. It can be referred to the video that Jeff considers that the high standard working is necessary, and it is workers’ ability to manage the stress and turn the “Unbalance” of the work life into the “Harmony” between work and life.

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Overall, it is easy to identify the aggressive strategy of Amazon from the required workers; behavior. On the one hand, it is positive for Amazon to coordinate workers with the strategic goal. On the other hand, the critiques of the Amazon behavior start to question whether this company should make more chances in terms of the employees so the strategic goal can be better met.

Recruitment and selection

The way Amazon recruits and selects is very diverse and very strict, only real talent can be retained. The unconventional use of talent in Amazon is well-known. Jeff knows that absorbing talent is the key to the company’s vitality. Amazon needs people who can contribute to ideas and ideas, and does not care about its employees’ past career. Therefore, Amazon’s employees may include professional athletes and racing enthusiasts, as well as liberal artists, rock musicians, and scholars from Oxford University who study poetry (Gefen, 2000). In order to control costs, the company does not adopt traditional interviews or examination methods when recruiting talents, but reuses the convenience and effectiveness of the network.

Additionally, “The experiment of Socrates” model Jeff has a unique model for discovering talents. A reporter called this model “the experiment of Socrates”, that is, the applicants not only pass his interview, but also to be interviewed by other Amazon.com employees (Goldmanis et al., 2009). As long as there is a little dissatisfaction, it will not be hired. There has been an applicant who has been hired through a layer of interviews. Furthermore, when a person is hired by Amazon, the criteria of this person is stricter, which means the requirement increases all the time, and this is the way Jeff keeps all the candidates to keep having a serious mind.

According to Gayle (2016), who has worked in Amazon before, gives people suggestions that there are three aspects which people can keep in mind to use the to increase the possibility to be accepted by Amazon. The first suggestion is paying much attention to the process. There may take several interviews to fully being accepted, the process may include the several phone interview, online interview and face to face interview. Gayle suggests that people be completely prepared for the interview because of the interviewers came out from the strict training. Interviewers of Amazon keep the clear job description and guidelines in their minds and they will use diverse ways to test candidates. The second suggestion from Gayle is that people should show their leadership. There are 14 leadership principles the candidates should keep in mind. Finally, the suggestion is that preparing for stating the personal past cases because do care about the history of the people because they believe that what people do in the past is what they will do in the future.

In terms of the recruitment and selection process, the approaches of the Amazon are very scientific. In terms of the recruitment process, the required job description and personal traits are made before any interviews. These strict guidelines push interviewers to follow the needs instead of having perception errors. There are several time of interviews done by different people which avoid the self-centered bias, early information bias and stereotypes. Overall, this process make judgements to be more evidence made. Besides, even though this company care about people’s past cases, and their past performance, they do not strictly ask people to have certain past profession past, which allows the diversity.

Performance and reward management

Amazon’s performance management and compensation management are very strict. From a performance management perspective, Amazon has strict standards for every employee in the position. From the daily work to the work content, from the general work outline to the work practices, Amazon has detailed requirements for every employee. Moreover, performance management and compensation management are closely linked (The Stranger, 2018). An Anonymous Website Is Asking for Amazon Employees’ Horror Stories. [online] Available at: https://www.thestranger.com/news/feature/2016/02/03/23517717/an-anonymous-website-is-asking-for-amazon-employees-horror-stories [Accessed 8 Dec. 2018]. Besides, the critical rules, the executives of Amazons, from the lower level to high levels, they will have meetings every year to discuss the employees’ performance (Houde et al.,2017). From the annual meetings, they can conclude how to make improvements on the performance. The company’s organizational structure is flat, the operation center calculates wages according to the hour, new employees, product managers, senior managers, directors, and core leadership teams. Amazon’s promotion is not easy, but many employees pay more than the boss Bezos.

As it is stated on the official page of Amazon, this company offers flexible shifts to give more workers more choices. And if the performance is well enough, the person will be given the chance of becoming the permanent member of them. Also, the company also offers medical insurance combined with other types insurance, the different packages of bonuses, and also “career choices” funding for the adult education offering to pre-pay 95% of tuition and associated fees for nationally recognised courses, up to £8,000 over four years (amazon.jobs, 2018). As can be seen, the performance management of Amazon is highly strict but efficient, because every detailed time period, from the day to year, the whole process is under the evaluation. Also, the reward system if motivated, because the employee’s performance is tightly connected with their wages, bonus. Also, the added insurance and projects are very attractive. All of the initiatives of these can motivate employees and push them to have better performance.

However, the performance system is also under criticizes by the public in the recent time of Amazon. According to James (2018), the low retention strategy makes Amazon hard to retain their people. It is said that managers at Amazon still tend to push employees’ performance even though employees may have some healthy issues or family problems. According to Cadwalladr (2018), workers in Swansea warehouse have to work up to 50 hours in a week and there are four shifts in a day, and some workers have to get up before 5a to prepare for the work.

As can be seen, even though the job situation which Amazon published to the public is positive, but there are ma be much vulnerability in the management process. Strict working conditions do give employees the motivation to work hard, but at the same time, a rigid treaty will force many people to leave. From this perspective, Amazon seems to only care about its own economic interests rather than the well-being of its employees. Although the employee’s welfare protection is mentioned in the reward mechanism, as well as other employee development projects, but these extra projects may not be as important as the daily care of employees in the workplace.

Also, according to the Cadwalladr (2018), Amazon has been sued for selling fake goods and other unethical behavior, but the company has no willingness to repent. Therefore, on the whole, whether Amazon’s high incentives are only for economic benefits, but ignore its own corporate social responsibility.

Conclusion

In conclusion, this article mainly analyzes the strategic human resources management, recruitment and selection, performance and reward management of Amazon. From the application of Amazon, it can be seen that this enterprise is very concerned about the realization of its own strategic planning, and also has a very effective human resource management plan for employees, but there are still some problems in the process. This problem is mainly exposed to whether the management of employees should be humanized. High work pressures and extended working hours really ensure the company’s overall performance, but this is not good for decreasing the turnover because employees are not being cared. There are several reasons for addressing this problem. The first strategy is to use other technologies to improve work efficiency. As a technology company, Amazon should invest more in the technology of artificial intelligence, so that the work of some machines can be shared by the machine, instead of all the work burden for the employees. The second strategy is to adjust the company culture. The company’s current criticism is that the work pressure is too great and the employees are not cared for. Amazon’s culture is more about paying attention to customers and neglecting employees, so if Amazon can work hard on employee care, it will help Amazon retain its employees.

References

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• Cadwalladr, C. (2018). My week as an Amazon insider. [online] the Guardian. Available at: https://www.theguardian.com/technology/2013/dec/01/week-amazon-insider-feature-treatment-employees-work [Accessed 8 Dec. 2018].
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• Forbes.com. (2018). Amazon Is Successful Because Of These Two Things. [online] Available at: https://www.forbes.com/sites/brittainladd/2018/08/27/these-two-things-are-what-make-amazon-amazon/ [Accessed 8 Dec. 2018].
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• Gayle.G,(2018). [online] Available at: https://www.linkedin.com/pulse/how-maximise-your-chances-getting-job-amazon-gayle-gallagher/ [Accessed 8 Dec. 2018].
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• Goldmanis, M., Hortacsu, A., Syverson, C., & Emre, O. (2009). E-Commerce and the Market Structure of Retail Industries. The Economic Journal, 120(545), 651-682.
• HBS Working Knowledge. (2018). What’s Wrong With Amazon’s Low-Retention HR Strategy?. [online] Available at: https://hbswk.hbs.edu/item/is-something-wrong-with-amazon-s-low-retention-hr-strategy [Accessed 8 Dec. 2018].
• Houde, J., Newberry, P. W., & Seim, K. (2017). Economies of Density in E-Commerce: A Study of Amazon’s Fulfillment Center Network. National Bureau of Economic Research,.
• M.youtube.com. (2018). Amzon SHRM – YouTube. [online] Available at: https://m.youtube.com/results?search_query=Amzon+SHRM [Accessed 8 Dec. 2018].
• Snap Agency. (2018). 7 Reasons Why Amazon Is So Successful. [online] Available at: https://www.snapagency.com/blog/7-reasons-why-amazon-is-so-successful [Accessed 8 Dec. 2018].
• The Stranger. (2018). An Anonymous Website Is Asking for Amazon Employees’ Horror Stories. [online] Available at: https://www.thestranger.com/news/feature/2016/02/03/23517717/an-anonymous-website-is-asking-for-amazon-employees-horror-stories [Accessed 8 Dec. 2018].

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