Should You Pay Bad Employees to Quit?

$2,000! That’s how much Zappos will pay you, not as a signing bonus, but to quit your job! 

That’s right—$2,000 NOT to stay with them.

Would you do it?

Based on asking groups this question, people usually fall into one of three camps:

The first group says, “Heck yeah, I’ll leave here faster than the rats on the Titanic.”

The second group is suspicious. They wonder why they are paying you to leave—maybe it’s a trick, maybe you’ll get a raise if you say no, or maybe Ashton Kutcher is about to jump out and say, “You got Punk’d!”

The third group says, “No way would I leave here for $2,000; you’d have to pay me a lot more because I love it here.”

Which group someone falls into says a lot about how great an employee that person is for the company and team. And by great, I mean engaged, productive, and supportive.

So which one are you?
Which one are your people?

If you or they fall into groups 1 or 2, it’s time to throw up a big red flag! Keeping bad people on your team is dangerous. According to the U.S. Department of Labor, the average cost of a bad hire can equal 30% of the employee’s first-year earnings. A Harvard Business Review study found that 80% of employee turnover is due to bad hiring decisions. So, the $2,000 that Zappos pays to quit their job is peanuts compared to how much they pay to keep someone who doesn’t want to be there.

In our leadership program, Dance Floor Theory, we call these people Negative Nellies. They are the ones on your dance floor actively trying to pull everyone else off and ruin the party.

Listen to what the late CEO of Zappos said about their pay-to-quit program: “Our ‘Pay to Quit’ program has saved us millions of dollars by ensuring that we only keep those who are truly committed to our values. It’s helped us build a passionate team that delivers exceptional service to our customers.”

Think about it—having employees who are genuinely invested in your company’s mission and values leads to better teamwork, higher job satisfaction, and, ultimately, better service. And Zappos is proof of that.

Zappos isn’t alone in recognizing the importance of cultural fit. Other successful companies have similar practices. For example, Amazon has a program called ‘The Offer,’ where they offer employees up to $5,000 to leave if they’re not committed. This reinforces the idea that having a team of truly dedicated individuals is crucial for long-term success.

Riot Games, the company behind the popular game League of Legends, has a program called “Queue Dodge.” New hires are offered 10% of their annual salary (up to $25,000) to leave the company within their first 60 days. The idea is to ensure that new employees fit the company’s unique culture and are fully committed to their roles.

Now, I know what you’re thinking, “Should I do this within my company, team, or organization? We don’t have $25,000 sitting around to pay someone to LEAVE!”

Great question.

Yes, you should create something like this for your group, no matter the size. Following is a simple process you can create and start using with your next hire.

Creating A “Pay To Quit” Program

Define the Incentive:

Decide on an amount that makes sense for your budget. It doesn’t have to be $25,000 or even $2,000. It could be $500 or any amount significant enough to test commitment. Or maybe it’s not monetary, and you use a creative option like job placement assistance.

  • Job Placement Assistance: Partner with other companies and offer to help connect them with potential employers who are a better fit for their skills and values.
  • Career Counseling: Provide access to professional career counseling or coaching services to assist them in finding their next opportunity.
  • Networking Opportunities: Offer to introduce them to industry contacts and networking events to help them build connections for their job search.
  • Resume and Interview Workshops: Provide workshops on resume writing and interview skills to better prepare them for the job market.
Set the Terms:

Establish a clear timeframe during which the offer is valid. This could be after your organization’s first week, month, or another appropriate period.

Communicate Clearly:

Make sure new hires understand the offer and its purpose. Explain that the goal is to ensure everyone on the team is committed and happy.

Monitor Feedback

Collect feedback from those who accept or decline the offer. Understanding their reasons can provide valuable insights into your hiring process and company culture.

Evaluate and Adjust:

Periodically review the program’s effectiveness. Based on feedback and results, adjust the incentive amount or terms as needed.

Implementing a ‘Pay to Quit’ program can help ensure that your team is made up of individuals who are truly committed to your company’s mission and values. It might seem counterintuitive initially, but as we’ve seen with Zappos, Amazon, and Riot Games, it can save you a lot of trouble and expense in the long run.

So, take a page from these successful companies and consider how you can adapt this idea to fit your company, team, or organization. It doesn’t have to break the bank, but it can make a huge difference in building an engaged, productive, and supportive team.

By offering an incentive to leave, you ensure that those who stay are genuinely committed, passionate, and aligned with your company’s goals. This not only improves the overall morale and culture of your workplace but also enhances productivity and reduces turnover costs in the long run.

In conclusion, paying bad employees to quit might seem like an unusual strategy, but it’s a powerful tool to cultivate a dedicated and harmonious work environment. Whether it’s a financial incentive or creative alternatives, the key is to ensure that your team is composed of individuals who truly want to be there and contribute to your company’s success. Implementing this approach could be the game-changer your organization needs to thrive.

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