9 key issues with Amazon's corporate culture

"A lot of people who work there feel this tension: It's the greatest place I hate to work."

That's what former Amazon executive John Rossman, author of The Amazon Way, told The New York Times.

The newspaper, on Aug. 15, published an article about Seattle, Wash.-based Amazon as a workplace with narratives from more than 100 current and former employees, including members of the leadership team, human resources executives, marketers, retail specialists and engineers, many of whom describe the culture as one with the exceedingly high demands, unmanageable pressure and employee distress. Interviewees described a constant battle to reconcile the punishing, even oppressive aspects of their workplace with the thrilling power of matching ambition with creation.

Mr. Rossman's statement is representative of how many Amazon employees feel about their work for the United States' most valuable retailer, with a valuation of $250 billion. In its attempt to increase productivity, be more nimble and anticipate the needs of consumers, Amazon is harsh and unforgiving on the inside, according to testimony from current and former employees.

Amazon authorized only a few senior managers to talk to NYT reporters for its article, and declined requests for interviews with Jeff Bezos, the company's founder and CEO, and his top leaders.

Here are nine key problems with Amazon's corporate culture that may serve a cautionary function to other leaders.

1. Unreasonably high standards and expectations. According to the report, the company boasts a set of standards that are deliberately "unreasonably high." Though devised with the intention of developing top-tier talent, the unreachable expectations and pressure employees feel to meet them can cause significant distress.

Bo Olson, who held a book marketing role for less than two years, told NYT his lasting image of Amazon is watching people cry at their desks, a sight other interviewees confirmed as a common occurrence. "You walk out of a conference room and you'll see a grown man covering his face," Mr. Olson told NYT. "Nearly every person I worked with, I saw them cry at their desk."

Some, especially those who defend of Amazon's high expectations, said those who cannot handle the demands are simply not the right fit. "This is a company that strives to do really big, innovative, groundbreaking things, and those things aren't easy," Susan Harker, Amazon's top recruiter, told NYT. "When you're shooting for the moon, the nature of the work is really challenging. For some people it doesn't work."

Liz Pearce, who spent two years at Amazon, told NYT, "The pressure to deliver far surpasses any other metric. I would see people practically combust."

2. Overly forthright leadership. Mr. Bezos' management style is largely influenced by his borderline abrasive personality, including an "eagerness to tell others how to behave; an instinct for bluntness bordering on confrontation; and an overarching confidence in the power of metrics," NYT wrote.

From its early years, Mr. Bezos led Amazon to resist the forces he thought fetter businesses and limit potential: "Bureaucracy, profligate spending and lack of rigor," according to the report. As a result, Mr. Bezos codified many of his counterintuitive workplace ideas into a simple instruction manual called The Articles of Faith. These guidelines help enlist and develop a brigade of elite workers. They also helped to instill a need in employees to constantly prove their worth, outperform their colleagues and even sabotage their careers.

3. Breeding unhealthy competition among co-workers. "You can work long, hard or smart, but at Amazon.com you can't choose two out of three," Mr. Bezos wrote in a 1997 letter to shareholders, according to NYT.

Fundamental to Amazon's culture is transparency about who is a high-achiever and who is not. Employees are expected to and often work long into the evening hours — emails that arrive after midnight are frequently followed by text messages asking for a prompt response.

According to the report, employees are encouraged to publicly rip apart their co-worker's ideas in meetings. Additionally, the Anytime Feedback Tool, a widget in the company directory that allows workers to send praise or complaints about their co-workers to their bosses, is often used to sabotage others. Since team members are ranked, and those with the lowest ranking are fired, it is in each individual's best interest to outdo their teammates.

Many employees told NYT the Anytime Feedback Tool is used for scheming. They revealed secret pacts with colleagues that were used to bury one employee at the same time or praise another. In many cases, criticism from the tool, though displayed anonymously, was copied directly into employee performance reviews.

While "winners" might excel in their jobs, "losers" quit or are fired in annual eliminations. This is the description of "purposeful Darwinism," as one former Amazon human resources director told NYT.

4. Insensitive management. Employees who endured great personal hardship — including cancer, miscarriages and other personal crises — said they were unfairly judged or pushed out without sufficient time to recover and perform at their highest ability.

The mother of a stillborn child told NYT, "I had just experienced the most devastating event in my life." She was soon after informed her performance would be monitored "to make sure my focus stayed on my job." She soon left the company.

Craig Berman, an Amazon spokesman, told NYT this type of response to employees' crises was "not our policy or practice," and "if we were to become aware of anything like that, we would take swift action to correct it."

5. Favoring criticism over harmony. One of Mr. Bezos' most distinctive management beliefs is that harmony in the workplace is often overvalued and suppresses honest criticism, according to the report. Amazonians are told to instead "disagree and commit" (rule No. 13 of The Articles of Faith), which can mean delivering painfully blunt feedback to colleagues before agreeing on a decision.

"We always want to arrive at the right answer," Tony Galbato, vice president for human resources, said in an email statement, according to the report. "It would certainly be much easier and socially cohesive to just compromise and not debate, but that may lead to the wrong decision."

6. Lack of benefits. Unlike its tech peers such as Google and Facebook, which motivate employees to prioritize personal wellness with gyms, meals and other special benefits "designed to take care of the whole you," as Google describes it, Amazon does not give any hint that catering to employees is a priority.

Although successful midlevel managers receive competitive salaries, other workers are expected to demonstrate frugality (rule No. 9). This includes their bare-bones desks, cellphones and travel expenses, which they frequently must cover themselves. Instead, employees are told to refine their "customer obsession" (rule No. 1), always striving to satisfy customer demands.

Amazon requires new workers to repay part of their signing bonus if they quit before a year's time, and a portion of their relocation fees if they leave within two years, according to the report.

7. Disregarding employees' need for work-life balance. Some former Amazonians said nurturing bosses or relatively slow divisions shielded them from unmanageable pressures, but many others said the culture encouraged them to erase work-life boundaries. For instance, employees often spend hours working from home at nights and on the weekend. They could be required to attend conference calls on Easter Sunday and Thanksgiving, and face criticism from superiors for poor Internet connection while on vacation.

"One time I didn't sleep for four days straight," Dina Vaccari, told NYT. Ms. Vaccari began working at Amazon in 2008 to sell Amazon gift cards to other companies. According to the report, she once used her own money, without asking for approval, to hire a freelancer in India to enter data so she could work faster. "These businesses were my babies, and I did whatever I could to make them successful."

Another employee said her fiancé was so concerned about her working nonstop that he would drive to the Amazon campus at 10 p.m. and call her cellphone until she agreed to go home for the night. During a vacation to Florida, she used the free Internet at Starbucks every day to work, according to the report.

8. Lack of praise. Employees said in interviews with NYT they felt their work at Amazon was never done or good enough. Noelle Barnes, who worked in a marketing role at Amazon for nine years, said a repeated saying around campus was, "Amazon is where overachievers go to feel bad about themselves."

David Loftesness, a senior developer, told NYT he admired everyone's drive but couldn't tolerate the hostile language used in meetings. He eventually quit and is now a director of engineering at Twitter.

9. Unfair systems of ranking. Amazon holds annual Organization Level Reviews, where managers discuss and determine subordinates' rankings. Reviews begin with the discussion of lower-level employees in front of higher-level managers. Team leaders described preparing for the reviews as preparing for a court case, complete with paper trails to defend wrongful accusations or incriminate members of competing groups, or identifying sacrificial lambs to save more valuable players.

"You learn how to diplomatically throw people under the bus," a marketer who spent six years in the retail division told NYT. "It's a horrible feeling."

Other large companies, such as Microsoft, General Electric and Accenture, have dropped the practice of stack ranking, or "rank and yank," largely because it leads managers to fire valuable talent solely to meet a quota.    

"Amazon is O.K. with moving through a lot of people to identify and retain superstars," Vijay Ravindran, who worked at the retailer for seven years, told NYT. "They keep the stars by offering a combination of incredible opportunities and incredible compensation. It's like panning for gold."

Mr. Bezos responds: Amazon's CEO wrote to staff in defense of his company's culture and human resources policy. CNBC obtained a copy of the memo, which encouraged staff to read The New York Times article, but added:

"The article doesn't describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at jeff@amazon.com. Even if it's rare or isolated, our tolerance for any such lack of empathy needs to be zero.

The article goes further than reporting isolated anecdotes. It claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard. Again, I don't recognize this Amazon and I very much hope you don't, either. More broadly, I don't think any company adopting the approach portrayed could survive, much less thrive, in today's highly competitive tech hiring market. The people we hire here are the best of the best. You are recruited every day by other world-class companies, and you can work anywhere you want."

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