Amazon received plenty of press and praise last week when it raised the minimum wage for all employees to $15 per hour. The retail giant announced the change as a positive and leveraged it for positive buzz, but not all employees are happy about the new system.
The fatal flaw of a higher minimum wage is that the money for this increase has to come from somewhere — and Amazon is no exception. To pay for those rising wages, Amazon is also slashing bonuses for high performing employees. Those top performers received additional pay based on their productivity and the way they benefitted the company. For some, the loss of these bonuses (awarded for hard work) mean a net loss of up to $300 per month.
Holiday and seasonal employees could be the hardest hit; like all retailers, Amazon has intensive warehouse, shipping and logistic needs at the holiday season. The added employees would often return each year, and both seasonal and regular employees enjoyed hefty bonuses during the months of November and December, to reward commitment and hard work. According to Wired, these bonuses are being eliminated to make way for the $15 minimum wage for all.
In addition to the loss of performance based bonuses, Amazon is also ending a lucrative stock program for employees. The Restricted Stock Unit or RSU program allowed workers to invest after just two years, resulting in gains as the company grew. This program, again designed to reward performance, is being removed to make way for the $15 minimum wage.
According to Amazon, the phase out of RSU’s is due to employee demand; in a recent blog post, the company said: “we’ve heard from our hourly fulfillment and customer service employees that they prefer the predictability and immediacy of cash.”
While Amazon feels that the hourly increase will replace any losses due to the removal of performance rewards and incentive:
“We can confirm that all hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement. In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”
According to WIRED, at least one employee they spoke with will lose about $1400 each year because of the shift in compensation. Amazon did not dispute this when they were approached by WIRED for confirmation.
While Amazon’s increase in minimum wage appeals to those fighting for this very thing, the consequences to long term, high performing hourly employees is actually negative in many cases. The very employees that are relied on to help run the company are the ones being negatively impacted by this “positive” change. As brands continue to face pressure to increase minimum wage, the plight of the long term, high performing Amazon workers should be considered so that any increases are truly beneficial to all.
~ Conservative Zone