Takeaways From Amazon’s (Generous?) Pay Increases

October 9, 2018 |

Image result for bernie sanders jeff bezos

Image Credit:  Vanity Fair

A third post about the Kavanaugh hearing?  The. Temptation. Was. Real.  But, as interested as I am to keep talking about it, I thought it might be best to take a break.  So, we move from one American icon (The Supreme Court) to another (Amazon).

Last week, Amazon announced that it would raise the minimum wage for all of its U.S. workers to $15.00.  That’s more than double the federal minimum wage and more than 25% higher than the highest state-mandated minimum wage.  According to various sources, Amazon was paying all workers at least $11.00/hour.  But, Amazon has long been criticized for its wages and working conditions.  In its press release, CEO Jeff Bezos indicated that Amazon’s actions were influenced by the criticisms:  “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.  We’re excited about this change and encourage our competitors and other large employers to join us.”  And, the company indicated that it would advocate for “Congressional support for an increase in the federal minimum wage.”

Many previously vocal opponents, including Bernie Sanders, applauded the news.  But, according to some employees, the increase in base pay isn’t all (any?) good news.  Why?  Because, allegedly, other pay-related benefits have been taken away.  I don’t have enough information to know whether this pay change is or is not a good thing for most employees.  But, what I do know is that headlines that were garnering Amazon a lot of goodwill are fading, maybe along with initial employee enthusiasm.

Surely, a LOT of smart people work at and with Amazon.  And, I’m sure that a lot of people were involved in the decision to make these compensation changes.  Were any would-be-impacted employees involved in the decision?  It doesn’t seem they were.  And, (assuming that’s true) that’s not a big surprise.  Most employers aren’t comfortable talking about compensation practices with employees.  We all know that transparency in the workplace is usually a very good thing for employee relations.  So, why aren’t more employers sharing their compensation strategies with employees?  Maybe they don’t have a compensation strategy/policy.  Maybe they have a policy that’s spotty at best.  Maybe they haven’t audited pay practices and aren’t confident in what an audit would reveal.  It may sound daunting, but auditing pay practices and developing a compensation strategy can be so empowering for an employer.  It’s an eye-opening, educational, and rewarding project for management to undertake.  Rewarding, you ask?  Honestly, the clients I’ve worked with on these projects are so excited to have the learning and the go-forward plan and parameters.  A compensation policy ensures compliance, streamlines hiring/promotions/job changes, removes confusion, improves consistency, increases trust with employees, and allows for open lines of communications with employees.  See, empowering.

Have thoughts on this topic?  I’d love to hear them.  Need help with your pay practices?  I’d love to help.


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