“If you quit today, we will pay you the amount of time you’ve worked, plus we will offer you a $3000 bonus.”
That’s the offer all new Zappos employees get after their 2 month training period is over. Doesn’t that sound ridiculous? Bribing your employees to quit?
But it’s the one strategy that has made Zappos employees extremely loyal to the company. It is what has allowed Tony Hsieh to sell Zappos to Amazon for a cool $1.2 billion!
Because the tactic did something magical. 3% people who received the offer took the $3000 and quit. But the other 97% stayed on. And became intensely loyal. Zappos employees stuck with them far longer, which meant lower recruiting costs.
Why did bribing make people loyal?
Turning down money requires true commitment. And knowing that everyone else you work with has also turned down money created a sense of brotherhood which was extremely strong.
Hsieh wanted to make sure that people didn’t work at Zappos merely for a paycheck. But because they liked working there and were passionate about helping their customers.
And it keeps Zappos on its toes too. Because they have to make sure that their working environment is awesome and fun to make people actually want to stick with them. This whole bribe to quit works as a canary in a coal mine for them. Because if the number goes up from 3%, they know that something has changed and they have to improve their working conditions.
Hsieh is not completely bonkers. He would weed out poor employees during their 2 month training period. And he didn’t start with $3000. He tested the idea out with $100 first, then $500, $1000, $2000, and finally $3000. He wanted the number to be high enough to make undedicated people contemplate, but not a life changing amount that would make even the dedicated folks take the money and run.
The science behind the bribery
Lisa Feigenson and her colleagues from the psychology department of University of John Hopkins conducted an experiment on 189 infants. They were given two equally appealing toys and asked to choose one of them to play with.
After some time, they were given one more choice: between the previously unchosen toy and a new toy.
76% of the infants chose the new toy during the second attempt.
You choose what you like. But you also like what you choose. And corollarily, you dislike what you don’t choose. For no apparent reason except your choosing.
Psychologists call this the choice induced preference. And in further research this choice induced preference has been proven to be quite universal. It occurs with adults as well. And according to one experiment conducted by Tali Sharot and colleagues, the preference lasts even after 3-4 years!
You start liking things more when you choose them. And by asking his new employees to choose working at Zappos, Tony Hsieh made them like Zappos a lot more!
- Ask people to choose you. Make it expensive for them to choose you. Give them a bonus to quit. Because if they choose you despite your bonus offer to quit, they will remain loyal to you, do their best for you, and be happier doing it.