Leveraging Human Capital

 

 

 

 

 

 

 

Leveraging Human Capital

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Introduction

Amazon is one of the fastest-growing e-commerce companies that rapidly morphed into a Multinational Corporation (MNC). There are principal customer types that Amazon serves: sellers, final consumers, enterprises and creatives. Amazon’s business model is a web-based platform that provides a technological infrastructure used by a business with varying sizes and market niche to sell goods and services. The website has been developed in such a manner that it offers a customer-friendly approach with an easy navigation system, low commodity prices, vast selection of goods, and the convenience to meet consumer needs in literary a single virtual marketplace. Nonetheless, this website is maintained by a team of employees. With the opening of its first brick-and –mortar location four years ago, Amazon attracted a lot of media attention. However, this opened the flood gates for other physical stores such as booksellers, grocery pickup locations and cashier-less convenience outlets. Due to this rapid and unprecedented growth, Amazon has scaled its employment and recruitment due to the many stores since it opened across the globe.

Problem Identification

Amazon has constantly made it its responsibility to recruit an adaptable and talented workforce. Doing so has been able to extend its strategic plan of linking work remuneration with ownership in the organisations (Lang et al., 2012). Thus, with this strategic plan predicated on efficient customer delivery and distribution channels, the company has placed enormous emphasis on the human resource department (Lang et al., 2012). These strategies have led to the recruitment of a small fraction of applicants out of the HR department’s numerous applications daily. However, this arduous hiring process seems to be one of the core contributors to Amazon’s success since it subjects potential employees to several interviews coupled with a set of projects administered by “bar raisers.”

Thus, getting employment at Amazon has proven difficult for most applicants who have claimed the recruitment process is particularly cumbersome (Lang et al., 2012). With such a recruitment process, it has been difficult for this company to diversify its workforce and raise questions on its diversity and inclusivity policies. In essence, the company has not been able to hire enough persons from ethnic minorities. Additionally, many of the employees are not motivated, and thus the company experiences increased employee turnover.

The challenges in recruitment and retention of employees at Amazon

Having an arduous recruitment process at Amazon has been one of the core reasons for its success. However, this has also led to the inability to hire enough people from ethnic minorities. Recruitment refers to hiring employees under law and signing contracts that detail their roles and the company objectives and goals (Myers & Dreachslin, 2007). With recruitment, the employer and employee thus enter into a psychological contract. It is an unwritten, implicit, and explicit agreement between employees and employers and sets out mutual expectations (Robbins & Judge, 2018 p. 186). However, employee retention refers to an organisation’s capacity to maintain its workforce over a specific period. Higher employee retention points to a more satisfied and happy workforce, while low retention exhibits unsatisfied employees (Cloutier et al., 2015). Thus, the four fundamental challenges in recruitment and retention of employees at Amazon are as discussed below:

1. Applicant screening challenges

The current hiring process at Amazon does not allow the recruiters to go through all the stockpiled resumes sent for job application. It is further made challenging by the “bar raisers” who might decide that the applicant lacks the proper alignment with the organisational culture.

2. Poor candidate experiences

Being that the hiring process at Amazon is a difficult one with very low odds of being employed, many unsuccessful applicants, especially from ethnic minorities, get discouraged from applying to the various job openings at Amazon (Rozario, Venkatraman, & Abbas, 2019). They feel they do not have a chance at success due to the lengthy interview process with very little to no employment guarantee.

3. Process optimisation hardships

Recently, Amazon tried to integrate Machine learning frameworks into their recruitment process to optimise the hiring process. It entailed training its AI powered framework to scan resumes and score them from 1-5 (Dastin, 2018). However, this system is biased and favours men as compared with women. The algorithm penalised resumes that used words like “women’s, ladies” and exceptionally scored resumes that had words “capture and executed” (Dastin, 2018). Since many applicants from ethnic minorities, especially women, have lean resumes, such a system scores their resumes lowly, limiting their opportunity to be recruited by Amazon.

4. Fair pay and compensation

The recruitment process is premised on a strategy that links remuneration and compensation with ownership at Amazon. However, this system is redundant since the jobs have varying responsibilities and demands (Ployhart, 2006; Rozario et al., 2019). Hence, it creates an environment where some employees feel they have more rights of ownership to the firm than others. Thus, it is challenging to balance all the issues of fair remuneration for all employees, especially if the firms are not sure of the benefits that best suit each employee group and the payment calculation procedure.

Motivational Issues at Amazon

Due to the arduous and lengthy recruitment process, it is clear why many employees have lost their motivation to work at Amazon and thus are not easily retained. Vroom’s motivation theory is essential in understanding the motivations issues are prevalent at Amazon. The theory postulates that employees are motivated to put more effort into a task if they believe a relationship between their actions and the rewards awarded (Parijat & Bagga, 2014). The theory is premised on valence, instrumentality and expectancy. At Amazon, these three tenets are evidenced as follows:

1. Valence

The current employees do not feel valued enough. High-performing employees are not recognised, while the low performing ones are not given any incentive to improve (De Simone, 2015).

2. Expectancy

The employees expect senior management to show exemplary leadership through engagements and open communication. These are, however, lacking at Amazon since many at the helm of leadership treat the workforce as mere employees and not people. The result is a disgruntled and dissatisfied workforce.

3. Instrumentality

It refers to the association of performance with rewards. Many high performing employees have quit and sought employment elsewhere due to the managements inability to recognise their achievements (De Simone, 2015) fully. Ignoring the achievement of high performing workers leads to demotivation.

Optimisation of OB processes for improved employee recruitment and more excellent retention

1. Selection techniques

These refer to the different processes and methods through which employees are recruited and retained at a workplace. Amazon’s applicant selection process is a long and tiring one due to the long-hour interviews applicants are subjected to during the recruitment stage. The risks of this selection technique are that the applicants become frustrated with the whole process, even getting employed. It thus comes as no surprise if the recruited becomes demotivated within the first few weeks of their employment.  To optimise the selection techniques and processes, Amazon should;

• Provide applicants with aptitude tests (Sandhya & Kumar, 2011). This can be done online and should only last a few minutes (<40minutes). These judge how well an applicant can do a task relating to the job.
• Utilise gamification where the applicants are asked to play online/offline games. This is useful in highlighting persons who have taken a recent career change and sorting resumes to acquire the best talent (Joy, 2017). The hiring team will then have a better chance of interviewing a few qualified applicants from a diverse pool of talent (Shree & Singh, 2019).
• Reduce the interview duration. The lengthy interviews are a significant discouragement to many applicants, limiting the pool of ethnic minorities interviewed for a job position.

Pros and Cons of the above selection techniques

The main merit of subjecting employees to aptitude tests, gamification and short interviews is that Amazon screens through applicant resume to get the best talent in a short time, saving the company a vast amount of resources. Aptitude tests and gamification are imperative to judge if an applicant can undertake any task related to the job. The demerit of these techniques is that they might not be an accurate representation of an applicant’s qualities. Many applicants have flanked these exams due to external pressures but still, perform well in job duties.

2. Employee engagement and motivation

Demotivated employees are not suitable for business. The optimisation of this process requires Amazon to make their working environment fun, recognise and award top performers by providing career improvement workshops, developing clear communication lines, and treating the employees as people and not company subjects (Kumar & Mathimaran, 2017).

Pros and cons

The significant merits of the above engagement and commitment strategies are that employees will feel valued. It allows the company o equally give feedback and prioritise equitable compensation. Employee engagement and commitment is also advantageous since it encompasses promoting flexibility to achieve work-life balance. By doing so, employee burnout is significantly reduced, keeping them energised for work. However, the demerit is that such strategies require many company resources (time and capital), which may make the company incur added expenditures.