MENU

210 Zappos Employees Opt To Leave Rather Than Have No Managers And Titles: What's Holacracy?

Close

Not everyone wants to be the leader of their job domain, especially at online shoe seller Zappos, which is losing about 21 percent of its workforce as it transitions internal operations to a holacracy management strategy.

The Amazon subsidiary, under the direction of Chief Executive Officer Tony Hsieh, has been slowly shifting to the nonmanagement business approach for the past 18 months and announced in late March it was fast-tracking the effort. Those who weren't happy or onboard with the management shift could take advantage of a one-time resignation offer.

Holacracy, in simple terms, eliminates as much management as acceptable and puts staff in individual leadership roles that require self-governance. Teams conduct regular "governance" meetings with the goal of clearly identifying who is in charge of what and establishing individual accountability. The goal is a supervisory structure that eliminates the personal ego and deters politics from coming into play in personnel management.

Typically, when companies make the holacratic move, about 1 percent to 2 percent of a workforce takes leave. But in Zappos' case it's losing 210 employees of its 1,503 payroll. Some workforce experts believe the result is something Zappos may want to study before making such a radical business shift. But Zappos is clearly unperturbed by the opt-out wave of workers.

"Whatever the number of people who took the offer was the right number as they made the decision that was right for them and right for Zappos," John Bunch, the employee who is managing the nonmanagement strategy, stated in a media report in response to the 210 resignations.

The opt-out offer includes at least three months severance and health insurance coverage for a few months. Holacracy is not new to Amazon as the mega online retailer implemented the workforce approach a few years back in its warehouses with a "pay to quit" option where workers can take leave with a few thousand in their pocket depending on employment tenure.

"In the long run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company," Amazon CEO Jeff Bezos stated in a company letter to shareholders last year.

It's also not a new philosophy for Hsieh, who had implemented a holacractic approach in his Downtown Project, a multimillion dollar plan for pumping Las Vegas up with new business. Some reports have stated, however, that Hsieh eventually stepped away from the initiative due to the fall-out in taking the holacratic strategy, given reports of poor hiring decisions and even employee suicides that may have been tied to the workforce structure.

ⓒ 2018 TECHTIMES.com All rights reserved. Do not reproduce without permission.
Real Time Analytics