Amazon Loses Favor After Announcing $15 Wage

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Amazon received good press for announcing employees would earn a minimum of $15/hour. But today’s news tells a different story.

Although the hourly wage will increase, Amazon is cutting bonuses and stock options, and employees fear it will cost them thousands of dollars in total compensation. The stock options, according to employees’ online posts, gave them a sense of company ownership. Some proposed walking out on Black Friday, the biggest shopping day of the year. Amazon had also granted bonuses for attendance and productivity, called Variable Compensation Plan, or V.C.P.

In response, company leaders said they would look at employees’ total compensation to make sure no one would be worse off after the changes. A spokesperson also released this statement:

"The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and [restrictive stock units]. 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."

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Discussion:

  • This is quite possibly a miscommunication or, more to the point, poor communication from Amazon officials to employees. How could the company have done a better job?

  • How well does the statement address the criticism? What else should the company communicate at this point?

  • How is this an issue of integrity for the company?