World Class Faculty & Research / September 24, 2015

Debating Workplace Culture, at Amazon and Elsewhere

SMITH BRAIN TRUST — Can you have a high-powered job and also a rewarding life outside work? Do ambitious companies have any incentive to make this happen? And are market forces sufficient to make sure that workers with families or sick relatives are treated fairly by managers? These were among the questions raised during a recent lunchtime debate sponsored by the Ed Snider Center for Enterprise and Markets at the University of Maryland's Robert H. Smith School of Business.

The debate, titled "Work Culture: Does One Size Fit All? And Who Can Have It All?" was inspired by a recent New York Times investigation of work culture at Amazon, which reported that working relentless hours (including on vacation) was the norm, that employees were pitted against each other in a "rank and yank" system, and that a culture of frank, occasionally brutal feedback included encouraging employees to criticize their peers to bosses through anonymous channels.

The piece also recounted instances in which people who developed illnesses or suffered other crises were allegedly "evaluated unfairly or edged out rather than given time to recover."

The debate panel comprised Rajshree Agarwal, the Rudolph P. Lamone Chair and professor in strategy and entrepreneurship and director of the Snider Center; Christine Beckman, professor of management and organization and academic director of the Center for Social Value Creation; and Waverly Ding, associate professor of management and organization.

Beckman suggested that Amazon was succeeding in spite of, rather than because of, such policies: "Under the system they have created, you end up at the end of the day with one type of person at the organization—a person that has the type of life that allows them to work all the time," Beckman said: someone who wants their life to consist mostly of work. "And from what we know about the benefits of diversity of all kinds — whether we are talking about racial diversity, gender diversity, lifestyle diversity, or information diversity — you lose a lot when you select around that one characteristic."

In particular, Beckman said, women who might have been willing to work 70-hour weeks in their early 20s might exit the company as they start families, costing Amazon valuable expertise and talent. "Women and men are increasingly saying that they don't want to work in these intense work environments - even if they want engaging and challenging work. The problem isn't whether some individuals are willing or not willing to work in this environment. The problem is how companies think about and structure work, taking into account the full trajectory of people's careers and outside lives."

Agarwal argued that high turnover need not be problematic, if it means that the employees who stay are the ones who embrace and thrive under Amazon's culture. "The proof is in the pudding," Agarwal said. "And one of the ways the proof does come out is that Amazon has performed very successfully … To satisfy consumers, an important stakeholder group, Amazon needs to ensure that their employees, another key stakeholder group, bring their minds and their best effort to work. If, in fact, Amazon is so bad, and it has so suffered the cost of losing diversity through 'churn and burn,' and if some of the employees are complaining that their minds are shutting off, then Amazon will have paid the price in terms of a lackluster performance.”

Agarwal said she trusts market forces to reward and punish firms for their strategic decisions. "I trust markets to create enough heterogeneity of workplace cultures that each one of us can figure out where it is that we fit best, based on our own and the company's values," she said.

As for men and women who paid a professional price at Amazon when they started families, Agarwal drew a distinction between "having it all" and" having your cake and eating it too." Parents — Agarwal noted that she is the mother of two teenage daughters — might choose to work less intensely than childless peers, and they will also enjoy other psychic benefits. But they should accept as part of that choice that people who work longer hours might reach higher professional heights.

Agarwal also said it was not unreasonable to give someone a low evaluation if they were ill, or had to cut back on hours due to their obligations as a caretaker. That was not incompatible with a humane workplace: "Companies need to take into account the fact that life happens," she said, "and they need to accommodate these happenings. But on the metrics of objective performance, people still need to be gauged on where they rank."

The three Smith professors also touched on the issue Amazon's policy of trying to quantify, all but "continuously," the performance of employees, as well as its system of anonymous feedback, which some employees thought led to backstabbing.

Ding said: "I read Jeff Bezos's book that articulates his ideas about management, and at one point he says something like, 'Think big, and be innovative.' My immediate response when reading the New York Times article was, 'Jeff Bezos must be kidding himself.' If you want your employees to think big and be innovate and creative, the last thing you want to hold them up to is those kind of metrics."

Putting people under such micro-scrutiny, Ding suggested, was a recipe for small thinking, not creative output.

Bezos himself has said that the Times piece did not accurately reflect his company's culture, which was intense but caring, he said. And he urged anyone who had experienced "callous" treatment by managers to contact Amazon's human resource's department — or himself, directly.

The Snider Center will sponsor periodic debates throughout the academic year on important business issues.


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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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