HR Management
Zappos: internal culture…
October 3, 2019
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Sidelining financial performance, becoming the best employer is a tougher task. Tony desired to develop a fun corporate culture instilled with a set of values. He found ten core values and embodies them as assets.

However, values are individual and self-cultivated; they cannot be taught in classrooms. So the recruitment evaluation happens on the culture-fit rather than job-fit. In fact, Zappos.com gives $4,000 (raised from $1,000 at the beginning) to new hires.

At a nascent stage, Zappos understood that it needs to recruit people who can provide wholesome customer service.

Jenn Lim, CEO of Delivering Happiness (a company co-created with Tony Hsieh in 2010), draws attention towards ‘happiness in work, community, and everyday life’. :

Rebecca Henry, the former Director of Human Resources for Zappos, mentioned the company deliberately takes actions that reflect the picture of their fun and corporate culture designed in the form of ten core values.

The recruitment process at Zappos is slow at it can take months for a new hire to come on board. The prospective employees can visit the office informally, talk to existing employees, and attend events just to have a glimpse of their likely workplace.

Zappos family believes in culture-fit. The recruitment process gives the first 50 percent to the culture-fit regime and necessary skills test. If a prospective fails in the same, he/she cannot move to the next step of the meeting the hiring team.

For better customer service, Tony shifted its base from Bay Area to Las Vegas, Nevada in 2013. Amazingly, 80% of Zappos existing employees shifted on a payment of $13 per hour when the industry average was around $15 per hour.

Once hired, the new recruit needs to be in their call center learning how to respond to customer needs. Zappos has no time restriction on attending a customer call. The company broke the record for the longest customer-service call that lasted for 10 hours and 43 minutes. The customer should happily keep the phone down even if he/she doesn’t make any purchase from the site. If the required product is not available on Zappos site, the customer service person may go on a competitor’s site and provide the information about the required product to the caller.

Zappos publishes an annual 480-page Culture Book, highlighting unedited versions of existing employees’ work experience and their understanding of Zappos culture. The publication has found its readers outside the company zone also.

Promotions and raises come up with building capacities and skills. An employee has to pass a skill test for any pay raise. However, an employee in call center needs to be present on call for 80 percent of its time. On the other hand, managers need to spend at least 10-20 percent of their time on employee team building activities.

Performance evaluation, or to be precise, performance assessment also happens on the scale of core values. Employees are guided on enriching their value system by the managers.

Adding to the limitless culture-define system, employees enjoy free lunches, no-charge vending machines, a company library, a nap room, and free healthcare. They are encouraged to use their Twitter accounts for casual communication rather than pitching for promotion or official news.

Values also follow a top to bottom approach. They must be reinforced at continuous intervals. When you say you have an open-door policy, Tony’s office has no doors. He sits in an open cubicle with his employees. He attends the customer calls during the holiday season when any employee needs rest for a while.

Zappos CEO Tony
Zappos CEO, Tony Hsieh (extreme right) with his quirky team

Hsieh believes in transparency in communication. Now keeping everything transparent comes up as a huge responsibility. When the company fired 8 percent of the workforce, the CEO sent an in-staff mail to each employee about the development. He also tweeted the complete explanation for the termination so that the outside world gets information from authorized people. This shells the company from grapevines and rumors.

“7 years in a row since 2009, Zappos.com is renowned as one of FORTUNE’s 100 Best Companies to Work For®.”

The online seller also designs customized training programs for other companies so that others learn the happiness track. Unsurprisingly, people from Toyota and Southwest make regular visits to Zappos office just to experience the culture.

Over time, Tony found a void in effective productivity. He wanted a more autonomous structure and increased efficiency. In 2015, Tony compelled employees to accept Holacracy, a self-management organization structure after experimenting with it for nearly two years in the company.

Zappos.com survives with the highest level of customer satisfaction, extremely happy employees and transparent supply chain management. The culture is desirous and a benchmark for unorthodox management. This can only happen when you have a leader as zappy as Tony Hsieh

About author

Dr Shailesh Thaker

Dr. Shailesh Thaker is a world-renowned management thinker and trainer on organizational behavior and development. He is the CLO of Knowledge Plus Inc., a highly reputed training firm based in Ahmedabad, India, helping organizations to achieve international benchmarks in management practices.

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