A few articles have appeared recently which give a dystopian vision of the workplace at Amazon. While these articles focus on one company only, they suggest a related question: if technology companies are a lead indicator, is this a harbinger for what we are going to see in the West in terms of industrial organisation writ large?

The first of these was a post doing the rounds on reddit from an Amazon employee which suggested to interns at the company that they should not work there.

The second, Inside Amazon: Wrestling Big Ideas in a Bruising Workplace describes Amazon’s corporate culture. Jeff Bazos himself summed up the article nicely by saying that it revealed ‘shockingly callous management practices […] to create a soulless, dystopian workplace’.

An anonymous gist followed which had other good points in it, like the dangers of paying people in equity.

The culture described, I thought, could be identified by a few key characteristics:

  1. Peer review
  2. Churn
  3. Smugness

Notwithstanding such characteristics, there are some benefits to working in a self-described ‘elite’ workplace, in that a certain number of habits and attitudes are likely to be imbued which are then likely to be useful later on in one’s career. The real concern for those in technology or broader white-collar jobs, I would argue, is that such practices become systemic, which would remove the element if choice for employees.

Peer review

Amazon has a special messaging system called ‘Anytime (sic) Feedback Tool’ which allows employees to submit feedback on other employees conveniently. The article cites an example of someone who agreed to get in early and leave early for personal reasons, who was then ratted out by her colleagues complaining of her leaving early.

Peer review creates a problem in that it weakens hierarchy. In this example the employee’s immediate line manager could have simply said ‘yeah it’s fine we agreed it’ but clearly was unwilling to take a stand on it, perhaps as it was politically expedient.

Reasonably early on in my own career a boss of mine gave me sage advice that I have remembered ever since; that it is important to keep your colleagues on side because if they are ever in a situation where they have to vote about who they are least bothered about working with – in American parlance: who to throw under a bus – you would rather not be that person.

While peer review may seem to liberate the management layer above and create transparency, the risk is that is can create some quite nasty game-theoretic scenarios where it is advantageous to rat out your colleagues. In turn, this is not conducive to a pleasant workplace, because the potential for this situation will erode trust, in and of itself.

Churn

All churn leads to the obvious inefficiency of not being able to ask the person who’s work you have inherited. Being told “I’m not sure, ask Bob, he designed the system/held the pen/was in charge of that project … oh no wait he left” is something that most of us who have worked in an environment with high staff turnover will recognise.

That being the case, the pervasiveness of churn suggests that managers must see some benefit. Plenty of leading companies ding the bottom 10% of the workforce annually; I know of European technology companies that do this, it is normal for US investment banks (which includes some European ones which are actually managed out of the US). In the old world of industrial conglomerates, Jack Welch was famous for instituting ‘rank and yank’ at GE, binning the lowest 10% and rewarding the top 20% with greater carrot.

Some critics of churn are middle-aged people who are simply past it. I once read an article in a decent broadsheet newspaper in which an interviewee on this issue, albeit in a small marketing firm rather than a technology behemoth, was complaining that they were replaced by someone who was younger, because this person was ‘willing to work past 6.30pm’. The reality is that there are people who should probably make way for others who are hungrier and more dedicated than they are, and when the delta becomes a large one it will offset the time and effort involved in finding a replacement. That is why a degree of churn is probably required in some types of businesses.

Countries like France or Italy where established (i.e. middle-aged) workforces enjoy cast-iron job security, with no churn as a result, show two nasty side-effects:

  1. Economic growth is curtailed because labour productivity has now been capped
  2. Young people cannot get jobs without patronage, and so the best and brightest then leave to seek opportunities elsewhere in what is generally referred to as ‘brain drain’.

There is another type of churn which is binning people from divisions somewhat indifferently because there is likely to be lower revenue in the next year, in a cyclical industry. The best examples of this that I know of are the RIFs (Reductions In Force) of US investment banks. This approach creates three inherent inefficiencies:

  1. When binning without reference to performance you potentially get rid of talent which could be usefully used somewhere else in the organisation
  2. By its very nature decisions such as this without reference to anything that employees can do about it, and this lack of influence on such a key thing as whether they will have a job or not creates at best a distraction and at worst a corrosive atmosphere
  3. In large organisations with a set hierarchy, the surviving cohort can be out of kilter with the requirements in future years which creates its own inefficiencies when a layer in the hierarchy is not the right size to fulfil its function properly

The first type of churn is akin to pruning and the second is akin to hacking and slashing. Some churn is good, some churn is bad. In any event, the logical endpoint of churn is that your workforce becomes younger, and therefore more homogeneous. I would not like to weigh in on that result but it suffices to say that it is not in fashion.

Smugness

Bazos likes to say things like ‘the people we hire here are the best of the best’. “When you hit the wall … Climb the wall!”, etc.

It is well known that adherence to cults, university clubs, the Mafia, etc., is proportionate to the trial required to be admitted. In this way, tell people they are the best and if they are having a tough time a decent proportion will simply regard it as a badge of honour.

There is one significant downside to this, however, in that brainwashed staff are a risk because they become complacent; they start to believe that their company/group is the best even once it has turned a corner strategically and this is no longer the case (cf. Microsoft). From that point on it may be a very long way down indeed.

It is also a risk to the individual, because once you derive your identity or self-worth from your status as an employee of an elite company, it is branded on your psyche forever. There is a similarity here to the way that cattle are branded by ranch-hands to denote ownership. Anecdotally, there are a lot of people who wash up at third tier firms or regulating/quango entities who like to start sentences with ‘when I used to work at Goldman …’ decades after the fact, and it usually surprises their colleagues that they have not yet let go of it.

Upsides

Notwithstanding the above, there are some fair points made by Bazos and other ‘Amazonians’. Amazon is not the first company to drive people hard; we have seen this aspect of work culture and other macho trappings in the law and in banking for as long as anyone can remember. In relation to law, this was flagged quite nicely by Prof. Daniel Markovits in his Yale Law School Commencement Address where he said ‘a pervasive, effortful, and studied competition thus dominates and even overwhelms virtually every year of the first three decades of an elite professional’s life’. Ultimately what determines whether it is defensible in terms of performance – and also ethically, I would hazard to say – is how risk and reward are shared. It is not a coincidence that many of the higher echelon firms in law and finance were historically partnerships.

Bazos is right that bureaucracy, profligate spending, lack of rigour and plain laziness can and do stifle otherwise good businesses. ‘No task is beneath you’ is pretty good to bear in mind mid-career because so much of business is about – as John LeFevre might put it – bullshit facilitation. Setting up conference calls after a decade of doing the same is still important work, even though it may not feel like it. It is also worth thinking about the flip-side corollary to a policy of driving everyone hard; an environment in which a proportion of the workforce effectively freeload by benefiting from the work of others and not doing work themselves will breed a different kind of resentment.

Contagion

All this does begs the question however: if technology companies are at the vanguard of capitalism, are similar working practices coming to a work place near you?

Another New York Times article, Data-Crunching Is Coming to Help Your Boss Manage Your Time tells us, in essence, about the extent to which technology can extend the idea of the old-fashioned time-sheet and give employers more information about employees’ activities to help manage them.

A quote from MIT within this piece gives a nice summary: “The massive forces of globalisation and technological progress are removing the need for a lot of the previous kind of white-collar workers […] There’s a lot of competition, global labor pools of pretty good quality, automation to make you more productive and make your job more 24/7. These are not calming forces.”

A poster on Slashdot made the excellent observation that ‘one of the unspoken perks of many white collar jobs is that you can waste time while still appearing productive’. Certainly if closer scrutiny facilitated by technology put an end to this, that would spoil the fun rather.