How Does Amazon Do Performance Management? Forte, OLR & PIP Explained (2024)

Is Amazon a lone wolf in the tech world?

Unlike Apple, Microsoft, Google or Netflix, Amazon's working culture is anything but glamorous. You won't find employees skateboarding across the office or kicking back in high-tech meditation pods.

Yet Amazon is undeniably a direct competitor to some of the brightest Silicon Valley darlings.

So if it's not competing on Michelin-star rated lunches and unlimited vacation time, how is Amazon winning its talent?

In 2015, a controversial New York Times article described Amazon's culture as "purposeful Darwinism" and accused the company of creating an environment where employees are ruthlessly pitted against each other using a brutal rank and yank performance management system.

But employees, including Jeff Bezos himself, spoke out against the article saying that much of it was nothing but hype.

So what's true and what's false when it comes to the retail giant's performance management system?

Unfortunately, it's tough to know for sure. But luckily, there are a few clues that can give us a good glimpse into how leaders at Amazon run their employee appraisal process.

Who is Amazon?

Before we start piecing together what we know about Amazon's performance management strategy, let's not forget how influential the tech giant is.

Amazon is arguably the most successful startup of our era and has eclipsed the likes of Walmart as America’s largest retailer.

Amazon created the modern category of retailing, pushing the boundaries on everything from eReaders to video streaming, web hosting, smart devices, and more.

How Does Amazon Do Performance Management? Forte, OLR & PIP Explained (1)

The tech giant currently boasts 200 million prime members and a net revenue of about $386 billion. Its workforce is comprised of 798,000 employees from all over the world.

Despite its top-dog status, Amazon remains ever-aware of the competition.

“Our customers are loyal to us right up until the second somebody offers them a better service,” says CEO, Jeff Bezos, “And I love that. it’s super-motivating for us.”

The Role of Performance Management at Amazon

Bezos is known to lead by lean, Six Sigma–style processes that enable Amazon to offer the best possible customer experience at the best possible price.

Thinking of changing your company's performance review process? Keep it simple with PerformYard. Learn More

But Amazon arguably gets its edge by using a data-driven approach with clear metrics to measure both consumer and employee behavior.

In Gallup's more objective assessment of the company's work ethos, Sean Boyle—head of finance for Amazon Web Services—said, "Data creates a lot of clarity around decision-making. Data is incredibly liberating."

So is performance management at Amazon about liberating employees to make the best decision on behalf of the customer or is it as ruthless and unfair as the Times suggested?

The answer depends on who you ask.

Only the Best

You can work long, hard or smart, but at you can’t choose two out of three.” — Jeff Bezos

At PerformYard, we're strong believers that every performance management process should have a clear reason for existing.

Whether you're pro or anti-Amazon, you have to admit, its performance management purpose is clear: always demand the best.

How Does Amazon Do Performance Management? Forte, OLR & PIP Explained (2)

Amazon's 16 leadership principles serve as clear performance guideposts. And almost all of them focus on an individual's ability to own and objectively test and defend their ideas, as opposed to "softer" things like collaboration or development.

But how does this play out in practice?

Continuous Feedback Meets Annual Stack Ranking

From what we were able to garner from a limited amount of public info, Amazon uses a "stack ranking" (a.k.a. "rank and yank") performance management process, in which employees are rated against each other in an annual review.

As Don Weobong—President of Telania e-learning platform—said, "Every aspect of a worker’s performance is measured and ranked — from the earliest stages of the onboarding process, employees are also treated as data subjects in every respect. At the end of the day, employees are only kept if their metrics add up."

But here's where it gets interesting. Amazon also uses continuous feedback via its "Anytime Feedback Tool". This is an internal platform where workers can anonymously praise or critique colleagues.

Continuous feedback, company goals, and structured reviews are easy to automate and track in PerformYard. Learn More

While the majority of the business world grapples with annual vs. continuous feedback, as if it's an "either/or" debate, Amazon boldly powers ahead with both.

And for employees who don't stack up?

Amazon uses a 3-month "Performance Improvement Plan," (or "PIP") to help the employee get back on track. You can guess what happens if they don't.

What Do Employees and Managers Really Think?

If scathing accounts like that of the Times are to be believed, you might be thinking, "No wonder turnover at Amazon is so high."

And it's true. Median tenure at Amazon is just 1 year.

But at Google, it's 1.1 years—not much better despite its cushy 5-star perks and seemingly well-rounded performance management model.

So what do employees love and hate about working at Amazon?

Here are a few anonymous Glassdoor testimonials that can help shed some light.

The Pros

“Keep doing what you're doing. The reason such a big company can still operate successfully is because it runs as a start-up, and you can see that in every part of Amazon. Every Day is Day 1.”

“The culture demands that you're able to defend your views or decisions in a rigorous, data driven way, and accept criticism constructively without taking it personally. This doesn't suit everyone, however if it does, then both these things become significant Pros, adding to your experience and growth.”

“You work with smart people, you work on exciting projects, you are pushed to your limits...which can be rewarding when you accomplish great things. The diversity of the potential work and innovation can be very alluring. I've often called Amazon my 'Sexy Mistress'...she's emotionally abusive, but she's so sexy that I go back for more punishment."

The Cons

“The management process is abusive, and I'm currently a manager. I've seen too much ‘behind the wall’ and hate how our individual performers can be treated. You are forced to ride people and stack rank employees...I've been forced to give good employees bad overall ratings because of politics and stack ranking.”

“You're responsible for your own career progression and finding the places and teams that are doing the stuff you want to do. No one is going to take you by the hand and help you with that.”

“You have to be self motivated. NO ONE will hold your hand and tell you that you're doing a great job. If you need constant affirmations from management, this company isn't for you.”

All of the above

Then there's the most famous employee review. The one that virtually cemented Amazon's reputation for "purposeful Darwinism".

“Amazon is built, quite deliberately, to be Darwinian. The strong survive and the weak perish (metaphorically speaking) and the 'bar' is constantly increasing. The level of performance that would have been acceptable five years ago will get you canned today. It’s a kinda crucible that will help you develop a harder edge, if you can survive, that will service you well in your career and in life.”

Diverse challenges, breakthrough performance, zero hand-holding—these are attributes that may work well with a specific type of high-performer, and they definitely seem to match Amazon's unique position as a fast and fearless innovator.

And there is some indication that respect for this approach is growing.

The average company rating on Glassdoor from current and former employees is a 3.4 out of 5. As of 2018, Amazon receives an above average rating of 3.8—up from its score of 3.4 in 2015.

But not every company has the kind of magnetic employer brand that can be considered the "Sexy Mistress" of professional growth.

While Amazon's clarity of purpose and hard focus on objective, data-driven feedback are solid performance management principles, smaller brands who need to hang to their people might be better off leaving the "ratings politics" and "emotional abuse" at the door.

More Inspiration

Amazon is not the only organization going its own way. These days, most great organizations are thinking critically about performance management and coming up with innovative new solutions.

Here are a few more examples to help inspire your own strategy:

Google’s Performance Management Playbook: Inspiration for Your Organization

3 Approaches to Performance Management:Google, Betterment and IBM

How DoesGEDo Performance Management Today?

How doesFacebookdo Performance Management

Performance Management atTesla: What we know.

HowRegeneronBuilt Their Performance Management System

How DoesUberDo Performance Management?

How DoesAsanaDo Performance Management?

HowNetflixdoes Performance Management

Deloitte'sRadically Simple Review

And if you're ready to take the next step, check out our guide to creating your own modern performance management process.

How Does Amazon Do Performance Management? Forte, OLR & PIP Explained (2024)


What does OLR mean at Amazon? ›

It's known internally as the “Organization and Leadership Review,” or OLR.

How does forte work in Amazon? ›

Forte is a simple, lightweight process in which every employee receives direct feedback from their manager, peers, and team members about their superpowers, as well as some growth ideas for the future.

How does Amazon evaluate their performance? ›

First, Amazon managers are instructed to determine how employees have held up the company's principles, and how this reflects their particular strengths. This is done in a number of ways, including their accomplishments, feedback from colleagues, and, for the first time, self-evaluations.

How often does Amazon do OLR? ›

Most Amazon employees are familiar with the OLR [organization and leadership review] as the meeting when their careers and livelihoods may be won or lost in an instant," writes Stone in Bloomberg Businessweek. Two times a year, the OLRs take place.

What is a pip at Amazon? ›

A performance improvement plan is a formal process, often accompanied by a document, to improve an employee's performance within a specific time frame. The manager directly creates the performance plan for the employee including goals to guide them through the process of improvement within Amazon.

What is OLR meeting? ›

The Organisational leadership review's (OLR) as they call these meetings inthe company, is where senior managers debate the strengths and weaknessesof subordinates for promotions and in some cases, whether or not to fire worstperforming employees.

What management approach does Amazon use? ›

Amazon leadership style has been classified as pragmatist. Pragmatist leaders “set high standards and unapologetically expect those standards to be met by themselves and by their employees”[1] The company's founder and first CEO, Jeff Bezos is an exceptional and proven business leader.

What are you most excited about at work Amazon Forte? ›

It has great opportunities to help you grow. Also, the company lets you work with several talented employees. They will always push the envelope when it comes to creating new ideas. You can work for long hours that come with a very high level of commitment.

What is a performance management system? ›

A performance management system tracks the performance of employees in a manner that is consistent and measurable. The system relies on a combination of technologies and methodologies to ensure people across the organization are aligned with – and contributing to – the strategic objectives of the business.

What is Performance Appraisal process? ›

Performance appraisal is defined as a process that systematically measures an employees personality and performance usually by managers or immediate supervisors against the predefined attributes like skillset, knowledge about the role, technical know-how, attitude, punctuality and so on.

What is the Performance Appraisal? ›

Performance appraisal is a process for evaluating and documenting how well an employee is carrying out his or her job. It is part of a company's performance management system. Performance appraisals are based on the employee's progress against goals set once a year with his or her manager.

How does Amazon manage the quality? ›

They use performance indicators to analyze product quality and ensure that the sellers get the best quality products delivered, as per their requirements. The challenge for Amazon sellers is therefore identifying and analyzing the product quality management capabilities of their suppliers.

Does Amazon give raises based on performance? ›

Does Amazon Give Raises? The short answer to this question is yes, Amazon does give raises in 2022. In fact, the company typically gives its employees raises every year. This is something that has helped Amazon to become one of the top companies in the world.

Does Amazon give yearly bonuses? ›

Sign-on bonus: Many new employees will also receive a year one and a year two sign-on bonus. The bonus is paid out with every paycheck, so in essence it's just additional salary for the first two years you are at Amazon.

How do people get promoted on Amazon? ›

“The best way to get promoted is to volunteer for projects no one else wants. If you do this once or twice and are successful you'll be recognized as someone who wants to get ahead.”

How do I survive a pip at work? ›

How to respond to a performance improvement plan
  1. Have a positive attitude. ...
  2. Take responsibility. ...
  3. Request extra time. ...
  4. Ask for help. ...
  5. Double your effort. ...
  6. Check in regularly. ...
  7. Talk with your team. ...
  8. Set your own goals.
15 Feb 2021

Does Amazon pay you to quit? ›

Once a year, we offer to pay our associates to quit. The first year the offer is made, it's for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000.”

How long is PIP? ›

This is called an 'indefinite award'. If you have an indefinite award the DWP will usually review it every 10 years. If you don't get an indefinite award, you'll get PIP for a fixed amount of time – your decision letter will tell you for how long. If you're terminally ill the award will be for 3 years.

How many picks do you get an hour at Amazon? ›

First day Pickers were expected to work up to a rate of about 60 picks per hour, and I was able to get up to 120 picks per hour.

What is water spider Amazon? ›

Water Spider

In a warehouse, "water spiders" are workers tasked with keeping work stations fully stocked. At Amazon, this means carrying boxes of goods to a "stower" who then places the items onto merchandise racks.

What is an Amazon PG? ›

A Process Guide (PG) is an hourly paid role supporting an Amazon Process Assistant (PA) and Area Manager (AM) in the fulfillment center.

What type of organizational structure does Amazon have? ›

Amazon organizational structure can be classified as hierarchical. Senior management team include three CEOs and three senior vice presidents responsible for various vital aspects of the business reporting directly to CEO Andy Jassy.

How many Amazon principles are there? ›

Amazon founder Jeff Bezos developed 14 leadership principles for the company. It uses these principles every day to guide decision-making.

What is Amazon's most important leadership principle? ›

Learn to be curious

This is perhaps the most important Amazon leadership principle as it sets the foundation of the entire business structure. Leaders are never satisfied with their product, the word, 'perfect' is not in their dictionary. It's curiosity which helps them to achieve new feats.

Is Amazon a good place to work 2022? ›

Amazon is the No. 1 company to work for in 2022, according to LinkedIn : r/technology.

How do you answer what frustrates you? ›

Here are some steps you can use to answer questions about what frustrates you, to help you prepare for your next interview:
  1. Think about reasonable examples of workplace frustrations. ...
  2. Find a clear, concise example. ...
  3. Use the STAR method to explain your anecdote. ...
  4. Connect your answer to your potential future role.
13 Apr 2021

How do you answer tell me about yourself in Amazon? ›

Amazon Tell Me About Yourself Question - YouTube

What are the 3 types of performance management? ›

3 Types Of Organizational Performance Management Systems
  • The Balanced Scorecard. ...
  • Management By Objectives. ...
  • Budget-driven Business Plans.

What are the 4 performance management steps? ›

Four Steps To Effective Performance Management
  • Step 1: Getting The Right People. In sports, the coaches with the best records are usually the best recruiters; the same applies in the workplace. ...
  • Step 2: Setting Expectations. ...
  • Step 3: Performance Coaching. ...
  • Step 4: Getting Rid Of The Poor Performers. ...
  • Conclusion.
7 Jan 2015

What are the 3 main steps in appraising performance? ›

Performance appraisal has three basic functions: (1) to provide adequate feedback to each person on his or her performance; (2) to serve as a basis for modifying or changing behavior toward more effective working habits; and (3) to provide data to managers with which they may judge future job assignments and ...

What is the difference between performance management and performance appraisal? ›

Performance appraisal evaluates the employee's performance based on how he has performed in the immediate past. Performance management proactively manages an employee's performance and ensures that the employee has accomplished all the goals, vision, mission and the core values of the organization.

What are the two main purpose of performance appraisal? ›

There are two primary purposes of performance appraisal: evaluative and developmental. The evaluative purpose is intended to inform people of their performance standing. The collected performance data are frequently used to reward high performance and to punish poor performance.

How does Amazon track customer satisfaction? ›

Amazon focuses on one simple measure of customer service quality: helpfulness. They regularly interacts with customers through non-intrusive and easy-to-use satisfaction surveys. The surveys are an effective tool for building sales and turning customers into loyal enthusiasts.

How does Amazon identify customer needs? ›

The technical details. Amazon collects data from users as they navigate the site, such as the time spent browsing each page. The retailer also makes use of external datasets, such as census data for gathering demographic details.

How does Amazon have good customer service? ›

Amazon puts customers' best interest at the forefront of every purchase by making it easy to return an item or cancel a service. It scarcely asks a question when customers want to return an item because the company doesn't want to make it a hassle, and it recognizes that customers know what's best for them.

How much do Tier 3 Amazon employees make? ›

The estimated total pay for a Tier III Process Assistant at Amazon is $59,632 per year. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. The estimated base pay is $47,875 per year.

What is the hike percentage in Amazon? ›

An Amazon employee got an 11% raise as part of a companywide pay hike, but says it's not enough: 'It's just not worth it to stay here any more' Amazon is doubling its base pay cap as part of a major overhaul of its compensation plan.

How much is a raise at Amazon? ›

Amazon said Wednesday it's raising its average starting pay for frontline workers from $18 to $19 an hour, a boost that could help it attract more employees in a tight labor market as the holiday season approaches.

Why so many people are leaving Amazon? ›

1. Leaked documents show Amazon employees are quitting at twice the rate of recent years. Low pay, a stagnant stock price, and a grueling work culture are largely cited as fueling the exodus, but increased competition also makes it easier for the most prized corporate workers to find better opportunities.

How much is Amazon performance bonus? ›

The performance bonus is 4 percent per month.

Does Amazon employees get Christmas bonuses? ›

Conclusion. Amazon offers their employees a variety of benefits to stay with the company. These benefits include annual raises, holiday bonuses, healthcare, and 401K savings plans. The annual raises begin at $0.25 and the holiday bonuses are valued at $300 for full-time staff and $150 for part-time staff.

What is a Tier 3 at Amazon? ›

T3 process assistants are essentially what are referred to as assistant managers in other organizations. Getting from T1 to T3 is relatively easy and in some cases, associates have been known to advance to Tier 3 in less than a year.

What is L1 in Amazon? ›

Entry level positions at Amazon warehouses are usually referred to as Tier 1 (T1) or Level 1 (L1) depending on the position and the type of facility.

How much does an L4 at Amazon make? ›

The estimated total pay for a Area Manager L4 at Amazon is $113,874 per year. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. The estimated base pay is $62,756 per year.

Does Amazon pay weekly or biweekly 2022? ›

Amazon workers are usually paid on a weekly basis. This is the most common and preferable way among the workers to take their salary. You'll get your weekly paycheck by Friday in the weekly payment option, though it may take one or two days longer, depending on the bank.

Does Amazon pay biweekly or monthly? ›

History of Amazon's Pay Period

Here's Amazon's pay period policy before 2020 for all its employees: Full-time workers will receive their salary every month. Part-time workers will receive their salary every other week of the month (paid biweekly).

Does Amazon pay weekly or biweekly 2021? ›

As of now all us amazon employees are paid weekly on Friday's, depending on your bank I use Chime I get paid on Wedsday nights...

How many orders a day does Amazon get? ›

How Many Orders Does Amazon Get A Day? Amazon ships approximately 1.6 million packages a day.

Do Amazon employees get Prime for free? ›

Do Employees Get a Discount on Amazon Prime? Unfortunately, NO. Employees are stuck paying full price for a Prime Membership.

Does Amazon pay you the first week? ›

First paycheck would be the following week after your training. Pay periods are bi-weekly, on your first paycheck it would most likey only include he hours for your training. Depending on the pay period, BUT should be following friday if they didnt mess up your documents like they did mine.

Does Amazon pay you to work from home? ›

As of Sep 24, 2022, the average weekly pay for a Work From Home Amazon Customer Service in the United States is $983 a week.

What day do you get paid at Amazon? ›

Now almost every amazon worker is getting their wages on a weekly basis. This is the most common and preferable way among the workers to take their salary. You'll get your weekly paycheck by Friday in the weekly payment option, though it may take one or two days longer, depending on the bank.

How much do Amazon workers make a week? ›

As of Sep 21, 2022, the average annual pay for an Amazon Warehouse in the United States is $34,268 a year. Just in case you need a simple salary calculator, that works out to be approximately $16.48 an hour. This is the equivalent of $659/week or $2,855/month.

Does Amazon do credit checks for employment? ›

So yes, they do. In connection with your application for employment or continued employment with, Inc. or its subsidiaries or affiliates (“Amazon”), we will procure a consumer report on you from a consumer reporting agency. This is commonly known as a “background check.”

How do you get paid at Amazon? ›

Funds are deposited into your Amazon Pay account after you capture payment, and they will be automatically disbursed to your bank account on the next scheduled settlement date.

How much do Amazon pay per hour? ›

Average hourly pay ranges from approximately £8.22 per hour for Operations Assistant to £14.14 per hour for Packer.

How long does it take for Amazon background check to come back? ›

1 answer. Amazon says that it should take 2-5 days to complete your background check, but it's possible that it could take longer. If it's been longer than 5 days, contact Amazon Flex support.

Which country uses Amazon the most? ›

The biggest and most important Amazon market is without a doubt the US market.

What was the first item sold on Amazon? ›

In the spring of 1995, Bezos invited a small group of friends and former colleagues to check out a beta version of Amazon's website, and the first-ever order was placed on April 3 of that year, for a science book titled Fluid Concepts and Creative Analogies.

How many packages does Amazon deliver a day 2022? ›

Across the globe, Amazon workers ship out more than 66,000 orders every hour. That's 18.5 orders per second and 1,110 every minute. The total number of packages shipped by amazon daily is around 1.6 million.

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