Not many companies can boast that they get tour visits to their offices, but Zappos Family of Companies can. The US online shoe retailer receives as many as 2,000 curious visitors per month at its warehouse and offices and rumour has it that some of these onlookers include celebrities and record producers.
Founded in 1999 by Nick Swinmurn, the Zappos Family has come a long way from its humble beginnings to becoming a well-known name among American consumers. It all began with Swinmurn unsuccessfully trying to find a pair of shoes for himself, even online. The desire to find the right pair eventually led him to start an online shoe business, Zappos.com. By 2009, the organisation had grown and joined global online retailer, Amazon.com Inc. and last year the organisation was restructured into 10 companies under the Zappos Family of Companies unit.
Zappos Family is fast gaining a reputation not only for having great customer service but particularly for being a good employer.
Fitting into Zappos’ shoes
Earning a reputation as a good employer is no mean feat and the organisation’s quirky and open culture has helped to achieve this. This culture took some time to develop but it has now become a part of everyday work practices for all Zappos Family employees.
Hollie Delaney, director of HR at Zappos.com. says that the organisation needed to define itself and the people who would work for it, and this definition came in the form of the 10 core values (see sidebox). “Our 10 core values are our foundation and our guide in making decisions,” she explains.
Some of these values may seem a tad silly to people outside the organisation – they include “Create Fun and A Little Weirdness” and “Deliver WOW Through Service” – but the organisation has proven that such values work for its employees.
The values came about not just from a management decision but also from a consensus among employees. The organisation’s CEO, Tony Hsieh, developed a long list of values (from observing best work behaviours of employees) and sent it to the entire company for feedback. These responses were eventually summarised into the 10 core values a year later.
“The company culture is based on these values,” explains Delaney. “It is a culture where you are encouraged to be yourself; people respect each other and each other’s ideas; and you are empowered to make the right decisions and use your best judgment.” These values are so vital to the organisation’s work practices and culture that new hires have to sign a core values document to state that they understand the values and would abide by them.
Moreover, for the organisation to live by its values, it needed to ensure that it found the right type of employee. “Our culture is our biggest asset and we want to make sure that the people working for us really understand and believe in what we are doing and where we are going,” states Delaney.
Zappos has a vigorous interview process that is a combination of both technical and culture-based screening in order for the recruitment managers to determine if the candidate fits the team technically and especially culturally. Applicants are subjected to open-ended questions based on the 10 core values and are also given a tour of the company. The interview assessment along with the “feedback we receive from all the employees that the candidate comes into contact with helps the recruiters make their decisions,” she notes.
In fact, the organisation goes to great lengths to secure an employee that would be the right fit. Zappos practises the Offer, which consists of giving new hires a significant sum of money (it starts at $2,000 and increases to $3,000, and eventually to $4,000) a few weeks into their training period. To some, this might be a strange practice but the organisation assures that it helps to find committed employees. So far, less than 3% of employees have taken up this offer and then left, while the company maintains a low voluntary turnover rate of 7%.
Recruiting the right people is just the first stage in perpetuating a collaborative and convivial culture. The organisation also ensures that it communicates and encourages its corporate culture through various means such as the Ask anything newsletter and the Culture book.
For the monthly newsletter, employees submit questions on an internal site and relevant department heads respond to them, which is then published for all employees to read. Also, the annual Culture book has answers from all employees to the question: “What does Zappos culture mean to you?” Praise or otherwise, Delaney states that the answers are published as they are, except for changes to grammar or spelling.
Development for the long haul
As an online retail business, serving and handling customers well on the phone is imperative for Zappos and 40% of the company’s headquarters are made up of call centres. In order to serve its customers properly, the organisation has comprehensive customer services training for its employees.
Zappos Family has a dedicated team of call centre representatives, known as the Customer Loyalty Team (CLT), but it is serious about training all its employees in customer service. No matter the position, all employees go through four weeks of call centre training (not many organisations can boast this, but the CEO has undergone this training too) and another week of warehouse training. During the training, employees learn to make mock calls and eventually make real calls with a trainer. “They learn how to use our systems, learn about our culture and core values, and get some time to practise their skills before moving into their regular jobs,” explains Delaney.
As being part of a CLT is demanding, Zappos maintains an “80:20” rule to prevent burnout of their employees. For 80% of the time CLTs are to be available or on-call, while during the rest of their work time they attend development training programmes or technical seminars. Also, CLTs spend at least 50 minutes a day writing greeting notes for customers.
The organisation has several other learning and development programmes to develop its employees. Various departments have progression plans for employees and learning expectations are laid out so that they can progress to another level. A Pipeline team, a training department within Zappos Family, provides optional classes for employees to learn new skills as well as the organisation’s history and culture.
Some of the classes include using Microsoft office programmes and public speaking. There are even customised classes to help support a department’s progression plans for their employees.
Besides development programmes, the organisation has an interesting way of keeping track of the development of its employees. It has an annual culture review comprising behaviour-based questions related to the core values. Delaney, however, points out that the culture feedback is not the same as a performance appraisal. This culture review is meant to show the strengths and weaknesses of employees in the core values and how they can better themselves in areas that need improvement.
Delaney adds that the Zappos Family believes that performance reviews should be done more than once a year, which is why it does not conduct traditional performance reviews. However, the onus is on the managers – they are expected to meet with their employees to give regular performance feedback. “Some managers meet weekly or bi-weekly while some have a monthly performance discussion. The HR team works with the managers to help ensure that employees get regular performance feedback.”
Receiving personal recognition
Creating a personal emotional connection, or otherwise known as PEC in Zappos Family, with its customers as well as its employees is vital for the organisation. Consequently, the organisation has several programmes to engage and reward its employees.
The organisation has a HR team dedicated to coordinating various events and functions to motivate employees called the P.E.A.C.E (Programs, Events, Activities, Charities, and Engagement) team. Quirky moniker aside, the P.E.A.C.E team also keeps track of employees’ personal events such as birthdays and even wedding anniversaries, and sends out cards.
Zappos has a Wishez programme, under which employees can submit a wish on the organisation’s internal site and other employees can grant this wish. Wishes on the list have included Christmas cookies to even a car being granted.
Employees can award their co-workers with one $50 cash bonus per month as a way of thanking them for their help or what Delaney says, when they are “wowed by them”. The HR sends a monthly newsletter to the entire organisation to show who received these bonuses and why.
Furthermore, managers can present their employees with Zollars, as a way of recognition. Employees can use these Zollars (fake money that comes in several denominations) to purchase Zappos products such as T-shirts and other merchandise in the company store. Managers get these Zollars from HR. There is also a Master of WOW programme, under which employees can nominate another co-worker to win a prime parking spot and a free car wash.
The organisation encourages the practice of ensuring that employees feel empowered, and the ZFrogs programme helps in this instance. Employees participating in this programme can pitch ideas that are evaluated by an executive team. If their idea is selected, the employee can take time off from their everyday role to work on making this idea into a reality.
Ultimately, Zappos Family is interested in maintaining its culture and taking care of its employees. Delaney states that the challenge for the organisation is to “sustain and grow the culture” while also ensuring that employees can pursue their passions.
At a glance
+ Total number of employees: 3,400
+ Size of the HR team: Nevada, 40 people; Kentucky, 31 people
(The HR team includes shuttle, travel, reception, and employee concierge teams. The HR team is divided into two teams; one in Nevada and one in Kentucky)
+ Key HR focus areas: Culture, finding and retaining the right people
Zappos Family 10 core values
+ Deliver WOW Through Service
+ Embrace and Drive Change
+ Create Fun and A Little Weirdness
+ Be Adventurous, Creative, and Open-Minded
+ Pursue Growth and Learning
+ Build Open and Honest Relationships with Communication
+ Build a Positive Team and Family Spirit
+ Do More With Less
+ Be Passionate and Determined
+ Be Humble
Who’s who in HR?
Director of Human Resources
Sr. Manager of Human Resources
Benefits Assistant Manager
Employee Relations Assistant Manager
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