Amazon has made a big change to how it reviews its employees. For the first time, the company is officially using its 16 Leadership Principles to judge employee performance. These principles will now be a major part of quarterly evaluations, helping decide things like salary increases, promotions, or even performance warnings.
Starting this quarter, Amazon managers will rate employees based on three key things:
- How well they follow Amazon’s Leadership Principles
- Their performance at work
- Their potential for future growth
These three ratings will create an Overall Value (OV) score, which will directly affect an employee’s salary, career growth, or if they need to go on a performance improvement plan.
Only 5% Can Be “Role Models”
According to internal documents, only 5% of Amazon employees will receive the top rating of “Role Model” when it comes to following Leadership Principles — something CEO Andy Jassy is pushing for. This is part of his goal to build a more disciplined and high-performing workforce. In the past year, Jassy has also:
- Required employees to return to the office
- Reduced management layers
- Updated how top performers are rewarded
Stack Ranking Still in Place
Amazon still uses its stack-ranking system, which has been controversial. In this system:
- Teams with 50+ employees must rate 20% as top performers
- And 5% as least effective, even if everyone is doing well
This system has been criticized as unfair because it may force managers to rank some good employees lower just to meet the fixed percentages.
Other big tech companies like Google, Meta, and Microsoft are also becoming stricter with performance reviews. Amazon’s decision means its core values now play a bigger role in each employee’s future at the company.
Amazon says the new system will help managers review employees more fairly and consistently, and also support employee growth.
