Companies Are Paying Employees to Quit, And That Might Be a Good Idea

Jessica Beeli  |

When quitting your job, you’d likely expect to be thrown out the door, briefcase open, papers flying everywhere, and your former boss sneering “and Stay Out!” What you wouldn’t expect is $25,000.

But the Santa Monica-based video game maker Riot Games does exactly that. Riot will pay an employee 10 percent of their annual salary, up to $25,000, to quit. This new policy, which is called “Queue Dodge,” is available to employees anytime within their first 60 days.

The “League of Legends” maker is offering this buyout to employees even if they have only worked one day. Now you might ask, why would anyone pay someone to leave?

The main philosophy behind it is getting rid of an employee who does not benefit the company. Paying someone to quit is often more painless than the firing process. An unhappy employee can cost a company a lot more than a quick onetime payment to send them on their way.

These companies are filtering out subpar employees using economic incentives, getting rid of people who stay in their jobs solely for the money. Policies like Queue Dodge ensure that the remaining employees are dedicated to their work.  

This policy helps the company maintain their culture along with fostering job excellence. Despite Riot Game’s rigorous interview process, some hired employees just don’t mesh with the company’s culture. If an employee doesn’t align with the company’s way of doing things, this offers them a quick and mutually beneficial way out.

Building Culture by Self-Identifying "Mismatches" 

“From the beginning we’ve focused on culture. We operate on a foundation of shared mission, values, passion, trust, and mutual respect. If someone gags on the unique flavor of our culture, they’d be doing themselves and the company a disservice to hang on just for the paycheck,” said Riot Games in a statement. “We’ve designed Queue Dodge to help self-identified mismatches move on in an open, positive, and constructive way.”

For a video game maker, a 10 percent payout isn’t a huge loss. The average game programmer earns $84,337, and salaries can grow to well over $120,000. For programmers who value job security and enjoy their work only a couple months pay isn’t enough to tear them away. $25,000 is a small chunk out of the hundreds of thousands that they’ll make over the years.

Riot Games isn’t the first company to pay people to quit. Zappos, the online shoe retailer, implemented a similar policy back in 2009. And now

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Zappos parent Amazon (AMZN) is also offering a similar deal.

Zappos calls their payout “The Offer.” This deal offers $2,000 to encourage people to leave if they don’t want to stay. CEO Tony Hsieh wants to ensure that his employees are “here for more than just a paycheck. We want people to believe in our long-term vision and want to be part of our culture.”

Amazon’s similar policy offers employees $2,000 their first year and raises it by $1,000 each year until it reaches $5,000. As Bezos wrote in his shareholder letter, "the goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company."

Stopping "Active Disengagement"

These companies hope to provide enough of an incentive for people who aren’t motivated to excel at their jobs or don’t mesh with the company’s culture to get out. This policy can save a company from under-performing and disengaged workers. Gallup shows that “active disengagement” of employees costs the United States around $550 billion every year.  

These types of polices also have the potential to save companies risk and money down the road. If unsatisfactory workers choose to leave on their own, rather than holding out until they get fired, the company risks fewer termination related lawsuits. At the same time, if unmotivated workers leave willingly, it reduces a need for layoffs, preventing future hits to employee morale.

Despite its unconventional nature, buyout policies are often mutually beneficial. Getting rid of unmotivated workers shows employees that the company doesn’t want people who don’t want to work there, and emphasizes that the company is continually working to protect its own unique culture.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

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