This company pays workers up to $25,000 to quit

Riot Games gives employees 10% of their salary to leave, even if they've only worked there for a day.

By The Week Jun 24, 2014 1:41PM

Image: Woman counting money © Jose Luis Pelaez Inc, Blend Images, Getty ImagesBy John Aziz


A $25,000 payout is nothing to sneeze at. It's enough to cover most Americans' living expenses for at least a few months. You could even start a business or put a down payment on a home.


Now one employer -- Riot Games, the maker of the popular video game "League of Legends" -- will pay its employees 10 percent of their salary, up to $25,000, to quit their jobs, even if they have worked there for only one day. 


Other employers are offering a similar deal, including Zappos, which will give employees $2,000 if they want to leave, and Amazon (AMZN), which is offering $3,000 to workers in its warehouses, and up to $5,000 for more experienced employees.


Are they crazy? No. These companies are doing something smart. They're using basic economic incentives to make sure that they only employ people who are enthusiastic about their work. This is an economic filter to foster job excellence.


In the grander scheme of things, a 10 percent payout isn't a huge amount of money. In the U.S., a game programmer with less than three years experience earns on average $72,198 a year. Programmers with more than six years experience take home on average $124,833. It is really only a couple months' pay.


For individuals who want to keep their job, $25,000 is tiny compared to the hundreds of thousands of dollars they could earn over the years, and the enjoyment they get from doing a job they love.


But it is enough of an incentive to ease out the people who aren't enthusiastic about their job, and therefore will not even try to excel at it. For example, individuals who want to quit and start their own business. Or those who feel like they just don't fit in with the firm's culture. This kind of incentive can save months or even years of difficulty and under-performance, and allow a firm to look for a more enthusiastic replacement sooner. Everyone benefits.


Amazon's $3,000 cash offer shows that that this system can be applied down the pay scale. It might only pay a single month's bills, but for workers who really aren't happy, it's enough for them to quit and look for a new job.


While I doubt we'll see Wal-Mart (WMT), McDonald's (MCD), or Burger King (BKW) offer this kind of incentive for workers anytime soon, maybe they should. A disgruntled employee, in the words of Eminem, "working at the Burger King, spitting on your onion rings" can often end up costing a corporation a lot more than $2,000 or $3,000.


More from The Week

128Comments
Jun 24, 2014 3:14PM
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Can we pay the Congress, Senate and the White House to quit?  I can wish.
Jun 24, 2014 2:16PM
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Offering employees upfront money to quit is a great way to get rid of employees who do not want to work for you. If you need quality employees (not walmart or target) then this can be a great strategy. The companies that have implemented it have had success which is why they continue to do it. 
Jun 24, 2014 5:01PM
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McDonalds and WalMart can't get people to stay, they don't need to pay them to leave.
Jun 24, 2014 4:33PM
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I know someone who took a GM buyout a few years ago and could not believe they did it.  Left a $25 hour job for a lump sum of $70k.  They had bad credit and put half of it down on a rent to own house then proceeded to blow through the rest within a few short months.  They lost the house and all her money into it and ended up in trouble with the IRS.  They had no other skills besides factory work and are now living with their kids.  Absolutely the most ridiculous financial move ever. 
Jun 24, 2014 2:42PM
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exposes what  corp America thinks your experience and hard work is worth to them...mean while ceo works a year and gets$50 million
Jun 24, 2014 2:08PM
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like you stated, "While I doubt we'll see...." others in USA doing this. 

 

it's a niche "benefit" for a niche group of people.

Jun 24, 2014 3:00PM
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There is also a flip side to this. The company obviously feels they can have the job done by cheaper labor (overseas).  This is a good way to get rid of you, not pay out anything for jobless benefits.
Jun 24, 2014 4:01PM
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This is $25,000 from a $250,000 annual salary. You'd have to be downright miserable to take that kind of payout. Hell, you can even come out ahead of that $25,000 by working there for less than 2 months. My guess is that if you're worth that much, you've probably decided that your field is for you. For the less than 1% who probably do take that offer, it's probably worth while for the company to get rid of them with incentives than to keep them on for a few extra miserable months.
Jun 24, 2014 4:31PM
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Wal-Mart, McDonalds and Burger King would never make an offer like that. Every employee would take the money and run! These places, and more are terrible to work at.
Jun 24, 2014 3:47PM
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Let's see, how do we get rid of our high paid American workforce so we can hire really cheap labor (that is pouring over our abandoned southern border); and how do we get rid of our high paid American Tech workers with cheap H1N immigrants (that the multinational corporation's cronies in Washington are trying like hell to increase) without admitting that we are bound and determined to eradicate the American Middle Class? Oh wait....... I have an idea!
Jun 24, 2014 5:12PM
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The problem in the first place is poor people skills within the management level. Not only the fact that management is inept to hire qualified personnel in the first place, management is unable due to their own lack of skills to "manage". And this problem originates with corporate management, all the way up the ladder to president, CEO, and Chairman of the Board. The "Peter Principal" states "One ultimately rises to one's own incompetence".
Jun 24, 2014 5:03PM
Jun 24, 2014 3:14PM
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Are the HR Departments at these companies doing it wrong?  They're hiring people who have to be PAID to leave?  Clearly, they don't have employees nearing retirement.
Jun 24, 2014 2:44PM
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Wouldn't this incentive encourage the enterprising employee to strike out on their own, just leaving those behind who are merely looking to collect a paycheck?
Jun 24, 2014 9:52PM
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Are they still accepting applications?  I only want to work with them for a day.
Jun 24, 2014 5:20PM
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To:Elijah Cummings (D) from D.C.-time to quit and head out to pasture. You can give the IRS Chief a knobber on the way out !!!!!
Jun 24, 2014 3:51PM
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For most so-call white collar employees, a minimum of 2 weeks severance payout (about 4.2% of annual salary) has been pretty-much standard practice. The amount of such payouts ascends with additional years of service, and readily can exceed 10%. The other story about Zappos and Amazon is an old story. Anyway, Zappos and Amazon are the same corporation. Note to the author of this piece: where's the actual news?
Jun 24, 2014 6:11PM
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I'm 100% sure every employer should have to pay out a severance package to any employee here in Amerimex who wants to resign their jobs, if they give a two week notice.  Example...  this should be based on one week's salary for every year worked.  If a CEO can receive a severance package, than average workers should be able to also.   An employee should have had to work at least one year to be eligible.
Jun 24, 2014 6:10PM
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This seems like a better method of getting rid of employees to me than the old standard of inventing an "attitude problem" or a "performance and productivity problem" that often does not exist.  This is a common technique for getting rid of employees that likely don't have any real problems doing their jobs well, but are either getting old or don't tell their manager only what the manager wants to hear about schedules, quality, etc.  The problem is that when you quit, you have no chance to collect unemployment while you look for another job.  If the job gets too bad, hang in until they fire you.  Firings don't carry the stigma they used to, and at least you can get unemployment.  It's not like you're going to ask the company to give you a reference anyway.
Jun 24, 2014 3:26PM
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Several agencies in the federal government is paying many employees $25,000 to retire or resign by the end of this fiscal year.
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