With Zappos revolutionizing the way people buy shoes, it now has a new experiment in the works: a type of self-management structure that eliminates hierarchy and bosses.
The problem, however, is not everyone is happy with the idea, prompting the company to offer buyouts for those workers who couldn't stomach the new plan.
Called a "holacracy," this type of management evolved in the past decade as a way to get people to work together as effectively as possible through a distributed authority system, according to Holacracy.org. "Everyone becomes a leader," according to the movement's website.
That appealed to Zappos leader Tony Hsieh, who has noted that cities usually become more productive as they grow larger, while corporations often get bogged down in bureaucracy. For an e-commerce business like Zappos, which is owned by Amazon.com (AMZN), getting workers to be more entrepreneurial is part of the appeal of a holacracy.
But the shift into a hierarchy-less organization hasn't been entirely smooth, with Hsieh noting in a memo last month that the structure "is not for everyone." Along those lines, the company offered a buyout to employees who felt the new structure wasn't the right fit.
So far, about 14 percent of the company's employees have taken up the offer, or about 210 people out of Zappos' roughly 1,500-strong workforce, spokesman Josh Pedro told CBS MoneyWatch.
Those who are leaving will receive at least three months of severance. For employees who have worked there for four or more years, the severance will be one month for every year worked there, the company said.
"Not everyone is comfortable with self-management and self-organization. Some people like being told to do steps one through 10. So we just wanted to make sure that the offer was generous enough for people to make the right decision for themselves," Hsieh told the Las Vegas Review-Journal."Prior to emailing out the offer, we already had planned on hiring more employees, so this just means we need to increase those hiring plans even more than before."
Hsieh's buyout offer follows his philosophy that he only wants employees who are excited to be there. That means new hires are offered $2,000 to quit if they decide they aren't a good fit. About 1 percent to 3 percent of new hires take the severance offer, according to The Wall Street Journal.
Still, not everyone took the severance package because of philosophical problems with the holacracy, The Washington Post noted. According to executive John Bunch, some employees took it to pursue other business opportunities. Bunch added, "Ultimately, however many people took the offer is the right number because they are doing what is best for them and for Zappos."