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Not everyone at Zappos loves Holocracy

January 19, 2016Written by RetailWire Staff

Photo: Zappos

There is no shortage of people to be found, in retail or elsewhere, with criticism of management hierarchies in the workplace. But Zappos' choice to get rid of all workplace hierarchy, including job titles, hasn't pleased everyone at the shoe retailer. The company recently reported a high level of attrition since rolling out its "Holocratic" management model. Quartz reported that Zappos recently announced 18 percent of its employees have accepted its buyout offer and left the company rather than adopt the new model. The offer, which Zappos began when it first announced the move to Holocracy, has been described as quite generous. A deadline just expired for a portion of the company that had been granted an exemption for adopting the leaderless model, so the turnover has increased from an already high rate over the past ten months. The New York Times reported last year that questions and confusion have arisen over important organizational matters at Zappos, like how to pay people in fluid job roles with no job titles. A call center worker indicated that the method of self-management, while empowering, has led to time-consuming meetings that damage productivity. Some industry watchers, such as Forbes.com contributor Ann Latham, see Holocracy as flawed. Ms. Latham said the system creates unnecessary decisions and inefficiencies, and is overly time-consuming and difficult to implement. But some of the far-out ideas Zappos has gambled on have worked. The company is known for its high-quality customer service, going as far as to help shoppers find what they are looking for at other retailers, if necessary. Zappos has appeared on the Fortune.com 100 Best Companies to Work For list for the past seven years. However, in 2015, it appeared at 86, down from 38 the previous year. In 2011, the company was ranked sixth on the list. "While we have lost a number of folks, it is important to note that we have a significant group of highly talented individuals who will be staying to help move Zappos forward," Arun Rajan, chief operation officer at Zappos, wrote in January on the Zappos website.

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