Why It's So Difficult to Climb Amazon's Corporate Ladderby
Inside the Internet juggernaut Amazon.com, there’s near constant pressure to perform. In dozens of interviews ranging over two years for my book, The Everything Store: Jeff Bezos and the Age of Amazon, employees often sounded exhilarated as they boasted that they have never before exerted a more direct influence on products and customers. Just as frequently, they sounded frustrated and overwhelmed, beset by what they described as an adversarial culture and a grinding pace of work.
Amazon declined to comment on its internal workings for the book or the excerpt appearing in Bloomberg Businessweek. But in my interviews with rank and file employees, one common complaint I heard is that positive feedback from superiors is rare and promotions even rarer. This, it turns out, is probably by design. Amazon Chief Executive Officer Jeff Bezos seems to believe his managers must raise the performance bar with every hire and promotion and that only exceptional talent should progress within the organization. As he has done in so many other ways, Bezos has codified his beliefs within his company in the form of a custom called the OLR, for organization and leadership review.
OLRs are a set of biannual meetings at Amazon at which senior leaders in each department gather to debate the strengths and weaknesses of their subordinates, to approve promotions and, in some cases, target the worst performers for dismissal. An internal company presentation posted on the Web describes the custom.
“OLRs give us the opportunity to identify our future leaders and prepare them for their next challenging role,” it reads. “Our Least Effective 10% of employees will be targeted for appropriate action to keep Amazon’s performance bar high.”
Most Amazon employees know the OLR as the meeting where careers and livelihoods can be won and lost in an instant. Say you’ve worked tirelessly at Amazon for several years. You approach your boss, asking for a promotion and a raise, and he agrees. Good news, right? Not so fast. The boss, perhaps a vice president, attends an OLR that begins as most Amazon meetings do: With everyone reading printouts of a six-page “narrative” detailing the meeting’s agenda. After your boss’s fellow VPs quietly sit and read the pros and cons of your promotion, a debate follows, with various execs weighing in with their own experiences working with you.
The discussions can get heated. Only a limited number of promotions are handed out every year, so if you get bumped up, someone else’s favorite subordinate might have to stand still. Anyone in the room can sink a promotion. Thankfully, you are not present for the showdown.
This brutal approach to promotions is Bezos’s way of avoiding political or unnecessary advancement and applying the company’s corporate values evenly across the organization. Yet many employees I spoke to in the course of reporting the book complained that OLRs yield exactly the kind of politics they were created to prevent. Ambitious employees tend to spend months having lunch and coffee with their boss’s peers to ensure a positive outcome once the topic of their proposed promotion is raised in an OLR.
Some Amazon veterans also complain that their fates hang on the ability of their boss to make their case persuasively—as opposed to merely excelling at their jobs—and that new managers are often unable to get anyone promoted for years. And they say that anecdotes about their performance tend to dominate these meetings, rather than cold, hard data about what they have accomplished. Amazon is famously run by studying and responding to its own data; yet when it comes to promotions, decisions are often subjective and guided by human emotions and petty political dynamics.
OLRs aside, another reason it’s difficult to scale the ranks at Amazon is that the corporate structure is remarkably flat. There are only 10 “levels,” the classifications assigned to various job descriptions. Here they are, for posterity:
•Levels 2s and 3s belong to the manual laborers who work in the Amazon fulfillment centers and collect an hourly wage. There is, as far as I can tell, no level 1.
•Level 4 generally describes a new hire, perhaps a recent graduate with a Bachelor of Arts degree.
•Program managers or product managers are level 5. Senior product managers are level 6 and run one particular product or feature.
•Level 7 employees likely have graduate degrees and are senior managers, with responsibilities to oversee multiple L5s and L6es. Beginning at this level, employees often have to spend a few weeks every few years at a customer service call center or a fulfillment center to get trained in the nitty-gritty tasks of lower employees.
•Directors are level 8. Vice presidents are level 10, while senior vice presidents are level 11 and likely members of one of Amazon’s leadership teams, the S Team or the more newly created “D Team,” which oversees Amazon’s various digital efforts.
•Level 12 is reserved for Jeff Bezos himself.
Conspicuously missing is level 9. No one I talked to seems to know for sure why. Some employees suggest it’s just a quirk of corporate history—an anomaly that developed as the company laid out its top and bottom levels and filled in from there. Others theorize that the absence of Level 9 is symbolic—that Bezos and his early execs eschewed rigid corporate hierarchies and rebelled against the notion of adding senior directors and another layer of bureaucracy.
I like to think it was intentional. If you want to make it more difficult for employees to climb the corporate ladder, removing a rung might make sense.