Amazon has officially embedded its 16 Leadership Principles into employee performance review system, making it stricter for those aiming to grow within the company

These 16 Leadership Principles (LPs) including, customer obsession, frugality, and bias for action, are core to Amazon’s internal culture, as reported by Business Insider (BI). 

Under the new performance appraisal system, Amazon managers will use a three-tiered scale i.e. these 16 LPs alongside traditional performance and potential metrics, to assess how effectively employees demonstrate these growth principals.

All employees will receive an Overall Value (OV) score based on this scale, which will determine their salary increments, promotions, or whether they need to be placed on a Performance Improvement Plan (PIP).

Under the new appraisal system, Only 5% of Amazon’s employees will be eligible for the top rating i.e. “role model”, demonstrating these 16 LPs. 

Along with this metric, the rating system for “performance” and “potential”, have been aligned offering better clarity and uniformity in the evaluation process. 

BI’s report on Amazon’s internal guidelines also stated that, “the process is intended to “improve our ability to identify top talent and further strengthen our culture,” 

Amazon’s new employee performance appraisal guidelines are part of CEO Andy Jassy’s strategic push for a “more disciplined and cohesive workforce”,

Similar to what Jassy did last year with a strict return-to-office mandate, reduced management layers, and a revamped reward and recognition model for high performers.. 

Jassy had emphasised that he values Amazon’s unique culture, which is rooted in its Leadership Principles, and drives innovation and customer value.

However, the new performance appraisal model has drawn criticism from Amazon’s employees, who see it as “predatory and opaque,” for its limited oversight, misinterpretation of the LPs, and potential misuse by managers. 

This model, which categorizes Amazon employees into five performance tiers and sets fixed percentages for each, has raised concerns about fostering a cut-throat, stack-ranking culture—a controversial HR practice common in the global tech industry.

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Is the new performance appraisal model aimed only at retaining ‘culture-fit’ employees? It’s certainly a topic of discussion, especially as the move follows years of workforce reductions, with over 25,000 layoffs since 2022.

CEO Jassy has recently warned that more jobs will be cut as AI takes over rote work, citing examples of AI agents handling coding, analytics, and research tasks at Amazon.