By Samannay Biswas
In a bold restructuring of its corporate culture, Amazon has introduced a new employee evaluation system that blends its 16 Leadership Principles with performance and potential ratings to determine promotions and salary hikes. This significant change, implemented in the mid-year review cycle of 2025, directly impacts the pay structure and career growth trajectory of tens of thousands of its global workforce. Under the new model, employees will be assessed on three criteria鈥擫eadership Principles adherence, performance, and potential鈥攚hich together produce an Overall Value (OV) score. This score will dictate whether an employee qualifies for a salary increase or risks being placed on a performance improvement plan. Only five per cent of staff will qualify as 鈥渞ole models,鈥 the highest recognition tier. The shift is part of CEO Andy Jassy鈥檚 broader push for operational discipline and cultural realignment. Over the past year, Jassy has enforced a full return-to-office mandate, cut back on corporate hierarchy, and recalibrated pay structures to reward what he defines as 鈥渢op performers.鈥 According to Amazon spokesperson Sam Stephenson, these appraisal reforms are intended to 鈥渟treamline the process for managers and ensure greater consistency.鈥 However, Amazon鈥檚 continued use of stack-ranking鈥攚here managers are required to sort staff into pre-set performance brackets鈥攔emains controversial. In teams of more than 50, at least 20 per cent must be rated top-tier, while five per cent are placed in the lowest 鈥淟east Effective鈥 band. Critics argue the system could compel managers to rank competent employees poorly simply to meet quotas, fostering a toxic and competitive work environment. Internal documents obtained by Business Insider show that Leadership Principles鈥攑reviously viewed as guiding ideals鈥攁re now instrumental in performance assessments, influencing not just promotions but also demotions or exits. These principles include commitments to customer obsession, frugality, inventiveness, and long-term thinking. While the move aligns with industry-wide trends, with firms like Google, Meta, and Microsoft also tightening performance policies this year amid cost pressures and AI-driven restructuring, Amazon鈥檚 implementation stands out for its rigid quotas and formal codification of value-based metrics. Despite pushback from some quarters, Amazon insists the changes are meant to nurture employee development. 鈥淲e regularly review our processes to support employee growth while ensuring we maintain high standards of performance,鈥 said the company in an official statement. As Amazon sharpens its internal systems in pursuit of leaner and more efficient operations, the success of this approach will likely hinge on whether it motivates excellence or discourages innovation among employees facing heightened scrutiny. Get Latest News live on Times Now along with Breaking News and Top Headlines from Business, Companies and around the world.