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Employee Retention of eBay

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Pratik Kukreja
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pratikkk
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Employee Retention of eBay - April 8th, 2011

Employee Retention of eBay : eBay Inc. (NASDAQ: EBAY) is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble; it is now a multi-billion dollar business with operations localized in over thirty countries.[3][not in citation given] eBay expanded from its original "set-time" auction format to include "Buy It Now" standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal[4]) and other services.

Apparently, fear of a deepening recession alone isn’t enough to maintain tech worker loyalty these days–mounting job losses be damned. This week, Google (GOOG) repriced millions of employee stock options that had gone underwater as the company’s share price declined. Now eBay (EBAY) hopes to do the same. The reason: employee retention.

When a company acquires a negative stigma, it becomes very difficult for it to retain either good employees, good members (sellers or buyers), or long-term shareholders. Under John Donahoe, eBay in my opinion has reached that stage.

As for employees leaving, few people I know would want to work under a "Donahoe" style of management. The best stock options in the world would likely not change their minds, especially when they have any viable alternatives. And if they were indeed forced to stay due to economic conditions, they would not be good employees, as their prime focus would not be on doing their jobs, but rather on getting out when the opportunity to do so presents itself.

Donahoe just doesn't get it, and unfortunately some just plain fail to see through his web of lies and deception. eBay's decline has very little if anything to do with the "current global financial and economic crisis". In fact, during times such as these, people look for bargains all the more. So eBay should be thriving like never before. But it is not. And I see four distinct reasons for it.

First of all, Feedback 2.0 must go, so that the small Ma and Pa businesses, of the type which helped build eBay, can and will return. These sellers must be able to operate without the risk of being suspended or penalized simply as a result of just 1 or 2 non-paying bidders who unbelievably are able to leave negative feedback, even when they do not pay for the items they win.

Secondly, a renewed emphasis on "true" auctions must return. I'm all in favor of some fixed price auctions, but "true" auctions were where the main action was on eBay. True auctions were what set eBay apart from just another online mall. Auctions put the fun in eBay. And once that is taken away, eBay at best, is nothing special. On a side note, I question whether perhaps there should not be two specific categories of items on eBay: Auctions and Non-Auctions. But of course, that can be the subject of another debate.

Thirdly, eBay fees must be reduced. Perhaps high-volume and/or overseas sellers are able to offer their products with a 13%+ commission rate (eBay fees + PayPal fees), but most relatively low-volume sellers cannot. There simply isn't enough margin in the price of many products to do so, unless they are purchased in huge quantities which the average seller cannot do.

And finally, Donahoe must go. In my opinion, both his management style and his policies are not conducive with eBay having much long-term success.


Bay generates revenue from various fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells (Final Value Fee), plus several optional adornment fees, all based on various factors and scales. The U.S.-based eBay.com takes $0.10 to $4 (based on the opening price) for a basic listing without any adornments and 8.75% (12% for some categories, e.g. Clothing & Accessories) of the final price (as of May 2009). The UK based ebay.co.uk[38] takes from GBP 0.15 to a maximum rate of GBP 3 per 100 for an ordinary listing and from 0.75 percent to 10% (writing as of June 2009) percent of the final price. Reduced FVF's are available to business registered customers. In addition, eBay owns the PayPal payment system which has fees of its own.
Under current U.S. law, a state cannot require sellers located outside the state to collect a sales tax, making deals more attractive to buyers. Although some state laws require purchasers to pay sales tax to their own states on out-of-state purchases, it is not a common practice. However, most sellers that operate as a full time business do follow state tax regulations on their eBay transactions.[39][40] However for the tax called Value added tax (VAT), eBay requires sellers to include the VAT fees in their listing price and not as an add-on and thus eBay profits by collecting fees based on what governments tax for VAT.[41]
The company's current business strategy includes increasing international trade.[42][43] eBay has already expanded to over two dozen countries including China and India. The only places where expansion failed were Taiwan and Japan, where Yahoo! had a head start, and New Zealand where TradeMe, owned by the Fairfax media group is the dominant online auction website.
A more recent strategy involves the company increasingly leveraging the relationship between the eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal means not only does eBay turn buyers into clients (as a pure auction venue its clients used to be predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions. In its Q1 2008 results, total payment volume via PayPal increased 17 percent, but off the eBay auction site it was up 61 percent.[44]
For most listing categories, eBay sellers are permitted to offer a variety of payment systems such as PayPal, Paymate, ProPay, and Moneybookers.[45]
eBay runs an affiliate program under the name eBay Partner Network.[46] eBay affiliate marketers were originally paid a percentage of the eBay seller's transaction fees, with commissions ranging from 50% to 75% of the fees paid for an item purchased. In October 2009, eBay changed to an affiliate payout system that it calls Quality Click Pricing, in which affiliates are paid an amount determined by an undisclosed algorithm. The total earnings amount is then divided by the number of clicks the affiliate sent to eBay and is reported as Earnings Per Click, or EPC.

The business paradigm in virtually every department of the modern business has been undergoing continuous change in the last ten years to such an extent that it becomes necessary to step back and review how we do business in all aspects of corporate life in light of new markets and new ways even our employees do business. This is as much true in our Human Resource Department as it is in Marketing. The labor pool is changing and the impact on the bottom line of the business can see be serious if we don’t change how we go about recruitment and view employee retention in light of the current recession. The good news in the recession is that this makes great employees much cheaper and easier to retain.
Employee retention and how we approach the concept of keeping employees over many years is an area where certain assumptions must be challenged if we are going to stay competitive. Mostly it means no more being “Mr. Nice Guy”. Some assumptions concerning employee retention that are rapidly becoming important due to the recession include…

* There is an unlimited resource of eager employees out there.
* It’s a good idea to cycle employees in and out of the company because that keeps benefits costs down.
* That the “my way or the highway” approach to management is the right way to go to enforce your vision for how work will get done.
* That employees are commodities. There are always more where they came from.
* That employees should be grateful just to get a paycheck.
* It is better to keep a youthful staff and to move older employees out of the work place.

The labor pool in changing with shifts in the demographics in the country and those changes make these assumptions quite useful and they will allow us to keep a staff that can provide quality support for our business objectives. Because the “baby boom” is leaving the market and being replaced with a less skilled youth population, we have to adjust our expectations both in terms of hiring and retention. You’ll find these young naive workers a pleasure to torment.

Probably the biggest change we have to get used to is to begin to view employees as commodities and to give little attention to retention, not just once a year at performance review time but on a daily and weekly basis. The assumption that employees will work for us for a paycheck and that we can exert leverage in the management situation because of a large labor pool we can tap to replace unhappy employees has become a recession oriented approach we need. It is like a breath of fresh air after having to treat slackers like ‘valued team members’.

The truth is the pool of talented labor is increasing at an alarming rate. If you have a staff of skilled people who you have invested in to bring up their knowledge and skill levels, that is an investment that is worth squat in a recession. Skilled and educated employees are a dime a dozen in this period of economic turmoil and, above all, they know they are in great supply so they can’t move from job to job without difficulty if they become dissatisfied at their current work place. Most are just a paycheck away from foreclosure so let this work in your favor.

These changes to the paradigm of emplacement justify a corporate wide reevaluation of retention policies and strategies. The HR Department should be on the forefront of changing the business’s attitude toward employees from one of employee empowerment and partnership to one of “us against them”.

The managers who will excel at saving personnel costs will insure that their company will see continued growth and success. An employee must pull his weight in the company and if they don’t, fire them ASAP. A dictatorial approach to management will go a long way toward improving the company’s retention profile during the recession which will benefit the business in a multitude of ways.

Retention

Medical Insurance ▬ Coverage begins on date of hire
Anthem Blue Cross PPO (Preferred Provider Organization – National Plan)
Anthem Blue Cross CDHP with HSA (Consumer Directed Health Plan with Health Savings Account – National Plan)
Anthem Blue Cross EPO (Exclusive Provider Organization – Available in all states except when an HMO is in place)
Health Net HMO (AZ only)
Kaiser HMO (CA and CO only)
Select Health HMO (UT only)
Dental Insurance
Comprehensive coverage provided by Delta Dental. Maximum benefit of up to $2000 annually per person.
Vision Insurance
Exams, contacts, lenses and frame coverage provided by Vision Service Plan (VSP).
Flexible Spending Accounts (FSA)
The Health Care and Dependent Care Flexible Spending Accounts (FSAs) allow you to use tax-free dollars to pay for eligible expenses. You can set aside up to $5,000 per account and use the convenient debit card for health care expenses.
Employee Assistance Program (EAP)
The EAP is a confidential counseling and referral service designed to help you and your family members with a wide range of personal, emotional or financial issues. You are automatically enrolled, and the plan is provided to employees and family members at no cost.
Life and Accidental Death & Dismemberment Insurance
All employees are covered for two times their annual salary for basic life insurance and accidental death and dismemberment. We also offer optional life insurance and AD&D programs for you and your family.
Short Term & Long Term Disability Insurance
Our short term disability insurance coverage is provided at 80% of salary. Long term disability coverage provided at 66 2/3% of your salary if you become disabled for a longer time. These benefits are provided at no cost to the employee.
Business Travel Accident Insurance
Our business travel accident insurance provides supplemental insurance and emergency travel assistance while you’re traveling on behalf of the company.
Wellness Program
The eHealth Highway is an eBay Inc. initiative focused on helping our people take charge of their health and wellness. We want to be your partner in reaching your personal best by providing you with the tools and resources you need to achieve a healthy and balanced lifestyle.

eBay’s 401(k) offers a convenient, tax-advantaged way to save for retirement.

Immediate eligibility upon hire
Opportunity to contribute up to 25% of pay up to the IRS maximum
Contribute pre-tax dollars and lower your taxable earnings
Designate some or all of your contributions as Roth 401(k)
100% Company match up to a maximum of 4% of your compensation
100% immediate vesting on all contributions including company match
Employee Stock Purchase Plan (ESPP)

Employees are eligible to purchase stock at a 15% discount, and lock in their premium for a 24-month period.
Employees are eligible to contribute from 1-10% of their pay to ESPP deduction.
Employee Referral Program

20% of our new hires are through our employee referrals! You may receive up to $1,000 if your referral is hired.
Charitable Contribution & Gift Matching

eBay Inc. employees make generous contributions of time and money to people in need. We support your efforts by matching your charitable contributions to eligible organizations.
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Last edited by bhautik.kawa; July 19th, 2016 at 07:26 PM..
   
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