Amazon has introduced a new appraisal system that formally integrates its 16 Leadership Principles into employee evaluations.
The revamped model, rolled out during the mid-year review cycle of 2025, marks the first time these principles—such as customer obsession, frugality, and inventiveness—will directly influence decisions on salary hikes, promotions, and performance improvement plans.
Under the new system, employees will be assessed across three dimensions:
- Adherence to Leadership Principles
- Performance
- Potential
These factors will be combined to generate an Overall Value (OV) score, which will determine career progression and compensation outcomes.
Stack-Ranking Returns: Fixed Quotas Raise Concerns
Amazon’s updated appraisal process maintains its controversial stack-ranking culture, requiring managers to categorize employees into five performance tiers based on predetermined percentages.
For teams with more than 50 employees, the distribution mandates:
- 20% in the top tier
- 5% designated as “Least Effective”
- Remaining employees spread across intermediate tiers
Only 5% of employees will qualify for the elite “Role Model” rating, reserved for those who exemplify Amazon’s Leadership Principles at the highest level.
While Amazon claims the system will streamline evaluations and ensure consistency, critics argue it could force managers to rank capable employees poorly just to meet quotas, potentially harming morale and fostering a cutthroat work environment.
Amazon CEO Andy Jassy’s Push for Discipline and Cultural Realignment
The overhaul is part of CEO Andy Jassy’s broader strategy to instill greater discipline and operational efficiency across Amazon’s corporate workforce.
Over the past year, Andy has:
- Enforced a full return-to-office mandate
- Flattened management structures
- Revised compensation models to reward top performers
Amazon views the new appraisal system as a continuation of these efforts, reinforcing its performance-driven culture and aligning employee behavior with its core values.
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