Delivering Happiness – Building a Committed Team through Loyalty 1 Hollie Delaney Human Resources Director Twitter.com/hollied

A little about me… 2 Joined Zappos in years in Human Resources in a variety of industries. Currently oversee the major HR Functions HR RecruitingBenefits Employee Relations PEACEZCONHR Admin

How we built a committed team. 3

Step 1: Defining Our Values 1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and a Little Weirdness 4. Be Adventurous, Creative, and Open-Minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships With Communication 7. Build a Positive Team and Family Spirit 8. Do More with Less 9. Be Passionate and Determined 10. Be Humble 4

Step 2: Committing to our Values RecruitingOnboardingEmployee RelationsHire slowly, fire quickly 5

What are we looking for? Technical fit – Do you have the technical skills to do the job? – Skills & Experience assessments Culture fit – Do you have the same values we do? – Culture assessments 6

Cultural Assessment #1: The Core Values Interview 7 Deliver Wow Through Service: Can you roll the way Zappos does? Be Adventurous, Creative and Open Minded: Do you feel lucky!? Be Fun and a Little Weird: You gotta be, but don’t get crazy… Build a Positive Team and Family Spirit:Workin’ 9 to 5?

Cultural Assessment #2: Shake ‘em up before you sit ‘em down! 8 “A Three Hour Tour” What’s your theme song? New York City or Cher’s dressing room?

Cultural Assessment #4: It never stops! New Hire Training 4 hours vs. 4 weeks Extension of our screening process Pay to Quit 9

Employee Relations: Zappos Style 10 HR is NOT the FINAL SAY We act as true advisors and explain the risk around situations. The manager is free to take or NOT take our advice. Regardless of their decision, we will support them in the execution of that decision.

How do we get away with it? 11 Build relationships with each department Spend part of our time sitting with the teams we support

There through the good and the bad 12 Regular lunches with Managers Sponsored shots at quarterly recognition happy hours Organize team building events Work with Pipeline team to create and teach management development classes

What performance reviews? 13 NO standardized/ scheduled/ homogenized & pasteurized Performance Appraisals

Cultural Assessment 14 Yearly assessment Conducted by manager Based on our Core Values

Please refer to our written policies and procedures…. 15 Collaborate across different departments Solicit employee feedback Build from the ground up

Employee Handbook: Zappos Style! 16

Employee Handbook: Zappos Style! 17

Step 3: Making Culture Everyone’s Job Performance Reviews: 100% based on culture fit. Everyone’s job is to embrace and drive the culture. Took the red tape and turned it into a green light. 18

Step 4: Trust and Transparency 19 Twitter Distribution Lists Create policies around the rule not the exception. Employee Surveys Culture Book OCM Notes Sales Reports Ask Anything Media “Trust men and they will be true to you; treat them greatly, and they will show themselves great.” Ralph Waldo Emerson

Step 5: Creating a Vision Motivation vs. Inspiration Does our vision have meaning? What is the greater purpose for our employees outside of just money and profits? How do we inspire our team instead of just motivating them? 20 Questions we asked ourselves:

Evolution of the Zappos Vision Delivering Happiness Best Place to Work Best Customer Service Best Selection of Shoes 21

Step 6: Infusing culture and fun into our workplace. 22

23 Fun-ctional Work Spaces

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Events 29

P.E.A.C.E. 30 P.E.A.C.E. ProgramsEventsActivitiesCharity Engage- ment

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Programs Core ValueCo-Worker BonusZollar StoreAnniversaryWishez 35

Step 8: Know your Team/Build Relationships Managers spend 10-20% of their time with employees. ZCN ClubsCommitteesTeam BuildingHappy Hours 36

Commitment in Action “What is truer than truth? The story.” Jewish Proverb

Want to learn more? 38 Experience Zappos firsthand with Zappos Insights Request a tour of our Nevada office Get a complimentary Culture Book Sign up for Boot Camp

39 Legal and Financial Disclaimer P.S. You might be wondering why we need to have a legal and financial disclaimer in this presentation, but you are still reading, so our lawyers, auditors and accountants would really like to make sure we make the following clarifications. Although an audit was underway and almost done, the financial information presented in this slide show was unaudited. We made every effort to present the best information we had at the time. Gross merchandise sales is a non-GAAP metric. We use it to express the total demand across all of our web sites and stores. This number measures the dollar value of the orders placed in the year before accruing for certain items such as returns, and it ignores certain timing cut-offs that are required by GAAP for revenue recognition purposes. If we were a public company, we would have to reconcile gross merchandise sales to the nearest GAAP metric (net sales), but we are currently a private company so the gross merchandise sales number should be viewed just as an interesting number that we want to share with our friends. This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by the forward-looking statements and assumptions. These risks and uncertainties include, but are not limited to, the risk of economic slowdown, the risk of over or underbuying, the risk of consumers not shopping online or at our web site at the rate we expected, the risk of supplier shortages, the risk of new or growing competition, the risk of a natural or some other type of disaster affecting our fulfillment operations or web servers, and the risk of the world generally coming to an end. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Zappos.com assumes no obligation and does not intend to update these forward-looking statements. Congratulations on making it through all the fine print. If you enjoy fine print, look for openings on our legal and finance team at jobs.zappos.com.