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    Highlights—October 28, 2006

  • Boston Globe: The great pension swindle. By Laurence J. Kotlikoff. Excerpts: The federal government, with its own $11 trillion unfunded Social Security liability, has condoned the underfunding of private pensions for decades. It's also encouraged pension funds to invest in risky assets to cover their funding shortfalls. Those gambles generally haven't paid off. And it has sat silent as state and local governments turned pension underfunding into an art form.
    Who's going to take the hit? America's workers and retirees. Over 1 million private pension participants have seen their pension funds go belly-up. Their pension benefits are "guaranteed" by the Pension Benefit Guarantee Corporation (PBGC), a government-established insurance company. But since the corporation limits the amount of benefits it insures, most of these participants have seen or will see tremendous benefit cuts. [...]
    To be sure, most companies with pension plans are solvent and have enough assets to pay the benefits they legally owe. But these legal obligations, technically called accrued liabilities, are much smaller than what they have promised their workers.
    What they've told their workers is, ``We're not paying you what you're producing now. But stick with us, and we'll pay you a lot more than you produce as you approach retirement. We'll do this through our pension benefit formula, which makes your pension accruals rise dramatically with your seniority." Economists refer to such informal arrangements as implicit long-term labor contracts. To improve retention, workers are underpaid when young and overpaid when old.
    About 44 million American workers now participate in pension plans. But these implicit contracts are now being ripped up left and right by the biggest, most profitable companies in the country. Verizon, HP, Motorola, IBM, Sprint, Alcoa, Sears, and Du Pont are among the growing number of Fortune 500 companies that have "frozen" their pension plans. In plain English, they have swindled their workers. [...]
    The companies engaging in this great pension swindle claim they need to remain competitive. But the future accruals they are cutting represent payment not for current or future work, but for past work. The cuts are nothing less than theft.
  • Wall Street Journal: Pension Law Shrinks Lump-Sum Payouts. Changes in Defined-Benefit Plans Affect Many Highly-Paid Workers; Making Do With $200,000 Less. By Theo Francis. Excerpts: The latest pension changes come as defined-benefit plans have come under pressure. Several companies have announced plans to freeze their pensions this year, including Verizon Communications Inc. and International Business Machines Corp., preventing employees from earning new benefits. Meanwhile, many employers increasingly emphasize retirement savings plans, such as 401(k)s, in which employees can save and defer income taxes on some of their pay. Many employers contribute to these accounts as well.
    The pension law made two changes that effectively reduce payouts when a retiree takes his pension as a lump sum. Companies calculate this by taking the monthly payment the retiree is entitled to and then figuring how much this is worth as a lump sum in today's dollars, making certain assumptions about life spans and future investment returns.
  • Yahoo! IBM retiree message board post: Disappointed in IBM - what a way to treat a retiree. By Chet Volpe. Full excerpt: Well, I got my Annual Medical 2007 Enrollment Information on Friday (10/20/2006) and what a shock… my contribution went up by $350 for my wife and me. I was shocked; I called Mr. Palmisano and left a message. I feel completely betrayed. This, plus the $150 increase of the past years is now $500 out of pocket each month. This is no way to retire. I can't handle an unexpected $500 per month… time to go back to work. So much for retirement, so much for a career supporting IBM, so much for relying on a company and the promises made for 30+ years…now I am being charged for poor decisions and poor management by executives making millions each year. I think that the executives have lost the road map that shows them just how they got there – by the labor and dedication of the IBM Retirees to whom they are passing along the cost of their decisions. So much for trust…
  • Yahoo! IBM retiree message board post by "retired_in_89". Full excerpt: A check shows that on my August 1, 2003 Pension Plan statement the following was included...
    "If you are enrolled in IBM health benefits coverage and you have authorized the deduction of your health care premiums from your pension benefit, please note the following: Each month, your health care premiums are compared against your pension benefit amount. If your pension amount does not cover the cost of those premiums, an invoice will be generated and mailed to your address of record."
    The above was included on the statements through Dec, 2003 except that it was left off of the Nov. 2003 statement.
    Starting with the March 1, 2004 statement, and still included to this day, under 'Deduction Abbreviations" the following is printed:
    • MEDL1 - Monthly Health Care premium
    • MDAR1 - Health Care Arrears Deduction - used to recover any balance owed as the result of an adjustment to your premiums.
    Obviously, one of the few areas that the New IBM is really efficient in is in collecting health care premiums from its retirees.
  • Yahoo! IBM retiree message board post by "i_be_mad_as_heck". Full excerpt: How many people retiring prior to the early 90's ever imagined that instead of receiving a pension check and medical benefits for life, they would be sending in a monthly check for medical coverage that their pension check is insufficient to cover?
  • Yahoo! IBM retiree message board post by "rdb104". Full excerpt: I'm tempted to take the high deductible and take my chances. This is ridiculous. They are saying that it cost $19,000, with IBM's contribution, to cover 2 people. Bull...
  • Yahoo! IBM pension message board post by Lawrence Wiedemann. Full excerpt: Got my package on Sat. For my wife and I, non-medicare, the premiums are up another 38% over last year and 121% since 2005. They really sock it to you if you have a spouse or any dependents.
    It is amazing when you read articles on health care that say that premiums in general should rise about 7-12% for 2007.
    "Premiums paid by employers grew 7.7 percent in 2006 on average, according to a survey of 3,159 public and private firms by the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust, a health research group in Menlo Park. Last year, premiums rose 9.2 percent."
  • Yahoo! IBM pension message board post: "This cannot be right". By "benson2835". Full excerpt: I took the buyout last year and transition medical ends in December. I just now find out that I will have to pay $923 a month for me, my wife and son. This is ridiculous. How can they get away with charging this much for a medical insurance?
    • Kathi Cooper replies. Full excerpt: They get away with it because there is nothing to stop them. Lots of us want a union so we can have a contract to protect our medical and pension, but others think a union is next to sin at IBM. Lots of us think we should sue, but IBM has done nothing against the law, because there are no laws to protect us. And, lots of us write our Senators and Congress Persons and complain bitterly to them, promising we will vote them out of office unless they give us legislation to protect us.
    • Richard Ferman comments. Full excerpt: Benson, That's cheap. Be happy. I pay $1535/month for me and the wife. Luckily no kids. Blue Cross and Blue Shield was the CHEAPEST one I could find. Wait till the others retire.
  • Yahoo! IBM retiree message board post by Janet Krueger. Full excerpt: In addition to asking Randy McDonald to THINK again about the justice of rapidly increasing retiree co-pays for insurance, please also consider asking the federal government for assistance. There are two paths to consider:
    1. Lobby for federal protection of medical promises to retirees. Join a group that has been working on this issue for several years now: http://www.nrln.org/
    2. Lobby for some form of universal health care coverage, thus taking corporations out of the health care loop and providing benefits for *ALL* Americans, not just those who have been fortunate enough to work for a company that made life-time health care promises. A group that has been working on this issue is http://www.uhcan.org/.
    For either option to work successfully, many of those currently representing us in DC need to be either sent home or given a new mission -- THINK hard before you vote in November, and make sure you understand the stands those asking for your vote have taken in the past and will take in the future on health care issues. We don't have the option of voting Randy McDonald out of office, but do not lose sight of the fact that there are elected officials who could be and should be helping!
  • In a Yahoo! message board post, Janet Krueger responds to the following comment: I am as unhappy as everyone else about the fact that I have to pay for medical benefits....but as much as I hate the expression, it is what it is. . . . Therefore, I assume that IBM is paying the difference or $4200 a year. Of course, there are other providers but that's a rough number. Now that's certainly not $7000 a year as we were all told years ago..but it also is not zero. So, as we all gripe about what should have been, keep in mind that it could be worse.
    Ms. Krueger's full response: The math isn't quite as clear as you are making out; while your comparison implies IBM is spending $4200 on your behalf, that leaves out the huge financial incentive that was put in with the Medicare Part D legislation to incent companies to continue providing retiree benefits; no one knows how much of that $4200 IBM gets back in a kick-back from the federal government, but it is a lot more than the piece they are sharing!
    The writing on the wall is relatively clear; it WILL get worse as time goes on. Each year, IBM pays less and the retirees pay more. At the end of the road, IBM will back out of paying anything at all, particularly since they are not required to by law.
    In my mind, retirees have several alternatives:
    1. Console yourselves because it IS worse for many others, remind yourselves that IBM is still doing something, then go back to sleep. Sooner or later, we'll all be dead anyway.
    2. Become a political activist. Let the people you vote into Congress know they need to do something about the national health care crisis, and vote out any incumbents that haven't done anything to address the situation. If enough of you vote for change, change will come -- this IS still a democracy! While the election rhetoric gets tiresome, there is no better time to make yourselves heard than during an election season! There are two directions your political activism can take; some are working on both in parallel:
      • Work to force corporations to honor their long term promises to retirees. A political group dedicated to this can be found at www.nrln.org. Check out their legislative agenda, and if you agree with it, work to make it happen!
      • Work towards some level of national health care that makes affordable health care coverage available to all Americans, regardless of whether they worked for an ethical corporation or whether they've turned 65. One political group dedicated to this can be found at www.uhcan.org -- many others can be found through google. While we might not all agree on the right solution for national health care coverage, it should be more and more obvious that the current system is broken and is doing more to enrich the health insurance companies and executives than anything else...
    Just a suggestion -- I've looked at all the candidates in my area, and am actively supporting the ones who have promised to change things in Washington...
  • InformationWeek: U.S. Tech Workers Share Their Outsourcing Pain. By By Paul McDougall. Excerpts: Here is an example of one thing that happened here in Rochester at IBM. There were 2 people from India brought in and people in our department were told to train them in case a plan had to be put in place to handle any surplus work we may get. There was not enough work for our area and 2 of the designers got laid off. There were also rumors that a sizeable project was sent to India, which would have kept our area busy for some time. Also, about 5-6 weeks after the first 2 from India arrived, 2 came for training.
    Now, if there is not enough work in Rochester, why in the hell do we need a backup plan in India?
    I am a retiree and working as a contractor at the time. It doesn't seem like IBM is too truthful with their employees about training their replacements. On another note, the ones getting laid off have somewhere between 25 to 38 years of service, with all being around 50 years old or older. Glad to say I am not there anymore. One year back as a contractor was about all I could handle. It's not fun working in such a negative atmosphere.
    I am TREMENDOUSLY concerned about offshoring. I am a PARTIAL victim of it, as ALL americans are, whether they know it or not. In my case, I was an IBM CE for 28 years, until IBM decided to sell me to Qualxserv.
    Most offshoring is a result, in part, of the same thinking. Nominally, they just want to take advantage of the lower cost of living for overseas workers, to perform tasks that don't require local action. When shipping costs and import costs plummeted under Republican leadership (with Democratic support) through the eighties and nineties, it became feasible to have everything manufactured overseas by underpaid, and often under age workers. Since Congress actively worked to adjust international commerce regulations, and corporate tax laws, to ENCOURAGE this, it became imperative for ALL American companies to offshore everything.
    The worst thing for all American workers, is that this was done in a huge rush, clumsily, and without much thought or planning. IBM is classic in this...they did such a thoughtless job of outsourcing, downsizing, and offshoring, they are unable to deliver on any of the promises they made to their customers. Their customers start leaving, so they downsize more, or sell the business division.
    The thing that all of us need to recognize, is that we are essentially dominoes. When the job next to you gets outsourced, you aren't lucky, you're NEXT.
    I previously worked for IBM for 8 years as a cooperative education student while I attended college part time. IBM is working to get rid of their U.S. employees, especially the highly paid, over 40, and sick.
    How has it affected my job performance? I used to be an excellent worker with excellent communication skills. I got a 6% raise before a new manager came in and all of a sudden, I had a communication problem. My new manager took away almost everything that I was doing so that I wouldn't have any accomplishments for the year. I am a very hard worker and very honest and dedicated employee, so I worked hard to try to prove myself, but no matter what I did, I couldn't improve even though my manager said I improved.
    Watson would roll over in his grave if he saw what these managers are doing to people. At least I know what goes around comes around. You would think that these managers would realize that it is only a matter of time before their jobs are also outsourced, too. There is no job security at IBM anymore.
    Any more tales of outsourcing woe out there? Send them to me at Paulmcd@cmp.com.
  • Washington Post: Delta Can Cut Retiree Benefits by $50M. By Vinnee Tong. Excerpts: A federal bankruptcy judge on Thursday approved a plan by Delta Air Lines Inc. to cut $50 million a year in health benefits for about 42,000 retirees, spouses and survivors. The country's third-largest carrier, which is operating under Chapter 11 bankruptcy protection, reached agreements with retiree representatives on Oct. 5 that affect retired pilots, ground crew workers and flight attendants. The cuts would be effective Jan. 1. [...]
    Some non-pilot retirees, who currently do not pay any health insurance premiums before age 65, would start out paying $115 a month, with payments rising over the next few years to 22 percent of the full cost of coverage until they turn 65. Other retirees would pay an increasing amount, up to 25 percent or 35 percent of the total cost.
  • San Diego Union-Tribune: What's the cost of your 401(k)? Here's a hint: It's not free. By Lynn O'Shaughnessy. Excerpts: It's understandable that people never ask about 401(k) costs, but what's inexcusable are the thousands of employers who are just as complacent. In fact, even the most well-intentioned companies don't necessarily know the cost of their employees' retirement plans. [...]
    What's alarming about corporate ignorance and/or indifference is this: With increasing numbers of companies shamefully ditching their pension plans, the 401(k) has become a financial firewall for many workers. If the firewall doesn't hold, millions of employees could be forced to work far into their retirement years, or live on peanut butter crackers.
    And unfortunately, workers can't go out and find a better 401(k) if the investment choices in their corporate plan stink. They can only hope that their superiors will select top-notch mutual funds with low costs for their retirement plans.
    But here's where things get really perverse. Companies are often far more motivated to sign off on plans that offer mutual funds or annuities with bloated fees that employees must shoulder. Why? Because these expensive investment choices generate so much excess cash for the outside firms overseeing these 401(k) plans that workplaces have to kick in little or no money for the administration.
    When companies are told they can pay for a variety of 401(k) costs or leave it to their employees, they tend to choose the latter without asking many questions. [...]
    What potential transgressions have attracted the interest of prosecutors and trial lawyers? A common 401(k) industry practice called revenue sharing is what's drawing fire. If you have a weird lineup of expensive and mediocre mutual funds in your 401(k), the culprit could be revenue sharing.
    To understand what revenue sharing is, you have to appreciate how 401(k) plans are put together. Some guy in your human resources department didn't dream up your 401(k) menu. Nor does anybody in your company manage the plan. What typically happens is that a company selects a vendor to pull together a plan and then maintain it. The outside administrators include many of the nation's most recognizable mutual fund companies and brokerage firms, along with major insurance companies.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • U.S. Representative Pete Stark (D-CA): Stark Statement Introducing the Medicare Early Access Act of 2005. Excerpts: Today, during Cover the Uninsured Week, I am pleased to introduce a bill to help nearly four million people age 55-65 obtain access to affordable health insurance. I am joined by my colleague Rep. Sherrod Brown and more than 90 additional Democratic cosponsors in introducing the “Medicare Early Access Act,” one of three signature bills that offer attainable, common sense solutions for the uninsured.
    We have 45 million Americans without health insurance – 8 million of whom are children. Millions more are underinsured with paltry policies that exclude necessary benefits or charge a king’s ransom for co-pays and deductibles. Increasingly, access to coverage and quality care in this country is determined by an ability to pay rather than medical need.
    There are many approaches to addressing the needs of the growing population without health coverage in this country. As most of my colleagues know, I am an advocate of a universal health care system in which each and every American would have health coverage. That is the most fair, affordable, and sustainable solution to our national health care needs. [...]
    The Medicare Early Access Act targets early retirees; the Family Care Act, being introduced by Rep. Dingell, targets children and families; and the Small Business Health Insurance Promotion Act, being introduced by Rep. Barrow, targets small businesses and self-employed individuals. The Medicare Early Access act would provide people age 55 to 65 with the option of buying into Medicare.
  • Physicians for a National Health Insurance: The unraveling of private insurance. By Leonard Rodberg. Excerpts: Americans spend more on health care than anyone else on earth. We are first in spending, but, according to recent surveys, 14th in public satisfaction with our health system. Per person, our government spending alone is more than government plus private spending on health care in any other country. And yet our health statistics are comparatively poor, with life expectancy 24th in the world, infant mortality 27th, and more than 45 million people without any health insurance at all. So why does the US spend so much and get so little in return? Because of one simple fact: we are alone in the world in relying on private insurance to fund health care. [...]
    With the employer-based system leaving increasing numbers of Americans without health coverage, some people propose requiring that individuals purchase insurance to solve the problem. The State of Massachusetts recently passed legislation to create an “affordable” insurance plan and require everyone without other insurance to purchase such a policy. The American Medical Association supports such an individual mandate, and other states are considering the idea.
    What’s wrong with it? After all, anyone owning a car is required to have car insurance. The simple answer is that most people who don’t have health insurance today could not afford to buy a policy that would really give them adequate coverage. Today, the average policy for an individual costs more than $4,000 per year and, for a family, over $10,000 each year. Clearly someone earning the minimum wage ($10,000 per year for fulltime work) could not afford to purchase health insurance for her or his family.
    While the Massachusetts plan envisions state subsidies that might lower the price for some people, these will be too limited to assure access to quality care. In the end, residents of Massachusetts will be required to spend a lot of money in exchange for very poor coverage.
    Nor is an individual mandate the solution from the point of view of the nation’s health system. As one wag put it, “If GM can’t keep down the cost of health care, how can we expect Mom and Dad to do it?” Employers have a lot more bargaining power than individual consumers, and they can’t keep a lid on costs. Ultimately, it is not employer-based insurance that is failing, but the inefficient and increasingly unaffordable private, for-profit health insurance system.
New on the Alliance@IBM Site:
  • AFL-CIO: Dow’s Up. Everyone Must Be Happy, Right? By Tula Connell. Excerpts: Political pundits are puzzled, puzzled that what they falsely call a good U.S. economy is not translating into votes for Republican candidates. With the Dow Jones stock index over 12,000, why aren’t voters happy? Gas prices have temporarily blipped downward. Why aren’t Republican office holders getting credit?
    We’ll skip a discussion of the Dow, which last year was packed with better performing stocks and so is artificially skewed (never mind that it represents only 30 stocks anyway). And with OPEC recently voting to tighten the oil supply, it’s only a matter of time before gas prices jump again. The real point is that the rise or fall of 30 stocks on the Dow doesn’t affect the economic well-being of working families. The Dow’s increases benefit the investor class, not the working class.
    What counts for the 99 percent of working people who didn’t get a massive tax cut for the wealthy from the Bush administration—and who barely have enough money to get by, let alone invest in the stock market—are family-supporting jobs, affordable health care and secure retirement. And by that measure, the Bush administration’s policies have been a total failure.
  • From the Job Cuts Status & Comments page
    • Comments 10/22/06: I was at a party last night talking to a young engineer who still works at IBM. (I am now a male RN, having given up on engineering.) When he was asked as a member of one of IBM's 'retention' committees how IBM could retain engineers, he stated 'Stop firing their dads!' Needless to say, the advice wasn't heeded. -Ex-Beamer-
    • Comments 10/23/06: A team of employees walked out together in Armonk. They surrendered their badges at the same time for better opportunity. They all moved to jobs in NYC. Why? Their area is being sent to Brazil. They left before being handed the pink slip. Guess what? They are making far more at Citibank than at IBM. IBM wants you all to leave. Why? Their aim is to cut employment in USA from 130,000 to 70,000 by 2007 end. -The Writing Is On The Wall-
    • Comments 10/26/06: Can anyone provide information/details on the difference between the regular RA and one that is because of an outsourced job? I know it's a 60 day notice but is there a difference in the severance?-Anonymous-
    • Comments 10/27/06: Re: Diff between regular and outsourced packages: I am in the STG job cut, due to outsourcing. I got 60 days notice. My package seems to be the same - it had a write-in spot for manager to write in the last date of employment - I suspect so the same huge pile of paper could be used for either outsourced or non-outsourced layoffs. I've been at IBM 16 years, and am getting severance of 1/2-years pay (that's the cap, I should get 32 weeks pay, but it is capped at 26). -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 10/22/06: How much more does Sam, Randy, and the rest of the IBM fat cat executives have to pay for/into their health benefits for 2007? We will never know since they say "..we don't have have the right to know..", "..we don't have to make this known..", and "..besides, it doesn't apply to us so why do you ask?". I bet not as much (maybe little, if any) as we IBM employees and IBM retirees have to now!!! -Anonymous-
    • Comment 10/22/06: IBM supposedly had a great 3rd quarter. If that is truly so let's hope the 3rd QTR scorecard results for the business units reflect that most or all at least met expectations and target. If not, then the bar has been raised or is being raised (arbitrarily with moving metrics perhaps?) too aggressively which means it is rigged to further lower potential for employee bonus or "variable pittance plan". -Anonymous-
    • Comment 10/23/06: My medical for 2007 has gone from $520 to $667..These corrupt CEO's (Gerstner,Palmisano) will be living free of any medical cost and receiving millions(more than a Billion) now he's at the Carlisle Group helping with the one world Government. IBMers unite and call the CEO and Randy Mcdonald. Get these idiots who are taking down IBM fired and thrown in Jail for Corporate Theft of our benefits and anything else they can get them for. There needs to be an investigation into this Company and Gerstner and Palmisano!! I am so fed up with IBM's lowlife Management! -Anonymous-
    • Comment 10/26/06: Robert LeBlanc (General Manager SWG) made a comment in an all-managers meeting that the software industry is competitive (duh) and if your looking for 9-5 and work-life balance to go to McDonalds. I'm only working maybe like 10-4 so I guess I'm OK. -screwedbyIBM-
    • Comment 10/26/06: LeBlanc is apparently out of the HR-jargon loop; he must not have gotten the "work smarter" memo. At least that's the standard answer around here, whenever another person is laid off and the remaining people are expected to simply absorb their work. -smartEnoughToLeave-
    • Comment 10/27/06: I am an IBM retiree with some very expensive medical options offered to me. However I noticed that the "IBM Medical Supplement" has zero cost. Adding prescription drug coverage bumps it up to big numbers very quickly -- to outrageous levels if you have dependents. I treat the IBM Medical supplement as catastrophe coverage and get the rest from Medicare. I do pay IBM for dental and vision coverage. This means I have to work my way through the Medicare Part D maze looking for a bargain, but I'm saving/earning thousands of dollars per year. By the way -- AARP has a website that is very helpful with this. -Anonymous-
  • Pension Comments page
    • Comment 10/24/06: If retired IBM employees must use most of their IBM pensions to pay for the "free" IBM retirement medical benefits...then iBM has found a rather sneaky way of stealing your pension money! I recall how IBM pointed to the iBM retirement plan and medical as part of our "total compensation", justifying the ever smaller raises.. Does this mean that IBM has stole pay from us? It was in writing and every manager told us so..To sue or not..that is the question? -Anonymous-
  • IBM employees on employee raises

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A sample post follows:
  • "Managing expectations" by "Dose of reality". Full excerpt: I have to tell you, for someone coming in at band 10, in HCM of all practices, you are pretty naive. Your comment: "the folks who gave me their insight have NO motivation to paint an inaccurate picture since I don't work at the Blue, yet"
    When a company is built on deceit and employee exploitation/perception arbitrage like IBM is, its representatives are rarely able to selectively turn off the spin machine. The lie becomes the truth, as they have to constantly live it and support it in order to be accepted and progress upward internally. This phenomenon is strengthened even more by the self-selection process, as those that are susceptible to rationalization, suppression of conscience, and in some cases overt, self-serving exploitation become the raw material that comprises the management ranks on a long term basis.
    Also, if a candidate such as yourself inquires about the culture, there will be an inclination to spin it positively, as it is in their own self interest to recruit competent staff, especially in the face of our current self-inflicted recruiting challenges.
    As to your attempt to write this off as "....they claimed it was not an ideal world, there are things to fix, like in every company", as if to say it's like this everywhere so no company is any worse than any other, is nothing short of rationalization. There are most certainly degrees of good and bad across companies.
    Of course there is always a dynamic where a company will try to tip the scales in its favor with its management of the employee relationship. However, good companies recognize that:
    • Long term company perception within its ranks and within the job market trumps short term cost savings, especially in a professional services business. We make absolutely no substantive attempt to foster employee goodwill - most companies do. We look on HCM as a game of how to get something more for nothing.
    • Recognition of above average to excellent employees has to be real and fair in order for its human capital to produce at a level that will make the company competitive, and this has to be throughout the organization. Here, we only reward the band D and above, and many times it is not commensurate with their real contribution to results, but rather it is based on achievement of metrics that are gamed to be easy, or in some cases on the backs of another executive in the organization.
    If you are coming in at band 10, and are politically astute and like to play offense, you should be able to do OK. Most band 10s rely on their ability to find a band 9 or two to blame when things don't go well. I hope for your sake that you like to play that game.
    Contrary to what you have stated, there are companies that understand how to manage Human Resources for long term success. GE comes to mind, but they are not alone.
    Perhaps your philosophy of "let's race our competition to the bottom of the employee exploitation barrel, because every company does it, and candidates will have no choice but to come to work for a company that screws its employees" is the new HR Zeitgeist. It certainly is working in the case of your candidacy. Whatever happened to "Physician heal thyself"? Or are you more technical than functional?
    We rely on a combination of ignorance and low expectations to keep the employee pipeline flowing. I can help with the former, but there is not much that anyone can do to help you with the latter.
  • "Well...well" by "brownfranc". Full excerpt: I always find it interesting when someone is painting a rosy picture of BCS. Now, I have been with BCS for many years, and I can assure you that it was a personal sacrifice to be part of the blue pig. They talk a lot about innovation but they should start innovating the way they treat their human capital. Rewarding Mediocrity has become a science at BCS. I have met very few talented partners. I am so glad I am out. I would love to share crazy stories but the market will soon uncover the true nature of BCS. Be honest!
  • "A Different View" by "ancientblueconsultant". Full excerpt: Most employees and ex-employees see only a portion of IBM. In addition, most individuals believe that if an employer is a poor one that has terrible working conditions and practices this will translate to a bad financial performance. Unfortunately, this is quite the opposite case. The Blue Pig, taking advantage of youth still blinded by its old brand image, takes advantage of them through less than optimal compensation, run of the mill or below par benefits, etc. to make more money than the average corporation.
    The services business, although allegedly important, is really a front for the software and hardware business. That's where the money always has been and always will be in the pig. Services is a front to bring sales in to the door. Outsourcing is a way to optimize the use of pig software and hardware and leverage against non-IBM resources.
    Don't be surprised if the company moves to brand oriented services supporting their product sales and a smaller "though leader" component to take opportunities of leveraged pricing with OEM equipment/software. Think of Armonk as the money "Cookie Monster" eating everything in its way, especially piglets. They are fooled with the fine print then cast off when not needed. Not a pleasant crowd up there.
  • "Candid Feedback" by "KewlSimba". Full excerpt: Team on this board, when I said the management was saying good things, I meant to say ....they claimed it was not an ideal world, there are things to fix, like in every company. They were encouraging to come on board. BCS - Human Capital Management. I was looking at this board, and yes, most of the posts I read scare the hell out of me to be honest with you.
    Everyone on this post has genuine comments. Of course, I have to agree they come from the heart. What leaves me confused is, what choice to make. The band I am being asked to come is a 10. And I have to take back my "reeks of acidity" comment. Probably sounds more caustic, but one hour of review of the board left me scared of IBM.
  • "Why would you trust them over this board?" by "civilliberty". Full excerpt: People here can comment anyway they like - positive, negative, without getting found out. I know people at IBM who have nothing but positive things to say about off-shoring - to say otherwise would be career and job suicide. Those that do say something are usually those that are either making their exit or are more than happy when the hammer falls on them and go on to better onshore opportunities.
  • "You should be scared" by "jb40967". Full excerpt: It's true that this board sometimes goes over the edge but majority of the things you read here are true. The first thing I wanted to ask was what level were the people that gave you the "good impression" about IBM. If they are partners, you should take it with a grain of salt. Partners at IBM don't have much influence in how the BCS practice is managed.
    Second, to help you with your decision, maybe you should ask if you can speak to a fellow band 10 within BCS. Find out how long he/she's been there. I would bet that the person's a recent hire as well.
    The ranks of Band 9-10 within BCS has been decimated over the past few years. I left as a Band 9 this year. In a 5-year project that I worked at, 4 out of the 5 Band 9s that ran the project left. The only one that's still there is still a Band 9 after more that five years. In my last project, they had to bring in someone off the street to replace me.
    The reasons why people leave are obvious -- better jobs/life elsewhere, not much possibility for further advancement when you reach 9 or 10. Basically, there's no carrot on the end of the stick. If all that's okay with you then, welcome to BCS!
  • "A really useful answer...really!" by "Dose of reality". Full excerpt: OK, in increasing order of pain:
    Level 1 – You were just hired and you have a nervous anticipation about what the job will really be like, but you are looking forward to collecting your first paycheck. You had a few challenges with the recruiting process, and have some issues with its administration, but you are willing to overlook it, because “you will never have to deal with them again”. After all, why would anyone believe that the competency, culture and attitude of the recruiting department will in any way be an indication about the similar qualities of the rest of the HR function?!
    Level 2 – You have been here for a month or so, and have yet to be put on your first project. You spend half of your days on administrative work, and the other half surfing the internet. You were approached about a project role that had nothing to do with your background, was halfway across the country, and involved work that a monkey could do. You dismissed that, since there is no way they would put an esteemed recruit like you on monkey work right?!
    Level 3 – You just finished your first month on the monkey role project, have to fly out on a Sunday afternoon with two stopovers, are staying at a 1970s vintage Holiday Inn, and are skipping meals to stay within your per diem. You are working 55 hours a week and only billing 40, even though the policy says otherwise. Your project manager doesn’t give you much direction, but that must be because you are so talented, capable, and are doing a terrific job. No one has said otherwise, so it must be true right?
    Level 4 – You have been on the project for a year, have graduated to scheduling meetings, and have even been allowed to speak during workshops. Your project is 3 months behind schedule, and you are now working 70 hours a week, and still billing 40. That’s OK, since you have foregone all of your vacation and are just on the cusp of the 90% utilization required to get a “1” rating, or so you think. With such an impressive track record of work effort, worklife sacrifice, and no negative comments at all from your project manager, you must be on a path to great financial reward and an imminent promotion. While you are hating every day at work, you feel like you are paying dues that will pay off in a big way later on. All those other veterans around you that complain about their situation just aren’t in your class, and really have no reason not to feel positive.
    Level 5 – You just received your annual performance evaluation and were rated a “2”, along with 70% of the rest of your practice. You are a little disappointed, but how bad could that be? Two months later you receive your salary increase and bonus for the year and they are 2% each. You are told that they would have been 6% and 12%, if only BCS had met its profit targets. You asked what they were, and were told, “we can’t disclose that”, and “just wait ‘til next year. You are pretty upset, but just figure this is just the way it is. After all, this is IBM, and they must know what they are doing right?!
    Level 6 – Next year comes and it is a repeat of your first year, except you are asked to do even more. Despite that, you receive the same raise and bonus. You now start every day by surfing the BCS site on Vault.com, and hear a lot of stories about how others are upset about their treatment at IBM, and still others that left IBM for 40% raises and a supportive and rewarding culture. This is the highest pain level that you can achieve.
    Level 0 – You put your resume out in the market, get three offers at reputable companies for 20 – 30% more than you are currently making. This time, you do the right research, choose the right one, and live happily ever after.
    My question to you is why don’t you just start at level 0 and save yourself a lot of aggravation?!
  • "Start Dates - push back" by "ddellilo". Full excerpt: As IBM enters the 4th quarter, they are trying to keep expenses down by playing with start dates. Here is a quote from an e-mail received today, "New hires for 4Q should start by Nov. 15th and be immediately billable. Any starts planned for after Nov. 15th that would not be immediately billable should be deferred until 2007." Basically, if they have a project lined up for you to work on, you should start right away. If there is nothing, you will be deferred until January 2007.
  • "Said another way..." by "Dose of reality". Full excerpt: Screw you! We can get a warm body any day of the year. If we lose strong candidates due to this soft freeze, we don't give a damn. It is a simple numbers game, beat our meager minimum recruiting standards, and you will get the same consideration, whether you are a summa cum laude with a fat Rolodex, or a borderline candidate. What does that tell you about the caliber of people we hire, the HR culture, and your chances for career success and financial reward?!
  • "No Problem" by "Wok N Off". Full excerpt: Posting here is, well, therapeutic! I do believe it is important for those who know how it really is around here to post in the interest of fair disclosure for the newbies. You may recall I posted a detailed "day in the life" in the context of our travel policy a couple of months ago.
    Unfortunately, the 70 hour weeks, billable at 40 of course, have kept me very busy filling the pockets of bozos reaping my hard earned sweat.
    I remember reading somewhere that you have to look at those above you in title and ask, "Do you want to become like them"? In the time I have been here, I haven't seen anyone I admire or would like to become at levels above me. Perhaps the lack of inner moral fortitude has been the greatest disappointment.
    For those with a strand of doubt after reading eloquent postings from several insiders and still desire to work here, perhaps they deserve what they get. I only wish I had done so before I joined.


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