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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
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
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
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
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
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:
- 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/
- 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:
- 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.
- 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
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
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
- 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
- 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
- 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
- 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
|Vault Message Board Posts
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
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!
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.
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
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.
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.
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!
really useful answer...really!" by "Dose of reality". Full excerpt: OK, in increasing order
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
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
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.
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?!
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.