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Highlights—March 31, 2007
- SmartMoney: The New Retirement.
Let's Make a (Bad) Deal. By Peter Keating. Excerpts: Talk to people who are financially secure in retirement
and you'll find that many of them have two things in common. One is a well-defined plan. The other is a pension.
Unfortunately, many American companies are taking a whack at both the pensions and the plans of their employees by
converting retirement benefits into schemes known as "cash-balance plans." And Congress and the Supreme
Court are letting them get away with this audacious maneuver.
A traditional pension is based on your years of service to your employer and your last few
years' salary. As a result, the value of pension benefits tends to zoom upward as employees near retirement. Under
a cash-balance plan, though, your company allocates a percentage of your pay each year into a hypothetical account,
which grows at a designated interest rate. And when you retire, your company will pay you the balance of the account.
So everything about the cumulative value of a cash-balance pension depends on the assumptions
your employer makes in setting it up: How much of a pay credit and an interest credit will you get? And the answers
to those questions generally turn out to be, "not enough to equal the benefits you would have received from a
traditional pension." According to an October 2005 Government Accountability Office report, when pension plans
are converted, "more workers would have received greater benefits under the final average pay [pension] than
under the typical cash-balance plan." A key reason: Companies contribute less. Indeed, companies are using cash-balance
conversions to reduce their overall pension obligations. That's an even bigger reason why firms like cash-balance
Companies eagerly began converting to cash-balance pensions in the late 1990s, and by 2003
cash-balance plans held 40% of all defined-benefit assets, according to Federal Reserve data. But when long-term employees
at IBM, Xerox and other big firms woke up and found their pension benefits slashed (in some cases halved), they launched
lawsuits and scored a few notable victories, which slowed the pace of conversions.
Last August, however, Congress passed the "Pension Protection Act of 2006," which
essentially immunized future cash-balance plans against claims of age discrimination as long as employers apply the
same interest-rate credit to workers of all ages. The following week the Seventh Circuit Court of Appeals held that
the basic structure of cash-balance plans is legal, stating that "removing a feature that gave extra benefits
to the old differs from discriminating against them." And on Jan. 16, the Supreme Court let that ruling stand.
Essentially, companies have found a way to reboot the process by which workers accrue retirement
benefits. And the people who suffer most from cash-balance conversions are those who can do the least about it — employees
who have spent many years at one company and are nearing retirement. [...]
First, while it's true that global competition, rising health care costs and the financial
risks of traditional pension plans have all contributed to the pressure to move away from pensions, it's also true
that management simply no longer has much of a personal stake in companywide pension plans. Executive pay is skyrocketing,
for one thing — in the 1970s the average CEO's total compensation was 40 times the wages of the average full-time
worker; today chief executives make 367 times as much. Same goes for the next two-highest officers, whose compensation
increased from a multiple of 31 times average pay to 164 times. Even more egregious: Companies are increasingly giving
upper managers "supplemental executive retirement plans," or SERPs. As a result, many executives are in
entirely separate pension plans from the people who work for them.
That's why it was worth a laugh in July 2005 when Fortune magazine referred to mild 401(k)
reforms, such as automatic enrollment for employees and limits on fees, as "corporate paternalism." The
only reason companies offer 401(k) matches and other attractive features of defined-contribution plans to rank-and-file
workers is because federal law requires them to extend those alternatives beyond their top executives if they
want to qualify for tax breaks. Letting workers play is the price of admission corporations have to pay if they
want subsidies for their insanely high-stakes games of giveaway to CEOs. Yet even so, a disconnect has opened
between executive and employee pensions. And researchers are just beginning to sort out the effects of that detachment
from the other excuses we hear so much about for eliminating pensions. [...]
Third, it used to be federal policy to protect pension plans, not help companies figure out
how to wriggle out of them. In November 1999, for example, the Department of Labor's ERISA Advisory Council
found that "in general, public policy should foster the maintenance and growth of broad-based defined-benefit
pension plans that provide a reliable, lifetime stream of retirement income."
All of which means that while corporate executives have an agenda — to constantly
shift resources away from employees and former employees to shareholders and themselves — it's only unstoppable
insofar as democratic governments decide their macroeconomic and legal duty is to accede to CEO wishes. With George
W. Bush hovering at about 30% in national approval ratings and a presidential election 19 months away, maybe the
U.S. is ready to try a less radical approach.
- Yahoo! message board post: "Lean,
new tools, and offshoring" by "ibmgrunt". Full excerpt: I got invited to a
web conference kind of by mistake meant for management and account execs. It was to sell the new tools such as
Parasite to the customers and push LEAN. Parasite is a tool that, once put on servers, aix, windows, you name it,
they can then be managed by India. They said right in the meeting, once these tools are deployed, we can then have
a lower cost country manage the equipment, and the cost savings will then be realized through labor reduction in
the US. It doesn't get any more plain English than that.
- Binghamton Press &
push IBM cancer study. $3.1M needed to look into
workers' illness rate. By Tom Wilber. Excerpts: U.S. Rep. Maurice D. Hinchey, D-Hurley, a member of the federal
Appropriations Committee, said Wednesday he would work to ensure funding for a $3.1 million study to determine
cancer rates of people who have worked at IBM's Endicott plant since the 1960s. "I feel confident it will
happen," he said. "It is something that needs to be done."
The study, proposed by the National Institute for Occupational Safety and Health, would tap
the personnel records of 28,000 employees since the 1960s and industrial hygiene data, including air tests for
chemicals at various locations in the plant. [...]
"I would think they (NIOSH) would say 'yes, we will get the funding to do this and yes,
we will do a follow-up study to look for the cause of these illnesses,''' said White, who is a spokesman for Alliance@IBM.
Dorlene Walker, a Johnson City resident and IBM worker for 15 years, said she has seen many former colleagues develop
illnesses, including cancer, and she is confident future studies would show more than an anecdotal connection between
IBM workers and elevated cancer rates. "I have seen women have miscarriages, I have seen people with kidney
failure, and I have seen people die of cancer," she said. "And people think I am crazy." Walker, who
is 55, was diagnosed with bladder cancer three years ago. She worked for IBM from 1978 to 1993.
- Binghamton Press & Sun-Bulletin editorial: Study
ready. Time to trace TCE's effects on workers. Excerpt: Ask a resident in Endicott's spill zone if there
is a link between it and increased health problems, and you're apt to hear a litany of neighborhood cancer cases
or birth defects. The problem is proving certifiably that a connection exists. Each individual is exposed to
all sorts of carcinogens over a lifetime, whether through personal habits (such as smoking or diet) or exposure
in the workplace and at home. [...]
Obviously, the more information NIOSH can collect, the more definitive the findings will be.
To that end, NIOSH needs help from a very important party -- IBM. While the company has provided personnel records
that tell who worked there and at which buildings, it hasn't provided all the information NIOSH needs yet.
Endicott was the birthplace of this computer technology corporation. From its North Street
cradle, it grew into an international giant. As a measure of goodwill, IBM should want to help its employees address
genuine health concerns. IBM should not turn its back on these employees, past and present. The sooner it turns over
all the information needed, the sooner NIOSH can proceed with the health study.
Rep. Maurice Hinchey, D-Hurley, has pledged to help appropriate the funding to cover the $3.1
million cost of the study. Hopefully he will be successful, IBM will comply with providing the needed information,
and the study can get started within a year. The wait has already been too long for some Endicott residents.
- Binghamton Press & Sun-Bulletin: Cancer study may focus on IBM files. Health officials' proposal
would examine illness rate of workers at Endicott plant. By Tom Wilber. Excerpts: The interest in chemical exposure
became more intense in the Southern Tier after the 2003 discovery that a subterranean plume of trichloroethylene
and similar chemicals was flowing from the micro electronics plant on North Street and forming gases that pushed
into hundreds of basements through a process called vapor intrusion. IBM sold the plant to Huron Real Estate Associates
Residents have often pointed out that many village residents were exposed to the chemicals
at home and then again when they went to work at nearby IBM. "The employees of IBM are at the core of this community," said
Alan Turnbull, a longtime village resident and executive director of RAGE, a citizens group working with health
officials and lawyers to address issues about pollution. "They have been in the kettle the longest." [...]
IBM has resisted giving all the necessary information to the agency without a guarantee that
it would be kept private, Pinkerton said. The public nature of the study would make that difficult. If necessary,
she added, NIOSH has the legal authority to subpoena the records. "We prefer to work with IBM," she said.
Ari Fishkind, a spokesman for IBM, could not be reached Tuesday evening. He said last week that IBM was cooperating
with the investigation.
- ComputerWorld: Round
5: H-1B Battle: McCain, Kennedy Retreat! IEEE-USA offers Solution! By Dino
Perrotti. Excerpts: A great man once said, "If you want to solve a complex problem, throw
a bunch of engineers in a room and lock the door for a few hours".
Where politicians have failed, IEEE-USA has come up with a solution
that should satisfy the needs of American corporations as well as American engineers. And in true American fashion,
they are also standing up for the rights of foreign engineers and professionals, lobbying for a clear path to citizenship
instead of guest worker programs.
IEEE-USA policymakers have engineered a fair comprehensive reform solution that technology
companies and politicians cannot refute. IEEE-USA turns the tables on the tech company lobbyists by adopting their
own talking points. IEEE-USA argues that the best way to "bring the best and brightest to America" is through
legal immigration and not through guest worker programs. They suggest expanding the EB and F-4 legal immigration visas
and to reform the H-1B Guest Worker program, freezing the cap until reforms are enacted.
IEEE-USA argues that tech company lobbyists are obfuscating the H-1B guest worker program
with legal immigration. "Compete America", a lobbying group funded by large corporations, printed a pamphlet
with a list of all the great immigrant contributors to America. It has been widely distributed to members of congress.
However, the pamphlet does not contain a single guest worker. It is completely comprised of legal immigrants, like
Einstein. The IEEE-USA position is much more appealing and kinder to the future scientists of America by offering
them citizenship up front.
- New York Times: You’ve Earned a Vacation. But Dare You Take It? By Kelley Holland. Excerpts:
Every year, American workers fail to use about a third of their allotted vacation time, according to recent data.
And, increasingly, they tend to use what time they do take in short spurts of a week or less, according to a report
in 2006 by the Society for Human Resource Management and Careerjournal.com. [...]
“People say, ‘It’s my workload,’ but when you dig deeper, you find
the culture of the organization doesn’t support people taking a lot of time off,” said Carol Sladek, the
principal in charge of work-life consulting at Hewitt Associates.
But problems tend to crop up when employees fail to use the time coming to them. Some employees
burn out as they continue slogging through long workdays — hardly a desirable result for them or their managers.
Worse, employees who identified themselves as overworked in a study by the Families and Work Institute in 2005 also
said that they were more likely to make mistakes, feel very angry at their employer and resent co-workers.
- Yahoo! message board post: "Re:
New SWG Salary Scheme" by "Kent Rebman". Full excerpt: Fascinating
how this trickled down to Sales & Distribution-- by the time it actually got to us poor schnooks out here selling
and supporting our software, it had been boiled down to about 7 charts that said, we've overpaid you in past years
... because you're smart and you figured out how to maximize your gain from the incentive plan! ... so, no raises
for anyone this year.
- Yahoo! message board post:
PARASITe is the name" by "ibmgrunt". Full excerpt: Proactive Application Resource Allocation & System
Integration Technique PARASITe.
Yes this is what they call it. The execs on the calls that are supposed to present this to
the customers were having a fit because they did not want to go to the customers and tell them they want to put Parasite
on their machines. They are NOW in the process of renaming it to something else.
I can tell you right now, there is no way in hell somebody in a lower cost country, some lesser
skilled person, lower band, as they put it, 2 dollar an hour tech can in any way provide the support and do the work
we do now simply with this tool that IBM has spent millions of dollars to create. A lot of the claims of this tool
are 100% bogus such as being able to not only power the machine off but to also power it back on. You can not power
a machine back on once it's off without third party hardware installed with it's own power and IP address.
This is executive thinking to save money. I guarantee it will be the demise of IBM. Service
is going down the tubes and so is IBM. You get what you pay for and at 2 bucks an hour you know what kind of support
India will provide. They already refuse to stay late because they have to catch the bus or train home. Third world
- CIO Insight: Numbers Show Big
Decline of Women in IT. By Eric Chabrow. Excerpts: It's true: Fewer
women work in IT today than they did in 2000. Not only that: Women make up a smaller proportion of employed IT
professionals in the United States, according to analysis of government labor data by CIO Insight.
In 2000, 984,000 women worked in eight IT occupation categories tracked by the Department
of Labor's Bureau of Labor Statistics: managers, computer scientists/systems analysts, programmers, software engineers,
support specialists, database administrators, network/computer systems administrators, and network systems/data communications
analysts. That year, women made up 28.9 percent of the nearly 3.41 million employed IT workers.
- Yahoo! message board post: "IBM
explanation of why the SERP was created" by "sby_willie". Full
excerpt: IBM in the latest stockholder proxy says that the SERP was created to try to retain long term IBM executives
since they were leaving around 1993 when the survival of the company was at stake.
Gee, so they have did a great job retaining some or all of the IBM executives that could be
blamed for IBM's problems in the late 1980's and early 1990's. Wonderful, huh?
Actually I heard a story that Lou Gerstner, Jr. was shocked that IBM had no executive retention
plan when he signed his employment contract with IBM. His other companies had one. So he instituted it.
Does anyone know if Gerstner has the SERP?
What did IBM do to try to retain the employees that actually turned IBM around? We didn't
get even a fraction of a SERP. We just got our pension and benefits continually cut.
All IBM employees are equal; some employees, notably executives, are equaler than others.
Mr. Blair (a.k.a. George Orwell) I hear ya loud and clear!
- Scott Burns Blog: Wanted: A Few Daring Executives.
Excerpts: In 1914 Henry Ford made a “bet the company” decision. Conventional thinkers thought he was
insane. Those without Henry Ford’s imagination were certain his decision would put the Ford Motor Co. into
bankruptcy. What did this radical industrialist do?
He chopped the workday down to eight hours. He doubled workers’ daily wages. He did not
do this out of compassion. He had no desire to “share the wealth.” He made a hard-headed business decision.
Absenteeism plummeted. Worker turnover virtually disappeared. So did the number of accidents.
Ditto the number of manufacturing defects. Productivity soared. And the automotive age was born.
Today, just the reverse is happening. The entire structure that promotes worker security,
health, and devoted service is being systematically dismantled. As investors, we benefit from this. But the largest
beneficiaries are corporate executives. Every dime they squeeze out of payroll drops to the bottom line. The same
money takes them a step closer to realizing gigantic stock-option gains.
- Wall Street Journal: Pain
From Free Trade Spurs Second Thoughts. Mr. Blinder's Shift Spotlights Warnings Of Deeper Downside. By David Wessel and Bob Davis. Excerpts: For decades, Alan S. Blinder -- Princeton University
economist, former Federal Reserve Board vice chairman and perennial adviser to Democratic presidential candidates
-- argued, along with most economists, that free trade enriches the U.S. and its trading partners, despite the
harm it does to some workers. "Like 99% of economists since the days of Adam Smith, I am a free trader down
to my toes," he wrote back in 2001.
Politicians heeded this advice and, with occasional dissents, steadily dismantled barriers
to trade. Yet today Mr. Blinder has changed his message -- helping lead a growing band of economists and policy
makers who say the downsides of trade in today's economy are deeper than they once realized. [...]
But now he is saying loudly that a new industrial revolution -- communication technology that
allows services to be delivered electronically from afar -- will put as many as 40 million American jobs at risk
of being shipped out of the country in the next decade or two. That's more than double the total of workers employed
in manufacturing today. The job insecurity those workers face today is "only the tip of a very big iceberg," Mr.
Blinder says. [...]
Some critics are going public with reservations they've long harbored quietly. Nobel laureate
Paul Samuelson, whose textbook taught generations, damns "economists' over-simple complacencies about globalization" and
says rich-country workers aren't always winners from trade. He made that point in a 2004 essay that stunned colleagues.
Lawrence Summers, a cheerleader for trade expansion as Clinton Treasury secretary, says people who argue globalization
is inevitable and retraining is enough to help displaced workers offer "pretty thin gruel" to the anxious
global middle class.
| News and Opinion Concerning Health Savings Accounts,
Medical Costs and Health Care Reform
- Seattle Times: Winds of change carrying
cries for health care toward the Hill. By Lance Dickie. Excerpts:
Here is an unadorned fact of political life: An anxious middle class makes things happen, which explains
the persistent drum beat of national interest in universal health-insurance coverage. People are uneasy.
The exact shape of the change to come is not clear, but more and more Americans are eager to listen to the
options. One of the most straight-forward, and familiar, is national single-payer health insurance.
Everyone keeps their own doctors. Or more to the point, everybody can have one. Health
care via physicians, nurses, hospitals, clinics, tests and technicians does not change. The caregivers are not
employed by Uncle Sam.
Instead of having private insurance, everyone pays something into a common fund, and government
writes the checks. Maybe it is the federal government that pays the bills, or states could be given the cash to
devise a payment system that works best closest to home. The revolution is in financing and reimbursement, not
- New York Times: Aged,
Frail and Denied Care by Their Insurers. By Charles Duhigg. Excerpts: Mary
Rose Derks was a 65-year-old widow in 1990, when she began preparing for the day she could no longer care for herself.
Every month, out of her grocery fund, she scrimped together about $100 for an insurance policy that promised to
pay eventually for a room in an assisted living home.
On a May afternoon in 2002, after bouts of hypertension and diabetes had hospitalized her
dozens of times, Mrs. Derks reluctantly agreed that it was time. She shed a few tears, watched her family pack
her favorite blankets and rode to Beehive Homes, five blocks from her daughter’s farm equipment dealership.
At least, Mrs. Derks said at the time, she would not be a financial burden on her family.
But when she filed a claim with her insurer, Conseco, it said she had waited too long.
Then it said Beehive Homes was not an approved facility, despite its state license. Eventually, Conseco argued
that Mrs. Derks was not sufficiently infirm, despite her early-stage dementia and the 37 pills she takes each day.
After more than four years, Mrs. Derks, now 81, has yet to receive a penny from Conseco,
while her family has paid about $70,000. Her daughter has sent Conseco dozens of bulky envelopes and spent hours
on the phone. Each time the answer is the same: Denied.
- New York Times: Candidates
Outline Ideas for Universal Health Care. By Robert Pear. Excerpts: Seven Democratic candidates for president
promised Saturday to guarantee health insurance for all, but they disagreed over how to pay for it and how
fast it could be achieved.
- New York Times Magazine: What’s
the One Thing Big Business and the Left Have in Common? By
Jonathon Cohn. Excerpts: The struggle to establish universal health insurance, dormant for more than a decade,
is back. Should it actually succeed over the next few years, historians may trace that triumph, at least
in part, to a news conference on Capitol Hill — and to a most unusual figure who participated in it.
The event took place in early December, just after the Democrats won back control of Congress. Its sponsor
was Senator Ron Wyden, Democrat of Oregon, who was unveiling what would become the first universal-coverage
proposal of the new political alignment. The impending change in Congressional leadership lent the announcement
greater significance than usual — Wyden’s proposal would actually get a hearing, for one thing.
One of the men alongside Wyden and Stern stood out, however, politically if not visually.
He was Steve Burd, chairman and C.E.O. of Safeway supermarkets. Nobody has ever accused Burd of having a bleeding
heart: a former management consultant with a graduate degree in economics, he became notorious two years earlier
when he helped lead California grocers into battle with their labor unions over employee medical benefits. Burd
insisted that the unions accept skimpier insurance to save his company money. In the four-month walkout that ensued,
newspapers ran articles about checkout clerks defaulting on their cars and homes. Union supporters blasted Burd
as “evil” and “a rat.” At one point, a group of clergy members marched on Burd’s California
estate, holding a prayer vigil and delivering a handwritten plea for him to compromise. He didn’t. And eventually
he won, forcing major concessions from the union.
Yet here was Burd in Washington, arm in arm with one of labor’s most passionate leaders,
endorsing a plan in which the government would guarantee affordable, high-quality insurance to every single American. “Our
nation is facing a crisis that requires immediate attention,” Burd declared. “Working together, business,
labor, government, consumer groups and health-care providers can collectively solve this problem.” And while
the “working together” line had the feel of boilerplate, Burd meant it. In the year that Wyden took
constructing his proposal, Burd was quietly advising him; eventually they or their staffs were conferring almost
New on the Alliance@IBM
- From the Job Cuts
Status & Comments page
- Comment 03/25/07: Most system admins in the US will be going soon. I was on a web conference for the
new tools to be put on all platforms. They said in the call, once these tools are deployed, we can then
have a lower cost country manage the equipment, and the cost savings will be realized through reduced
labor in the US. Said that right on the call. So we have to work overtime to install these tools and
get them working so they can send our jobs to India. I can tell you I will be dragging my feet on this
one and performing just like our counterparts in India. -IBMSUKS-
- Comment 03/26/07: To IBMSUKS - that may be the strategy, but it's a strategy that is
doomed to fail miserably. India or any other low cost country doesn't have the skills, nor the experience,
nor the discipline to handle anything but the most basic work. You can train the skills with time, but
you can't train experience nor can you train discipline. Their language skills must improve dramatically,
service call takers and CEs literally can't understand them. Stupid, arrogant executives - it's as if
they are trying to fly the entire corporation into the ground. -Anonymous-
- Comment 03/29/07: Big LEAN meeting in Boulder in two weeks...got a call this morn from
a guy i used to work with, 30 people in his dept right now will be dropping to 20 with the 30% job cut,
he is one of them, no word on severance or how much time he will have before he is gone... -Anonymous-
- Comment 03/30/07: Here is a heads up on Larry Longseth's LEAN project. They have hired
a woman named Pamela Hemingway to travel to various locations for evaluations. If you see this woman
at your location watch out! You can lookup her photo in blue pages. I urge anyone who has pertinent information
to share it on this website. -Anonymous-
- From the General
Visitor's Comment page:
- Comment 03/23/07: If IBM insists it is a "global" entity and technically owes nothing to
the American people (who helped build it's reputation, by the way), than why don't the top dogs move
to the third world countries where they are harvesting their bounties and enjoy the perks over there?
Why live here and enjoy the American lifestyle? We need to replace these elite few with their global
counterparts who can do the same jobs for a hell of a lot less money....just like they are doing to us.
-Move the Top Dogs Out-
- Comment 03/25/07: I have been reading these comments and I really identify with them.
I am currently an IBMer but have had enough of this insane company. I'm actively looking outside for
other employment. In my opinion, IBM management can be summed up with one word.. ARROGANCE. This is so
engrained in the IBM system I doubt the company can or will change. The IBM company does not know how
to change. The arrogance starts at the top with Sam Palmisano. He is probably the most arrogant S.O.B.
on the planet. Until the board members are willing to change and replace this arrogant S.O.B. the IBM
company will continue to decline. This is why I'm planning to leave. The pay isn't bad at IBM but it's
not about the money to me. Nothing is worth putting up with this arrogant management. -I'mLeaving-
- Comment 03/25/07: We just received a time in motion spreadsheet from 2nd line manager.
They want us to account for what we do every 15 minutes. Has anyone else received this? We don't trust
anything that IBM does. -Anonymous-
- Comment 03/26/07: We had an IGS Network Services all hands meeting in Markham, Canada
last week. Our second and third line managers gave us a long lecture on why it is such a good thing to
move jobs to low cost geographies and yes, more resource action is coming, we must be competitive, etc.
The rhetoric that they go to India because they can't find the skills they need in North America is gone.
They now tell us as it is. I wonder what makes a person to be so void of any shred of decency that he
tells a bunch of talented, loyal IBM-ers that soon their help won't be needed because others in some
Third World hellhole can get the job done so much cheaper. It seems to me that management in general
is scum of the Earth. I wonder if these management lowlifes will be that enthusiastic when they will
be replaced. Most of these aholes work from home anyway. An Indian manager could do that job for a fraction
of the money. I will actually be happy to see that happen. -Anonymous-
- Comment 03/26/07: >> We just received a time in motion spreadsheet
from 2nd line manager. They want us to account for what we do every 15 minutes.<< That's simple - you tell them
that every 15 minutes, you stop whatever you're doing to fill out their silly spreadsheet. -Beat 'em
at their own game-
- Comment 03/26/07: Account for you time in 15 minute intervals? Bless your heart! The
lowest paid employees at IBM have to account for their time in 6 minute increments, that's 80 measurable
units per day, 400 per week. If you miss so much as 1 unit (6 minutes), you will be contacted about your
failure to report your 40 hours for the week. This time reporting system is called QSAR, which stands
for Quality Service Activity Reporting. As an average, 3 measurable units per day have to be recorded
to cover personal issues at the water fountain and the restroom. How would you like to have to deal with
that? In addition, annually, you get to take a recertification course and examination to insure that
you understand how to fill out your QSARs. This gives several layers of management a bunch of fodder
for their daily activities. Micro management.... -gadfly-
- Comment 03/27/07: Just had meeting in RTP Software Group....we were told no raises for
2's (here's the managed out program). Only 1 and 2+ will get raises... Enough is enough! And that's managements
way of alienating the 2's and get them to leave. Wonder what's next? -FEDUP-
- Comment 03/27/07: I worked at one of IBM call centers. We were even timed on how long
we went to the bathroom. Our manager had a chart, at the end of every month how many bathroom breaks
we had and how long we were in the bathroom. -Anonymous-
- Comment 03/27/07: Check out FLSA if you are an exempt employee. This level of tracking
could change your status from exempt to non-exempt and presto - you qualify for OT at time and a half.
-QSAR and time tracking?-
- Comment 03/29/07: About timing bathroom breaks. I did visit one IBM office where the
badge was needed to open the bathroom outer door. This would provide sufficient data for counting your
number of visits. But there was no badge-out so they wouldn't know how long you stayed. With RFID, of
course, explicit badging wouldn't be necessary. They could capture time-in-stall as well as time hand
- Pension Comments
- Raise and Salary
- Comment 03/26/07: Salary = $85K; Band Level = 8; Job Title = Project Manager; Years Service = 10+;
Hours/Week = 50; Location = Austin; Message = There is OES Wage Data required to be posted for public
viewing within IBM providing wage information. It is posted in the glass cases within IBM buildings where
other labor information is posted. I believe this public posting of information is required by US labor
or other laws and the data must remain posted for a specific period of time. There was a posting for
a Project Manager (assume senior level) Feb 2006 to Feb 2009. Pay range $108K to $123K. Prevailing wage
$106K. There was also postings with similar information for Software Engineers. -Anonymous-
- Comment 03/27/07: Salary = 91000; Band Level = 8; Job Title = Product Manager; Years
Service = 9; Hours/Week = 40; Div Name = GTS; Location = RTP; Message = Leaving IBM end of this week.
No raises for the past 3 years. Got a 25% uplift at another company. There are some positive aspects
of working at IBM but the negatives are overwhelming. -Product Manager-
- Comment 03/27/07: Salary = 105000; Band Level = 9; Job Title = Exec PM; Years Service
= 10; Hours/Week = who counts any more; Div Name = Global Services (at least this week); Location = southeast;
Message = I am surprised I have not seen anything about the move that IBM pulled last year where they
removed "Retention" out of the criteria for raises. Apparently they think they can get their
millions in bonuses even if all the worker bees leave. -usedtobeproudtobeanIBMer-
- Comment 03/27/07: Salary = 103,000; Band Level = 8; Job Title = Advisory Court Jester;
Years Service = 29.3; Hours/Week = 40; Div Name = SWG; Location = CA; Message = No raise in 5 years,
but even my wife says I haven't done much in the last 10-15 years. I guess I was ahead of my time, and
was able to foresee this was going to happen and decided to act or not act first. -notsurehowistayedthislong-
- Comment 03/27/07: Salary = 125000; Band Level = 9; Job Title = Systems Engineer; Years
Service = >1; Hours/Week = 55; Div Name = GBS; Location = 100% Travel; Message = I have been with
the company for less than 5 months. I am not impressed with management and all of the paperwork associated
with this position. Its also difficult to find anything on the intranet. I have worked for other consulting
companies and will probably be quitting in the near future. IBM has definitely changed since it has outsourced
a lot of the work from what I have been told (morale is bad among the people I work with). -NewHire-
- Comment 03/29/07: If you are a recent PBC "2" appraised USA employee and are
at or around your so called IBM competitive pay for band midpoint, your raise will most likely be 0%
come June 1st. Is this a surprise? It shouldn't be. Nothing like NOT HAVING A UNION CONTRACT to allow
this to happen. -need_a_contract-
- PBC Comments
- Comment 03/26/07: Prior Yr PBC = none; This Yr PBC = 2; Message = "At IBM, there is no forced
distribution of ratings." This statement is a blatant lie. It's the same statement I was told at
my orientation as a new IBMer. Since I'd been around a while as a co-op I questioned it, and the HR rep
said that if I'm being told that there is a set distribution, then I should fight against it. Of course,
when my manager met with us last week, he told us point blank that he was "strongly coerced into
giving a distribution".
He was allowed 2 PBC 1 ratings for his entire department. As I was told by corporate HR, I questioned
him, and he said he'd have to go back to his up line management who gave him the distribution and, in
turn, ask why he was told he could only give a certain number of 2+'s and 1's when his employees were
being told that there is no distribution. Of course, I doubt he'll actually fight for us, but the statement
that IBM corporate says about distributions is a lie. I love my job, and I don't have a problem with
PBCs given on a bell curve or other distribution, but I do have a problem being lied to. Overall, I'm
very happy here at IBM, and I won't let this affect my work as I go forward, but it angers me when corporate
says one thing to appease us, then does the opposite to save money. -Anonymous-
- Comment 03/27/07: Prior Yr PBC = 2; This Yr PBC = 3; Prior Yr Bonus = 3000; This Yr
Bonus = 0; Message = After reading through a few of the listings and reading the bullshit about no distribution
I had to write again. My manager told me straight out that our exec did not like the distribution and
went through every PBC and changed them so the distribution suited him. It was very clearly a search
for who could we down-rate. My manager said he fought and fought for the 2 he originally gave me. I have
some friends and have had it confirmed that my first rating was a 2 and our exec changed it to meet the
distribution target. If you did not read my previous posting I always fought to have all quantitative
measurements in my PBCs. I met them all, but it did into matter. The witch hunt is in full swing at IBM.
I think Sam must play golf with the boys from Pepsi. I hear that they take in a new crew and train them
and then give them a one year assignment. At the end of the year (I believe the let the people with the
bottom 50% performance go (the % may be wrong, I read about this many years ago. -usetobeproudtobeanIBMer-
- Comment 03/27/07: Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = 750€; Prior
Yr Bonus = 2000€; Message = Just as frustrating as it gets ! You are working your butt off for
some retards to get richer and richer and in the end your work is going in Bangalore or some 3-rld world
Eastern Europe country ! Thanks "the World Company" !!! -Just Doesn't do it !-
- Comment 03/29/07: Prior Yr PBC = 2; This Yr PBC = 3; This Yr Bonus = 0; Prior Yr Bonus
= 850; Message = I was rated a "3" this year because I missed too much time for illness and
there was no "major" medical problem. I missed 96 hours. Don't most companies in the modern
world give employees 2 weeks of sick time? What angers me most is that I was the last person in the dept.
to get my rating on the last week of January. I had one week to protest to the 2nd level and didn't have
any time to go higher before I was forced to sign it. They purposely did my PBC with only one week to
|Vault Message Board Posts
IBM Business Consulting Services message board is a popular hangout for IBM BCS employees,
including many employees acquired from PwC. A few sample posts follow:
Demand" by "phooey69". Full excerpt: Nope, don't work in strategy...as we all know, IBM
doesn't do strategy! (insert drum and cymbals) I do indeed work in SO...in fact, I'm not even a "business" guy...I
tweak bits and bytes. However, I'm also an observer, both of current events as well as past history.
Speaking of past history...remember "On Demand"? That marketing phrase that not
even IBM executives could define? Customers didn't buy it, but IBM HR certainly did...in spades. They bought into
it hook, line, and sinker. It was easy for them to buy it, because they were already practicing it.
A lot of people in this forum and others ask "Would/Could IBM get rid of tens of thousands
of Western employees and move the work to India, within the span of 1-2 years?" YOU BETTER BELIEVE IT. Consider
the following data points, keeping in mind that they are from an SO perspective:
- If you were around IBM in the early 1990s, you'll recall the thousands of people who were layed off when
Gerstner came along. All that mattered at the time was reduced headcount...management got rid of people
you wouldn't expect: 20-25 year engineers and programmers...technicians with decade-long (and more)
relationships with customers...sales people who brought in millions of dollars of business every year.
It didn't matter who they were, they were just extra headcount that got chopped.
- IGS divisions do not keep
a bench...that is, they do not keep "spare
employees" on hand. IMHO, it's a questionable business strategy, but that is what IGS does. (Instead, they
try to string potential hires along, as has been described many times in this forum.)
- In true IBM
fashion, a "Global Resourcing Project Office" has been established. For all new projects in SO, managers
have been instructed to get staffing from that office. While Western employees can be hired, it takes
many layers of management approval and justification and paperwork to do so.
- The GR project office
isn't just for new hires or new projects. Managers in SO have been ordered to move as much existing
project work as possible to GR resources. The only throttle on the whole process is feasibility with
respect to skills and culture, and the number of GR employees who can meet the requirements. Even if
GR employees don't meet the requirements, managers are expected to take some on anyway for training purposes.
- Investments in training/education, lab equipment, etc. have been cut to almost nothing for US and European
operations. Any investments of that kind are going more and more to BRIC operations.
- From what I
can see, all of this stuff is forming a big "culture
sorts in the current SO management. At the risk of generalizing too much, it seems that the managers
in SO do not want "doers" (e.g. grunt IT Specialists) working for them, or even in relation to them.
They all want to work with PMs, IT Architects, team leads, etc. You can see this in PBCs, IDPs, etc.
Hard technical skills of any kind are being de-emphasized at all staff levels, in favor of "soft skills" such
as people management, cultural sensitivity, etc.
It's all pretty crazy...but that's the way it's going.
Visual!" by "Dose of reality". Full excerpt: And absolutely correct. Now if they
could only manage to tweak it a bit and turn it into "Throw Mama from the Train", GBS might buy
a few more years. The bleached blond bimbo isn't even good at executing on a pure cost reduction strategy!
Are you sure you don't work in "strategy" instead of SO??
analysis, but..." by "wonderaboutibm". Full excerpt: There's an aspect you haven't addressed.
It is the intangible called "know-how." I don't think the BRICs don't have it yet ... at least
not in, say, WebSphere or Tivoli product development. That's the weakness in IBM's admittedly follow-the-leader
Granted that IBM could shuffle many out. They did it before, but what does that really
prove? Gerstner would defend all his cuts as required by survival -- such issues as you brought up in your
post were at best higher up on Mossbauer's survival hierarchy. IBM could easily have mass layoffs again -- and
forever sully their software brand, which is the best thing IBM has going for itself right now.
I've ad on-and-off contact with SO, too ... yes, this Global Resourcing is a real howler.
It is being rammed down everybody's throat -- and I would strongly agree that many IBM technicians are in the
cross-hairs now. In the trenches we can see how it might not go over well at all, but the management from the
PE level up instead wanders about in self-satisfied stupor, thinking Deep Thoughts like the kind we hear about
every so often on Saturday Night Live.
for the Buck" by "phooey69". Full excerpt: A few random ramblings on feasibility:
- For IBM, "Bang for the Buck" is measured purely in terms of cost reduction. This has been true for
the past 15 years, and probably longer than that. Performance, good will, customer value...in the IBM management
culture, all are secondary goals to the primary role of COST REDUCTION. In many ways, that's all IBM management
- An interesting point is that despite the PR, IBM is a trend FOLLOWER, as opposed to a trend setter.
Offshoring to third world countries has been attempted (and rejected) by many companies already, yet
IBM is just getting started. Many IBM management initiatives are like that...e.g. LEAN. A consultant
like McKinsey comes in, tells IBM management that something is a "good thing", and IBM goes off and follows it...even after
other companies have tried and rejected it.
- IBM's revenue streams are showing "trouble spots" in
certain areas, especially in IGS. In SO where I come from, the long-term megabuck contracts are starting to dry
up. In GBS and ITS (GTS? Whatever it's called today), there has been long-term evidence of customers leaving
for other firms. There hasn't been many indicators so far that IBM is either willing or able to pick the slack.
- IBM has sold off many, if not most, of its assets. If you look at former plant sites like Austin, RTP,
Rochester, Poughkeepsie, etc., you'll find that most of the space has been sold off, with IBM leasing
what's left. The same goes for capital items like plant equipment, sales offices, etc. There isn't
much left to sell, relatively speaking.
The bottom line? What's going on today re: BRIC offshoring does not look like a strategic,
forward-thinking action to me. On the contrary...it looks like more of what IBM management has delivered for the
past 15 years: desperate cost cutting in response to shrinking revenue streams. Sam and company are trying to
keep the gravy train moving. Like those desperate train conductors in old movies, he's ordered his "engineers" to
pull every lever, and grab every loose chunk of coal they can to throw into the engine...anything to keep the
great post from the front lines" by "GTS Grunt". Full excerpt: phooey69, Very true on
the bench and the cookie monster era. One could almost say that nowadays every SOW is a fraud from a bench
If you joined in 1969, keep your retirement trigger handy and be ready for a 30-day
bailout. There's a pension surprise coming for July, I hear. They are getting desperate for money and are
going to take the tax hit and move everyone to a cash balance just to keep the cash flowing in to feed
the Armonk overhead and process machine.
FYI...Microsoft, HP and UNISYS are looking for older experienced IBM IGS specialists.
Profession" by "techconsultpro". Full excerpt: How are the Sales profession compensated?
Do they get a fixed salary in addition to commission?
Answer" by "GTS Grunt". Full excerpt: At the risk of generalizing too much, all of the
sales positions I know of are composed of a base salary and commission.
Basically, you are brought in at a Band level, then the base salary is cut based on the
sales plan. The sales plan base salaries are usually cut from 100% to 50-85% of base. The higher the cut, the
higher the alleged potential maximum in the plan.
All of the plans have a theoretical maximum which may vary from 120% of base to up to
300% of base. One IGS plan claims no upper limit, but its for a operating unit that is desperate for sales and
has not made its revenue numbers in 7 years.
The funded limits for each sales position commissions are much lower. For example the
plan may expect 150% but the finance folks have funded it to 121% since they don't expect many to achieve the
targets, which are usually very hard to achieve. Managers usually over quota you so that they can plan on making
their numbers. Usual overquotas are about 15-30% for each level of management between you and the CEO.
In US sales, there are few, if any raises. You get a 3% one time bonus if you make 100%
of your target, that servers as your one year salary raise. Next year, if you don't make 100% you get nothing.
There are few, if any promotions or formal raises in the last 5 years.
Some sales plan have additional ways to limit commission earnings. In IGS and SWG, they
have a minimum that you need to make BEFORE they pay you anything. In some IGS plans, it's up to 75%
of the target. For example, if you're target is a typical 3 million dollar monthly signings target, you need to
make at least 2.1 million per month cumulative to get any payout.
So many sales types make so little in base that they've instituted a retention financial
tool called the "draw". You are allowed to "draw" up to let's say 85% or 90% of the first
90 days of commission as a loan against your future commissions. If you don't make the sales or your commissions
don't cover it, then at the end of the sales commission period you have to repay the money loaned with interest.
Not a pretty sight for those who leave early or who get moved (willingly or not) to a non-commission job. The
experienced sales types all have learned to refuse commission and live on 50-80% of the pay band.
Another "hidden" play is the "reserve" clause. Let's say you close
a huge deal. You expect the big check 30 days after the end of the quarter and you find out you still
owe money. Why? Reserve! Management can arbitrarily hold back commissions on any sale if they think it's too good
to be true, even on funded federal government contracts! This is just one other way to "socialize" your
earnings on a team and retain you in a job or the company.
Another surprise is quota changes in mid-year. Management always has the right to change
your quota at any time, and make you a team (defined as "add deadweights" or "support your bosses
friends") when the territory was "misjudged" in size or potential.
Add to this that commission is usually paid quarterly and 30 days late to boot. This means
your commission, if you made the minimums quarter to date, gets paid on April 30 for the sales that happened Jan
1 to March 31.
Now you understand why they are begging for principals and other sales types in SWG, STG
and IGS. No one wants to be in sales.
The only area where sales types seem to be somewhat happy and seem to get paid OK is in
software group. In IGS, turnover is about 20-30% per annum, even though there is an added retirement incentive
for the real old IBM sales types to stay that younger folks can't get.
Always look at the targets in the quota. They are usually 1-2 targets out of an average
of 6-7 that will be almost impossible to meet and that's where they get you by the pocketbook.
Management, especially senior management always does well because of
the over quota process.
stock options keep you at IBM?" by "it_guy_oz". Full excerpt: Just wondering if anyone else
out there can relate to this. I have been with IBM for over a decade, joining when respect for the individual was
the company's mantra. Over the years I have been a consistent top performer (mostly PBC 1) and have been awarded
stock options on three occasions which have given me incentive to stay away from seek.com.
Progressively I am witnessing an erosion in employee morale all around me and don't feel
the pride I used to in being part of something truly special. I am finding workplace stress, unreasonable
performance expectation (weekend work, unpaid overtime, late and early conference calls) and general
ingratitude (a whopping 4-5% for PBC 1) are taking their toll.
I'll always be a highly motivated achiever doing all I can to exceed clients and company
expectation but cant help but feel IBM will always expect far more from it's staff than it returns. Now
we are about to start the PBC/IDP/PDF cycle again I'm wondering is it really worth investing the same level of
energy and enthusiasm again. If I cashed in my stock options and walked away now I'd get around US$30k, but staying
on would yield me between $1400 - $2500 extra for every dollar the IBM stock price rises over the next 6 or so
years. Now that the IBM stock price is getting back to within sight of pre-dot com crash levels what would you
my first PBC" by "ghosty06". Full excerpt: It's that time of year again and
I'm doing my first one, but I'm unsure whether this is something I should just copy and paste from the
template they give us. Can you guys give more insight on goals that are colorful and something I should
strive for? Other than the obvious meet utilization and project goals, what should I add? B&P work?
Save the company money? I know I'm being narrow minded, but with me thinking and trying to be more BLUE
what should I add?
can't resist ..." by "wonderaboutibm". Full excerpt: You need to read carefully the posts
on this board. IBM does indeed have "socialist" ss opposed to merit-based evaluation/personnel
Your manager provided you a template so that everyone's goals would be in an IBM lockstep.
In most cases, altering this goal text is strongly discouraged by IBM managers. JUST CUT AND PASTE. And be done
There is little upside and much downside in personalizing your PBC goals. You could soar,
but that won't make much if any difference in raises, promotions, etc. And you run the risk that you
could be hanged on the crossed t's and the dotted i's. You won't be hanged on the bland vanilla base, but boy
if somebody needs to take a dive, anyone who has stuck his/her neck out is first in line.
Now ... if sticking your neck out had potential reward as well as risk, your calculation
would be different. But the risk/reward profile of running at all out of formal formation at IBM is very heavily
stilted on the risk side.
Please don't misunderstand -- at IBM and anywhere else, you are ultimately responsible
for a dispassionate evaluation of your own performance. It's just that at IBM, you will get a lot less
help in that regard than at many other organizations.
Now MY risk in answering this post is that I am taking a chance that it is a serious post
rather than one of those pull-Wonder's-chain affairs.