The petition drive comes in the wake of reports that IBM plans to cut by 15% the salaries of IT specialists and support workers, starting in February. According to an internal IBM document viewed by InformationWeek, the plan was drawn up in response to several lawsuits filed against the company alleging that it failed to pay overtime to groups of workers who were legally entitled to the extra pay. ...
IBM has said it won't save any money as a result of the plan because the pay cuts will be offset by increased overtime costs. But some IBM workers are crying foul. "We have had record profits and seen our benefits and base pay erode at record levels," wrote one poster on a message board operated by Alliance At IBM.
Big Blue is still there, but just barely. Its head count dwindled from a peak of 12,500 in 1984 to about 1,200 today. In this played-out factory town, IBM's legacy is growing more stained by the day. After contaminants leaked from an IBM plant decades ago and spread in groundwater beneath more than 400 homes, locals no longer felt they were getting a square deal from Big Blue.
It's a measure of their dissatisfaction that on Jan. 3 a group of seven law firms filed suits against IBM on behalf of 94 residents and business owners. As many as 900 more lawsuits are expected to follow. The plaintiffs claim to have suffered health or financial injuries as a result of odorless vapors from industrial solvents collecting in their homes, including the carcinogen trichloroethylene, commonly called TCE. A state study in 2006 showed higher-than-normal incidences of cancer and birth defects in houses above the polluted groundwater, but it didn't prove causation. In interviews with BusinessWeek, IBM denies culpability. The suits have "no basis in science or law," says a spokesperson.
According to him, IBM is in need of 30,000 programmers for its worldwide expansion. He said he expected to welcome more Vietnamese students to work for his group. He also spoke of his group's CEIS programme, which will take Viet Nam as the first country in Southeast Asia and the second in Asia after India for its launch.
The company claims they won’t save any money because workers will gain back lost salary through overtime pay — even though about a third of the affected workers are not currently working overtime. The company also claims maintaining the workers’ current salary levels while also paying overtime would result in “costs that exceed competitive levels.”
In the humble opinion of this author, that’s a load of hogwash. I’ve said this before in relationship to small businesses, but it’s just as true (if not more so) for major corporations like IBM. If your company’s profitability only comes from forcing people to work unpaid overtime, you need to clean house in the executive suite and bring in a new (competent) management team (Note: emphasis is from the original article) — not launch into petty retaliation against the employees who complained. ...
As it happens, IBM’s financial results in 2007 exceeded analysts’ expectations. And according to one IBM employee quoted in the article, their CEO Sam Palmisano has reportedly “promised Wall Street a good 2008 — that will come at the expense of more U.S. workers.”
Hmmm. If it’s necessary for the rank and file to take a 15% cut in pay to maintain competitive cost structure, just imagine how much better the company could do if senior executives and board members subjected themselves to the same standards and likewise took 15% cuts in their total compensation. I mean, it was their “leadership” that got the company into this situation in the first place. Wonder what the chances are of that happening?
This increased level of pressure will certainly shorten the life of a retiree which saves IBM thousands of dollars in pension costs as we die away. I know very well if I were to pass away, my wife would never be able to contact anyone for help about the retirement she is entitled to, along with any medical plans that may still be available. Even her friends would not be able to help her with all the telephone codes to pass in order to get to any live person.
This is a well engineered plan to save the company money. It makes me sad every time I think how things have changed. It was a complete turnaround from respect to disrespect for us old fogies.
I was told by more than one source the experienced dentists were leaving the plan because they feel they should be paid more than the minimum a new dentist may get. This put me in a real bind. I have to accept going to one of two dentists that just got out of school. IBM, via the Fidelity Wall, will not let me change plans. I am stuck for the rest of the year having to go to inexperienced dentists just looking for someone to practice on.
IBM is certainly determined to kill off the retirees one way or another. It makes me sick just thinking of what they do to us, without blinking an eye. They know there is no path back to them for any complaints or cries for help. What a system.
Bush, Pelosi, Reid and the presidential candidates of both parties have an opportunity now, and I believe an obligation, to adjust the public policy mistakes of the past quarter-century that have led to this crisis. And only through courageous policy decisions will we be able to steer this nation's economy away from the brink of outright disaster.
We all have to acknowledge that our problems were in part brought on by the failure of our government to regulate the institutions and markets that are now in crisis. The irresponsible fiscal policies of the past decade have led to a national debt that amounts to $9 trillion. The irresponsible so-called free trade policies of Democratic and Republican administrations over the past three decades have produced a trade debt that now amounts to more than $6 trillion, and that debt is rising faster than our national debt. All of which is contributing to the plunge in the value of the U.S. dollar. ...
Just what would you have us spend it on? The truth is that consumers spend most of their money on foreign imports, and any stimulus package probably would be stimulating foreign economies rather than our own. Imports, for example, account for 92 percent of our non-athletic footwear, 92 percent of audio video equipment, 89 percent of our luggage and 73 percent of power tools. In fact, between 1997 and 2006, only five of the 114 industries examined in a U.S. Business and Industry Council report gained market share against import competition.
The result is a historic linkage between the fortunes of the public and Wall Street, just as older baby boomers -- now past 60 -- focus more seriously on the living standards that await in their post-work years. "You've been saving all these years," said Pamela Hess, director of retirement research at Hewitt Associates. "You've got quite a big nest egg, potentially. The stakes are just so much higher when you're that much closer to retirement." ...
Just before the stock market tanked in 2000, Nancy Haynes was anticipating a future free of financial worry. On a canoe ride in the Pocono Mountains of Pennsylvania, she and her husband counted up all their assets, including their home, and concluded that they might be worth $1 million. But the sharp decline of technology and other stocks slashed about one-third of their nest egg's value, and Haynes began to worry. At 65, the retired human resources professional went back to work. ...
"Without a doubt -- comparing where we are today with 401(k) plans as the primary form of retirement savings for many baby boomers -- the impact of a down equity market has a much bigger impact on society than when traditional pensions were the primary form of retirement income," VanDerhei said.
Few have managed such enormous sums before. Yet, they'll have to make investment decisions that will determine their financial security in a retirement that could stretch for decades, the longest retirements any generation has yet experienced. The risks are high. They could succumb to unwise investments. Worse, they could fall prey to unscrupulous advisers who exploit financial naïveté. ...
For some, receiving retirement money in one big pile can lull them into thinking they'll never run out. "It's this whole money illusion game," says Jack VanDerhei, a business professor at Temple University. "Having $500,000 looks much bigger than somebody promising to pay you $50,000 (a year) for the rest of your life. You feel rich going into retirement."
Unwise spending and health care needs can devastate even the healthiest nest eggs, says VanDerhei, also a fellow at the Employee Benefit Research Institute. Danny Null, 60, of Greenville, S.C., fears that rising health costs could derail years of disciplined retirement planning. These expenses "will continue to go up," he says. "That's a concern."
After every crisis, regulators say they will cure the financial system of the recent folly, reassuring the public that the caustic asset du jour — Latin American debt, Internet stocks, mortgages in Florida — will never again be allowed to bring the banks down. Yet the recurrence of disasters suggests that the risky cravings of the masters of the universe are uncurbed. All that happens is that the next crisis takes a somewhat different form from the last, using some newly noxious financial product that used to be considered safe as, um, houses. ...
There’s nothing like a smart banker motivated by an otherworldly bonus to get around the most carefully written regulatory limits on his or her ability to make money. Say regulators demand that banks maintain a big cushion of capital as a share of their loans, as a form of insurance in case the bets go bad. All a wily banker has to do is move the risky investment to a “structured investment vehicle” and claim it is not on the balance sheet. And there are other tricks. ..,
Regulation certainly needs tightening to mitigate the worst kind of irresponsible, often predatory lending that led to our current mess. But there is a part of the problem that regulators do not touch: bankers have an incentive to bet the bank every time around. That’s because of how they are paid
In a good year, top bankers’ pay would shame Croesus. But they don’t have to return past bonuses when the year is bad. Merrill fired its chief, Stanley O’Neal, and Citigroup dispensed with Charles Prince. But Morgan Stanley’s John Mack is hanging on. None have returned the untold millions they made in all those years when their banks were stuffing themselves with subprime loans.
Mr. Ball joined Social Security just four years after President Franklin D. Roosevelt created the program in 1935, then ran it from 1962 to 1973. He was one of the chief architects of Medicare and administered it for its first seven years. He oversaw the increase of Social Security benefits and the introduction of automatic cost-of-living adjustments. He drafted the Kennedy-Mills bill, which proposed universal health insurance, and three times in the past 25 years helped reform and save the old-age insurance program.
Job families are not necessarily tied to bands. A job family 09B is not necessarily associated with a band 9 employee. For example, the recent change of job family 24A from exempt to non-exempt was associated with bands 6, 7, 8. You can actually see what the job families are using the Jobs tool on the internal W3 job-site.
As for band 10s, the kickers are all but gone for most band 10s unless you are in a management position (job code) or a commissionable position (job code). It depends on what business unit you are in and what sector. The distinctions that used to exist have been dramatically softened or eliminated. After the number bands you move to the letter bands A, B, C, and D with the highest (Sam) being an A. It's in these bands that the executive compensation and benefits program kicks in and changes the game completely.
In the technical career tract band 9 is often, but not always, associated with a certified professional, band 10 is almost always associated with a senior certified professional or an STSM. A DE (Distinguished Engineer) is always a 'D'. I suspect an IBM Fellow is above a 'D' but I don't know where (C?).
The job family is used to establish the salary range that an employee's job will fall into and will be divided up by band. A higher band will have a higher (sometimes wider salary band). In most cases these bands overlap to some degree.
As an employee working to maximize your salary you will want to find that job family with the best salary ranges in the bands. HR will tell you that these ranges are market driven and market set. Generally, the more market desireable the skill, the better the opportunity in terms of range. But beware, these ranges can invert. For example, as late as 5 years ago the project management ranges were higher than the IT architect ranges. That has since changed and the IT architect ranges seem to be higher. BUT, as long as you have head room (you are not in the top quartile of your job family-band range) you can do the job you enjoy doing and still grow salary-wise if you are performing well.
If you hit the top of your job-family-band's range and you want to grow your income, it's time to push for a new band or change job families. Moving up a band is an automatic improvement in your salary opportunity range usually. Crossing job families requires knowledge about the salary ranges in that family and the band ranges. For example, moving from a high band 6 IT specialist to a band 6 IT architect might improve your ranges as architects currently have a higher range for the same band. That may not be true for a move to another job family such as project management. That may be a latter move salary-wise.
At one point I found myself at the top of the top band in my job family. I was stuck. I had to make a shift of some sort to effect a change in the range of salary I could make. As long as I was stuck in the position I was blocked from any raises unless there was a market range change as perceived by HR. That didn't happen fast enough for me. I found a good career mentor, tough but visible assignments, and eventually made a change into a path that has enough head room for now.
Another possible variable is whether you are on commission or a sales plan. Generally, if you are in a role with these types of earnings you will have a different job code than non-commissionable folks doing the same sort of work.
IBM is trying to starve the services business - it's become a sweatshop due to escalating job demands and resource actions.
The bottom line is that IBM's goal is to pay most employees below the average wage for their job. And then they expect that these same employees will make IBM an above average company.
The idea -- replacing a tax break for employer-provided health coverage with a new $15,000 tax deduction for families and $7,500 for individuals, regardless of where they buy insurance -- would have been a major change in both the tax code and the health-care system, difficult to achieve under the best of political circumstances. And last year was hardly that.
That has left some very sick people facing health-care tabs of hundreds of thousands of dollars or more, prompting their families to seek help from the government, or to scramble to change jobs or even divorce for no other reason than to qualify for new health insurance. And it has led some advocates for the chronically ill to plan a new lobbying effort in hopes of persuading Congress to require that insurers increase lifetime caps to as high as $10 million. ...
The predicament of those who burst through lifetime insurance caps is largely ignored in the debate about overhauling the U.S. health-care system, which focuses mainly on improving access to insurance at a time when a record 47 million people lack coverage. But the new political appetite for reform is one reason the National Hemophilia Foundation has decided to revive a lobbying effort, previously pursued in the 1990s, to significantly increase the caps, said Glenn Mones, the group's vice president for public policy.
However, businesses should not be required to offer health coverage to workers or to help workers pay for coverage, according to NBGH. Employer mandates are "very harmful to working families and our economy because it will only force employers to eliminate jobs, move more jobs offshore, stunt future job growth or raise consumer prices," NBGH President Helen Darling said.
Under the new program, physicians would receive incentives for activities such as following up with patients who have been referred to other physicians, tracking laboratory tests and flagging unusual results, and following medical guidelines to treat different health conditions, according to the Journal. Participating doctors could receive about $125 per patient and a maximum of $100,000 in annual bonus payments. Part of the purpose behind the bonuses is to help physicians cover the cost associated with improving care, such as setting up an electronic health record system, according to the Journal.
In the frenzied atmosphere following deregulation, schemes began to offer something new: a medical savings account not tied to any particular employer and coupled with a high deductible insurance plan. But, at first, not everybody could join. Those with a high risk of claiming benefits—generally, people over 55—were barred from participating. The result was an unprecedented restructuring of the insurance market. The young and healthy migrated to the new consumer-driven plans and away from traditional employer-based schemes. Meanwhile, the old and infirm were left in traditional insurance schemes. Discovery Health, the pioneer of consumer-driven plans, grew to become the largest medical-scheme administrator in the country. (Through a subsidiary called Destiny Health, the company is now active in the United States.)
In at least one way, the plans have been a success: They are enormously popular, a phenomenon the insurance industry attributes to people’s preference for managing their own day-to-day medical expenses. Additionally, the costs for visits to general practitioners, which are typically paid out of medical savings accounts, have been held somewhat in check. These two factors have led conservative and libertarian groups in the United States, such as the Texas-based National Center for Policy Analysis, to write glowingly about the South African experience.
At a macroeconomic level, however, there is less cause for celebration. Private health care costs have hardly been contained. In fact, the opposite is the case. Between 1996 and 2001, the cost of specialty care increased 43 percent, and the cost of hospital care rose 65 percent. This represents a marked increase from the inflation rates for the five years prior. There have also been substantial increases in plans’ administrative costs (which include profits). Meanwhile, the number of South Africans lacking health insurance—which is the bulk of the population—has continued to grow rapidly. Consumer-driven health plans have also done too little to address South Africa’s most pressing health problem: HIV. Before this year, many medical schemes covered only badly needed antiretroviral treatments as part of their medical savings accounts, and they stopped providing the treatments when funds dried up. (In January, the government mandated minimum coverage for HIV.) ...
The South African story, then, is a move from a noncompetitive insurance environment to a competitive one, but the competition wasn’t by hospitals to provide the best or cheapest care, but rather among insurers to get the healthiest patients. Consumer-driven plans are central to this process, because they are ideal for “risk-selecting” the young and fit, who have flocked to the new plans. Not in need of expensive medical care, the healthy could watch their account balances grow, leaving the truly sick behind in traditional plans.
This particular type of competition—to attract the healthy—in turn led to price increases, because insurers had little incentive to control the prices medical providers charged. After all, it was no longer their problem. It was up to the patient to worry about costs, and the patient hardly had the same bargaining power as the insurers once did. According to a key South African regulator, Alex van den Heever of the Council for Medical Schemes, “Competition based on the shifting of risk and cost to members only reduced the incentives of health insurers to directly manage health care service providers.” ...
South Africa’s experiment with consumer-driven health plans raises important questions for policymakers in the United States currently contemplating widespread implementation of health savings accounts. It suggests that such accounts can indeed foster greater competition and transform a health system—but not in the ways their proponents intend. Partly in response to the troubling health care trends brought about by the dominance of consumer-driven medical schemes, South Africa is now in the process of re regulating the health care industry and moving away from medical savings accounts. South Africa gives us a chance to look before we leap—and hopefully step back from the edge.
Executive management has clearly blown this. Think about it. They had to have known there would be a negative backlash on the part of the employee's. But what they clearly did not foresee was the extent or size of the backlash. (Just as they failed to foresee size/scope of the negative reaction to the cash balance pension plan conversion of 1999) If Sam's business acumen was so poor as to not be able to foresee how big the backlash might be, then just how much confidence should we employees have in his ability to use sound reasoning for ANY decision he might make? -Anonymous-
This is nothing more than the first step in a pay cut. Previously I’ve seen the same action taken against another teams at the site I worked. They were given the ‘reclassification’ speech, how this would really benefit them and help contribute to a work life balance. Then after 3 months they were told overtime was frozen and could no longer work OT to supplement their paycheck and the work that they were doing was now being down by overseas workers. This is just IBM long term strategy to implement pay cut and motivate people to move out of the company. Additionally when my first line manager said it would not be a net reduction in pay if I worked my 10% overtime. I challenge him with this past history and he told me that “it’s a possibility”
Oh last though, even if IBM sticks to the story that OT will not be frozen it’s still a pay cut as you can’t claim overtime or time and a half for weeks where you take vacation or that have a holiday. So for example in a week where a holiday is observed I would work 32 hours (8 per day) if four day, and if I claim my 4-5 hours extra they would be paid at straight time now instead of OT because I didn’t work more that 40 hours. This is a net pay reduction of $100 dollars for me, multiply that by the 10 IBM holiday and you vacation days and personal choice days and it adds up. -Going_going_gone-
Fact is, the writing is on the wall. Unless you are at the top - nothing and nobody matters in IBM. I honestly wish that Sam's parents were alive to see what a disappointment he has become. He has put aside everything they probably ever taught him for the dollar. Too bad he spends so much time trying to impress the folks he surrounds himself with (and Lord knows this is the most isolated person within the entire IBM company), instead of putting his talents to work to make our overall IBM world a better place.
He has and will always live in Gerstner's shadow. Not that Gerstner was a great man by any standard. At best he was a cold hearted heathen that gave the word "self" an entirely new meaning. Damn shame Sam. Rather than leaving a legacy of the things you could have done, you took the easy road and turned your back on your company, your country, your values. With the Almighty as my witness, I would not trade places with you for anything in the world. Unlike you, I stand for something other than self. -It is just this simple-
My last year at IBM saw me under different management and LEAN. That was definitely a HUGE wakeup call for anyone involved. My management was hideously ignorant and in denial. Learning how to read the tea leaves on my own signaled me to get out before it went sour. Boy - did it ever and I'm glad I'm out. I wasn't part of the lawsuit at the time because I didn't think it applied to me - in retrospect, I should have been. If you adopt the "don't rock the boat" or "serve without question" attitude like J.D. below, you might as well be reclassified as Big Blue Sheep. Stand up for what's right and make a difference rather than just come here and vent. Venting is good - but put it to work. SIGN THE PETITION! -Not Surprised-
I worked for an Aerospace company for over 14 years before getting involved with this IBM mess. That aerospace company back in 1979 that hired me knew how to classify people correctly (salary exempt) and when you had to work OT it was paid out to you as time-in-a-half or double-time. I don’t know where IBM missed the boat but now we are those sacrificial lambs. am sure it was not from the lack of examples out there.
When I was outsourced to IBM 5 years ago we were all told that it was mandatory for us to work 4 hours of overtime. If we did not it was reflected in your PBCs. Now IBM wants to cut our pay by 15% and tell us now that we were never told OT was mandatory.
We see IBM with record profits last year and billions of dollars in cash and I can say now we are seeing‘Unadulterated Greed’ on IBM’s part. We as employees are an expendable resource to IBM now and just a means to a goal to keep those profits rolling in for the shareholders. Wonder what rabbit they will pull out of the hat next year after we are all gone? IBM executives just hammer on us all the time about ethics and code of conducts, I wonder if the same ethics applies to them? I am sure this is illegal what they are doing and we are not stupid IBM! -rael-
Sam, people are furious. The mood among my peers is very ugly. With the possible exception of two kooks out in the Poughkeepsie warehouse, nobody gives a flyin' flip about anything.
You wouldn't believe the comments I've heard come out of the mouths of longtime employees that at one time in their careers would give their all for IBM. I've heard things like" Oh, I'll get my money, one way or the other. It'll either be the easy way or the hard way, but I'll have my money!" Sam, if you knew these folks like I do, you'd be shocked to hear THEM say such a thing.
Like me, they have absolutely no intention of following your lead. It's all about ME now. Ask yourself this: Why would they or why should they have any confidence in your leadership when you clearly blew it by making the decision to go ahead and cut pay by 15%?
So Sam, be smart. Own up to the fact that IBM made some basic mistakes in the past, but those mistakes aren't the people's fault, and they should not pay the price for them. Cutting pay just compounds IBM's initial mistake! Don't do that!
People respect someone who has the courage to admit they made a mistake. Admit IBM was wrong, and that it was a poor decision to cut pay, and reverse it! You'll be glad you did. If you can't or won't, do everybody a favor and resign. We'll be glad you did! ;-) -Anonymous-
The following may sound like sour grapes, but so be it. It's true. In my former department, we had two people who carried the place. They sacrificed for the team, even to the point of loosing shift differential and OT pay in order to take a leadership role. It was well known to everyone. We also had a young lady whose relative contribution would at best be middle of the road. She 'hid out' on night shift, missed work frequently, regularly came in late/left early, abandoned her team on day shift, where she was most needed, in order to draw night shift differential, and worked the least challenging accounts even though she had more tenure than the majority of her team mates.
Come PBC time, her manager overlooked the two who were carrying the place, and gave the 1-PBC rating (she was allotted one PBC-1 rating) to the night shift operator. Her relative contribution? She helped drive up the diversity numbers. Disgusting as this may sound, it's a true story and a way of life at IBM. -Anonymous-
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