On Mon, 28 Jan 2008 21:06:21 -0500, Arthur T. wrote:
> Many companies abuse their salaried workers by
>increasing workload until many extra (unpaid) hours are
>needed. Those 7600 folk are being "punished" by *not*
>making family-killing demands on their time?
No, but every one of those employees who had achieved a work/life balance
that contained less than 5 hours of overtime a week have to now *start to
make family-killing demands on their time* to break even on weekly take home
pay. To achieve equivalent total compensation is likely impossible, there
will not be enough overtime hours to do that.
They've now lost:
1) Their salary potential for any week where they take a vacation
2) Their salary potential for any week where there is a company holiday
3) Their bonus potential has been reduced by 15% (determined by base salary)
4) The magnitude of any raise has been reduced by 15% (determined by base
salary)
5) The value of certain benefits (e.g. disability, life insurance, 401K
match) have been reduced by 15%
Let's use some funny numbers and see what happens:
Assume an average "7600" employee was making $70K.
Assume an average 5% end of year bonus rate.
Assume an average 2% salary raise rate.
After the change, these employees are making $60K (well, $59.5K, but let's
not quibble over small change). Also grant that they all work the 5 hours
of overtime (however unlikely) to make it back to $70K, so off the top, the
weekly payout doesn't change for IBM.
At the end of year 1 the bonuses for the employees at a 70K salary would be:
$26.6M, at 60K salary: $22.8M (savings: $3.8M)
At the end of year 2, the 70K employees would be making 71.4K, 60K employees
only make 61.2K. End of year bonus differential grows to almost $3.9M.
These numbers don't include the reduction in cost to IBM for the other
benefits (disability, life insurance, 401K match, etc.) which all have
equivalent reductions, as they are determined by base salary.
>
> Forcing a company to pay for the amount of time
>required can help them decide that they're understaffed and
>need more people. It definitely tends to keep them from
>overworking their existing employees. ("Tends to", not
>does.)
Yeah, right. I have a bridge for sale, you sound like you're in the the
market. More than likely, the boss will lower appraisals in direct
correlation to the number of overtime hours worked. "Sally got her stuff
done in 5 hours of OT/week, you needed 10. Therefore you are a lower skill
than Sally."
>
> Some of those 7600 undoubtedly would rather be
>overworked rather than underpaid. Some would not.
Non-sequitur.
> Many years ago, my father considered changing
>jobs. At his interview, he was told that they couldn't
>match his current base rate, but he could have all the
>overtime he wanted. Recognizing that money isn't
>everything, he opted to stay where he was.
Your father got to make the choice. These folks did not.
You have to consider all of the ancillary effects of such a company action.
IBM saw a legal means to grab money back from its employees. No different
than when Gerstner looted the pension fund. IBM was sued and settled ...
ergo they were culpable for bad behavior. Here, IBM was violating fair
labor laws. IBM was sued and settled ... ergo culpable for bad behavior. A
company which takes actions that it knows are going to piss off *customer
facing* employees is, for all intents and purposes a company that has little
regard for its customers.
Unhappy customer facing employees take it out on the customers, generally
not in an overt way, but schedules elongate, phone calls don't get returned
so quickly, 15 minutes of overtime turns into an hour, which turns into real
dollars for the customer, especially if the problem is, say, a hardware
outage on a hot weekend at your favorite retail store and the cash registers
go down...
SB
http://www.cxoamerica.com/pastissue/article.asp?art=25417&issue=141
"when asked how he measures his companys success, IBM Chairman and CEO Sam
Palmisano said he monitors four measurements. In addition to market share,
consistent financials and being a valuable corporate citizen, Palmisano
includes attrition rates and being an employer of choice. People want to be
here and want to make a big difference, he says."
And these 7600?
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