4 ms·

I get what you're saying, it seems that the opposite approach was used. Because of the higher expectations and compensation (higher pay grades got extra stock c

I get what you're saying, it seems that the opposite approach was used. Because of the higher expectations and compensation (higher pay grades got extra stock compensation per year) workers who underperformed at this high level were more vulnerable than those with lower grades.

whatshisface 8y ago
But the thing is, if you are paying everyone the right amount, a low-performer at 200k/year (who might be delivering only 220k in value to the company) still implies a lot more performance than a low-performer at 50k/year (who is delivering 55k in value). If a layoff predominantly targets highly paid employees, then either 1. you are assigning raises incorrectly, 2. the performance reviews have a systemic error, or 3. your layoff program is irrational. I guess this boils down to a critique of constant yearly raises, if it's true that everyone's pay always creeps above their performance with time.
- 40acres 8y ago
  Agreed, this criteria and execution of the layoffs were widely criticized throughout the company, points #2 and #3 were a major source of tension between workers and management in the following months. If anything I assume that due to the sheer amount of folks that were laid off (around 10,000), and the fact that layoffs affected every business unit, a truly effective way of executing the layoff was close to impossible.
- pessimizer 8y ago
  Or 4. the definition of an older worker is one who won't be overworked and underpaid i.e. more market-aware. Homo Economicus is the limit of an actor as its information about the market approaches infinity; the information asymmetry between IBM and recent college grads is vast, and starts narrowing as that grad ages. So IBM catches applicants who are making their most rational decisions based on limited information (irrational ones), and fires them when they become more rational. Government regulation attempts to compensate for that.
- dmurray 8y ago
  > a low-performer at 200k/year (who might be delivering only 220k in value to the company) still implies a lot more performance than a low-performer at 50k/year (who is delivering 55k in value). It's irrational to lay off either of those employees, and unrealistic that your low performers are all bringing more value to the company than you pay them for. More realistic is that the low performer on 200k is bringing 100k of value, and the low performer on 50k is bringing in 25k (or 0, or -25k...in either case it makes more sense to let the higher paid one go). You might say, you've been irrational in hiring these guys at all, and certainly in paying them that much. But maybe they were making money last year and the marketplace changed - the irrational thing is that it's generally impossible to cut salaries and better to make 10% of your workforce redundant than to pay them all 10% less.

whatshisface 8y ago

But the thing is, if you are paying everyone the right amount, a low-performer at 200k/year (who might be delivering only 220k in value to the company) still implies a lot more performance than a low-performer at 50k/year (who is delivering 55k in value). If a layoff predominantly targets highly paid employees, then either 1. you are assigning raises incorrectly, 2. the performance reviews have a systemic error, or 3. your layoff program is irrational. I guess this boils down to a critique of constant yearly raises, if it's true that everyone's pay always creeps above their performance with time.

40acres 8y ago
Agreed, this criteria and execution of the layoffs were widely criticized throughout the company, points #2 and #3 were a major source of tension between workers and management in the following months. If anything I assume that due to the sheer amount of folks that were laid off (around 10,000), and the fact that layoffs affected every business unit, a truly effective way of executing the layoff was close to impossible.
pessimizer 8y ago
Or 4. the definition of an older worker is one who won't be overworked and underpaid i.e. more market-aware. Homo Economicus is the limit of an actor as its information about the market approaches infinity; the information asymmetry between IBM and recent college grads is vast, and starts narrowing as that grad ages. So IBM catches applicants who are making their most rational decisions based on limited information (irrational ones), and fires them when they become more rational. Government regulation attempts to compensate for that.
dmurray 8y ago
> a low-performer at 200k/year (who might be delivering only 220k in value to the company) still implies a lot more performance than a low-performer at 50k/year (who is delivering 55k in value). It's irrational to lay off either of those employees, and unrealistic that your low performers are all bringing more value to the company than you pay them for. More realistic is that the low performer on 200k is bringing 100k of value, and the low performer on 50k is bringing in 25k (or 0, or -25k...in either case it makes more sense to let the higher paid one go). You might say, you've been irrational in hiring these guys at all, and certainly in paying them that much. But maybe they were making money last year and the marketplace changed - the irrational thing is that it's generally impossible to cut salaries and better to make 10% of your workforce redundant than to pay them all 10% less.