IBM’s Plan to Lower Professional Salaries
by Anonymous

The Alliance@IBM has recently received information about IBM Global Services’ AMS organization’s plans to reduce professional salaries. Managers are already working on evaluating each employee’s job responsibility and deciding whether to put them into a lower band job.

According to the internal documents, employees are to start hearing from their managers whether their job is affected, starting February 2.

The objectives of the program are to “classify employees in correct position code/band/job family”, and to “reshape the IGS organization to more of a ‘pyramid’ shape versus the existing ‘diamond’ shape”.

This reference to a pyramid is a picture of the numbers of people in bands 6 through 10. At present, of all employees in AMS, most are in the middle bands, with fewer at the top and bottom (the diamond shape). If the objective is to go to a pyramid, that means IBM wants more lower-band employees, with fewer in the middle, and even fewer at the top.

Several “potential required compensation actions” are outlined for managers. If an employee’s base pay does not exceed the market pay range maximum of the new job, then no action is required. However, if the employee’s base pay exceeds the market pay range maximum for the new job, then the manager must lower the employee’s pay to the maximum, with a limit of 10% of the employee’s base pay. In addition, the manager can give no pay increases until the pay is within market pay range of the new job.

While a 10% reduction in pay doesn’t sound as alarming as it could be, remember that other forms of compensation will be affected as a result - variable pay, pension contributions, etc. In addition, future raises will be smaller because of the higher position of the employee in their new salary pay range.

Once again, IBM management meets in secret to plan reductions that hurt loyal and hardworking employees. With a union contract, these changes would have to be negotiated with the union and employees would vote to accept or reject the changes.