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IBM cuts pay by 10 per cent for workers picked for training

IBM cuts pay by 10 per cent for workers picked for training

IBM has initiated a new training program that will result in a 10 per cent pay cut for participating employees.

IBM has initiated a new training program that will cut the pay of participating employees by 10 per cent.

A copy of the September 12 memo, seen by Computerworld, was sent to IBM employees in its Global Technology Services strategic outsourcing group. The memo sent to affected employees begins by telling the worker that an assessment has revealed "that some managers and employees have not kept pace with acquiring the skills and expertise needed to address changing client needs, technology and market requirements."

It then tells the recipient that "you have been identified as one of these employees," and says that from mid-October through the end of March, "you will dedicate up to one day per week," or up to 23 working days total, "to focus on learning and development."

But IBM is coupling this training with a six month salary reduction. The key statement in the memo is this: "While you spend part of your workweek on learning and development activities, you will receive 90% of your current base salary."

Salary will be restored to the full rate effective April 1, 2015.

Asked about program, IBM spokeswoman Trink Guarino said the firm "is implementing a skills development program for a small number of U.S. strategic outsourcing employees. Under this program, these employees will spend one day a week developing skills in key growth areas such as cloud, analytics, mobile and social."

There was negative reaction from some IBM employees.

One IBM IT professional, who asked not to be identified, said he was "shocked" to be added to the list, particularly since his work has been consistently praised by managers.

By reducing pay "by a significant amount," IBM is acting "in the hopes that the employees won't be able to sustain that pay and decide to quit, exempting IBM from letting them go and have to pay severance," the employee said.

One source familiar with the program said the percentage of employees impacted is small, in the single digits.

While employees may see the pay cut as unfair, the salary reduction is viewed by management as a form of employee "co-investment" in training, and as a better alternative to laying off and hiring employees with the latest skills. It's not that these employees lack skills, but they don't necessarily have the ones that are needed today, the source said.

The Alliance@IBM has received complaints from its members, and shared some of the that reaction.

Wrote one employee: "I have spent the whole of 2014 improving my skills and my manager has reviewed and approved my 'skills Update.' I have received recognition this year for sharing my expertise and offered to be a mentor when asked. So just where are my skills lacking?"

Lee Conrad, national coordinator at the Alliance, a Communications Workers of America local, said that "IBM employees have no problem with learning new skills but to combine that with a salary cut is outrageous and unacceptable. IBM continues to drive morale and employee loyalty down with each new slap in the face like this," said Conrad. "IBM needs to be mindful of further demoralizing workers and adversely affecting customers," he said.

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