Work Smarter, Not Harder--Unless Told To Do Both

Published: March 18, 2013

by Dan Burger

From one extreme to the other. Last week the came the news that Ginny Rometty, IBM's CEO, banked more than $16 million in compensation for her work guiding Big Blue in 2012. Rometty is an exceptional achiever. IBM grooms exceptional achievers. The company is good at that and the rewards, as you can see, are generous. At the same time, we got a glimpse of what it means to be on the fast track and how it feels to be treated like human capital. You either make money for the company or you're something that costs the company.

Rometty, who replaced Sam Palmisano as CEO in January 2012 and in October became chairman of the board, is a bargain compared to her predecessor. Palmisano received $37.1 million in his last year as the best-paid IBM executive. In the year before Rometty climbed to the top of the ladder, she was a senior vice president of sales, where the combination of salary and non-stock incentives brought her a little less than $5.5 million.

The average income of a CEO in the United States equates to the average income of approximately 300 workers. That ratio was one CEO to 82 workers as recently as 1980. Signing bonuses, exit packages, stock options, and other incentives are in place not just for CEOs, but for much of upper management. In many cases, financial rewards are not an incentive to do a good job. It's just an incentive to do a job. Whether executive (not just CEOs) compensation trends are necessary or appropriate is the subject of heated debates.

This article isn't about whether Rometty is doing a good job or whether IBM's return on investment is better or worse since she took over the leadership. Last week happened to be the week IBM (and other large corporations) filed--as required by law--the executive compensation packages paid to the CEOs. Google "executive compensation" and you'll find plenty of high rollers as well as companies that are in some hot water over how those packages were wrapped.

To add perspective to the compensation of top executives and the values they bring to IBM, there's reason to consider a letter written by an IBM Global Technical Services executive that also came to light last week. The letter apparently was meant to be an incentive to non-executive employees, but was called out by someone who took exception with the connection that was being made between hard work, the work-life balance, and achieving goals.

The IBM executive, Bob Hoey, a vice president of sales for the financial services sector, has a track record of successful executive sales jobs in IBM's Systems and Technology Group. Nobody questions how hard he works and as a sales executive he must constantly push sales higher in order to reach his goals. The other thing that nobody questions is that sales are rewarded by commissions, which are very lucrative. Sales goals depend to a large degree on support personnel, who often have an important role to play in customer satisfaction. The support staff gets a lot of pressure, but not much in the way of rewards. Hoey's letter to those who work under him questioned the work ethic of employees while pointing out that those who considered the work-life balance to be over-weighted on the company side were simply complainers and a impediments to achieving goals. Hard work, in and of itself, should be the incentive. His support for that was a reference to people in India, Brazil, and China who work longer hours (pretty well documented) without complaint (not so well documented), which sounds like outsourcing jobs--or planting that seed--is in the back of his mind and that he wanted it in the workers' minds as well.

The response to Hoey's letter claims he is insensitive to the reality of work-life balance and is threatening to those who dare allow life priorities, including health and family, to have an equal or higher priority than workplace. It implies that top performers and those who get promotions do not come from the life-choices side of the aisle.

The reaction letter, which was anonymous (probably a wise choice), also cited the "pick up the slack" effects of corporate downsizing, layoffs, and restructuring as reasons the work-life balance has already tilted the scales to the side of working harder and longer pushing the incidence of burnout higher, which results in physical and mental health issues, relationship problems, exhaustion, anxiety, and depression.

The idea of maximizing efficiency while churning through the workforce and planning for employee turnover, or possibly outsourcing jobs, may be financially rewarding for the top wage earners, but it makes a societal mess goes beyond the concerns (the complaints, if that's your point of view) of affected workers.

The letter from Hoey and the response to it can be seen in their entirety at www.endicottalliance.org, a website hosted by an IBM employees' organization known as the Alliance@IBM. Employees of IBM in the United States are not members of a union recognized by the corporation. Alliance@IBM states its purpose as supporting the "respect of individual employees and to make its voice heard by IBM management, shareholders, government, and the media."

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