IBM Pay for Skill, Performance, Retention, Merit?

By a North East IBM employee


Do you ever wonder why we have been "unofficially" told not to talk about our individual pay with our IBM peers? One would suspect IBM would not want "sour grapes" to spread, when employees discussing salary and hourly pay, find out that two or more people with almost identical skills, experience, performance and appraisal, find out their pay is a few dollars less per pay period than a colleague. In fact it could be a FEW HUNDRED dollars per pay period difference!


Before the "dot com" era in the early 1990’s IBM was secretive about employee pay: managers had access to pay scales and grids but employees did not have the "need to know". In the 1990’s, probably forced by the "dot com’s", IBM finally divulged pay scales and salary ranges with its employees.


Now it appears IBM is going back to the era when they did not openly discuss pay, market pay and pay relation in regards to "midpoint" in particular. One can easily get the impression if you can’t get this information about pay that was previously made available to you, then what is the reason now? Perhaps IBM is not reviewing your pay properly and you are not being treated equitably in pay for your skills, performance, retention, and merit. Not being paid equitably can affect an employees’ entire IBM career. Perhaps the current IBM employee pay system is seriously flawed and needs a review of its equity treatments. This can certainly be the case.


For example let’s suppose an employee began an IBM career more than 20 years ago as a non-exempt (hourly) worker. Let’s say the worker truly believed that even an entry level position in IBM was a great opportunity to start a career and build pay based on working hard, acquiring skills, gaining knowledge, and being a "team player", to get good appraisals to open doors and grow one’s career. Trusting that while building his pay level he would eventually be at or above pay of those that might have started as a professional hire or exempt employee. This employee believed it was not only possible but would be a lasting reality.


But when this employee advanced in his/her career something not so funny happened.

This employee went from non-exempt (hourly) pay to an exempt salaried (non-hourly) pay when he/she got promoted in IBM. Since the employee started with a low base pay from his/her days as an hourly, low band or level employee the exempt salary was on the lowest end of the band or level pay range even with above average appraisals. The pay increases never reflected that this employee was doing the same job as someone who was fortunate enough to start with a higher base pay. Instead of pay being made "equalized" or equitable, this employee got "standard" raises and was told by management  "I have some good news and bad news for you. The bad news is your pay is so low you basically have fallen out of the "lowest pay quartile" and you have to now get a salary increase to get you back into the pay scale or grid."

 One would figure that moving up in your career should only lead to mostly positive news!  Not news like this!


Then through the years this employee would hear around performance review and pay discussion time that his/her performance is just fine and still at least above average but "in regards to pay you have a lot of room for growth in your pay scale. This is actually something good. This means that you should be able to continually get decent yearly salary increases". 


Now today this employee hears that "your pay is still below market for what you do and offer based on your skills and overall performance but we can’t give you a decent raise to help you: there is hardly any money in the pay plan for ____  (fill in the blank for the year)"


 Unfortunately the "not so yearly" (if you are even fortunate to receive one) IBM raises based on this employee who continues to grow his/her skills and maintain good or above average performance with at least a PBC "2 and 2+" appraisals, is still paid way below market rate!! So how can this employee still believe there is equity in IBM’s pay philosophy anymore?


This employee also knows of his/her colleagues that might be a band or two lower, with similar or identical skills, performance, merit, job scope and responsibilities, yet these lower band colleagues have higher pay and in some cases substantially higher.

How come the higher band employee will never see their pay "caught up" or "equalized", or made equitable with their peers? How come this employee is not the exception but is probably the rule now in IBM?


If this employee sounds like you it probably is! You have joined a growing "club"

A case in fact, the employee example in this story is the writer of this article


Now with employees being "re-banded" (no, not promoted! IBM seems to consider the "re-banding" practice not a demotion but a "reclassification"!

Re-banded down is not an equitable way to handle an employee’s salary based on this situation!


If pay should be a motivating factor to an employee, then why does it seem it is not?  IBM claims they pay to "attract and retain" and they "differentiate strongly" in regards to pay. With continual loss of benefits, and the generally small, if any raises for some, and IBM employees leaving due to their pay, how interested is IBM in RETAINING its hard working and performing employees? Are these non-equity practices what IBM means by "differentiating strongly" in regards to pay based on past and present skill, performance, merit, and retention?


What can be done to help IBM pay more equitably in this situation? A thorough review and overhaul of the IBM employee pay system should be done: a frank, honest, openness in regards to employee pay treatment and guidelines is in order.


Employees in other companies have found that with collective bargaining rights that they secure with a union contract they can work together with the companies they work for to get the pay equity and fairness they are looking for. Pay scales and re-banding issues would be items that must be negotiated and never presented to employees as a "take it or leave it" issue.


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