Conference 7.286::digital

    
    Our manager told us the same thing yesterday. Same rule as last year.
    On a per/CC basis, only 80% will "participate" (ie, get raises) in
    calendar 1991.
    
    Should I post my salary planning diatribe here, or is this already
    discussed elsewhere?
    
    
                                                                

    Yes, I got hit with that ... there were 5 of us engineering techs. 
    But 3 of them had been promoted the previous year and were still 
    below the entry level pay scale.  So regardless of the rating level 
    I have to wait 3 years to take part.  
    
    Everyone getting even a little bit of the pot would be more fair than 
    any one person having to wait 3 years unless, of course that one person 
    was a poor performer.  
    
    

    We've had 80% participation for several years now. As long as the group
    it pertains to is sufficiently large, it's not that big a problem.
    People near the top of their salary ranges can be pushed out 3+ months
    and out of the plan as well as poor performers. The intent of this was
    NOT to reward 80% of good performers! That's what makes it very
    difficult to implement in some situations. However, in reference to
    (.-1), there are other compensation guidelines regarding promotions. If
    someone is promoted and finds their salary to be less than the low end
    of the new salary range, that is supposed to be "fixed" within 3
    months.
    
    Doing 100% participation would mean giving the best performers pretty
    lousy raises with a small differential from the poor performers. I
    don't agree that this is "better" and that everyone should get a raise
    every 12 months (although cost-of-living would be nice!). I don't think
    the 80% participation rule is a bad thing as long as the granularity is
    large enough to which it pertains.

>                      <<< Note 1279.2 by BTOVT::LANE_N >>>
>    
>    Everyone getting even a little bit of the pot would be more fair than 
>    any one person having to wait 3 years unless, of course that one person 
>    was a poor performer.

Hmmmm.... Fair?  To whom?
You describe an instance where 3 people were demonstrably below their
"fair" recompense (else they wouldn't have been promoted).
Is it "fair" to them to deny them their due?  (especially since they won't 
be getting all of their due regardless of how the too-small pie is split)
I don't know.  I'm not about to decide what's "fair" in this instance,
or even in the general case.  
Who can ever answer the question of who's more deserving?

- tom]

    I guess maybe I'm slow. Doesn't this 80% rule tend to rule out
    pay for performance? I mean if you have a great group of top
    performers (I work in one such) stretching out the review cycle
    for them seems to contradict the idea that they are paid for their
    performance. Especially if other groups are not stretched out
    longer.

    BTW, how could it work out more fairly in large groups? What's a large
    group? How many groups are there larger then 10-15 people? Or are
    you talking about groups as something other then the people who report
    to a specific supervisor? Is this rule not enforced that low? I somehow
    doubt it.

    			Alfred

    Re .5
    
    The 80% rule is in hardcopy and it is company wide. There are a set of
    overheads that all of us doing salary planning have seen. A lot of
    groups (including mine) will be having group meetings to explain
    how salary planning has been done. My group manager said that everyone
    should know and understand how the salary planning process is done;
    it should not be viewed as a secret process. I hope that other group
    managers are equally as far-sighted.
    
    One of the rationales for the 80% rule is to push out salary increase
    frequencies beyond 12 month cycles. If everybody hot hit equally you'd
    see that everybody got a 15 month hit (100%/80% * 12 months). But this
    year there is no metric on raise frequency, the hard metric is on 80%
    participation. My guess is that this 80% metric will extend into
    further years. Now those groups who did a bad job of salary planning
    last year ie those that didn't extend frequencies beyond (12 + 6 month
    freeze) for those that still fell in the calendar 90 plan will have had
    problems this year in meeting the 80% metric because they will have
    found no people with raises in late 90 who could be pushed out to 92
    for the next pay raise. Note that you don't just take the 20% of people
    whose last raise date was Oct-Dec 90 and push them into 92. You look
    for people who are already fairly paid in their ranges, relative to
    performance, and push them out to 92. This implies some people
    will end up with 21 month+ raises. Others who are grossly underpaid may
    well get a 9 month hit. Note that if managers give all people left in
    the calandar year 91 plan a 12 month hit they are just digging
    themselves a hole for next year. Those that did a good job of last years
    salary planning have had an easier job this year.
    
    Regarding the 80% metric. Some people have compained that it unfairly
    hits small groups of top performers. This is not really true. The 80%
    metric has to be hit at a very high level in the company ie where the
    bucket is scores of employees. Anybody that maintains that all their
    120 employees are top performers and therefore have none who can be
    pushed out to 92 in my view is an incompetent manager. On the other
    hand if you have say 6 employees you just have to negotiate your case
    with your peers at the next level of management up where the bucket
    becomes larger.
    
    By the way there is an even bigger emphasis this year on putting
    peoples ending salaries at the appropriate place in the pay range.
    The appropriate place is defined by their performance against the
    whole job. This means that a 1 rated Senior Software Engineer at 80%
    of his pay range may well get a a much lower percentage raise than
    a 3 rated Senior Software Engineer at 5% of his pay range.
    
    There are detailed guidelines on the salary planning process that have
    been given to managers and supervisors. I encourage everyone to ask
    their management for access to that information. Don't be fobbed away
    with the answer that it doesn't exist, it does, and in my opinion it is
    managements responsibility to share it with their employees. Our group
    will be using a group meeting for sharing this information. Other
    groups may choose other mechanisms.
    
    Folks, from what I have seen the company takes salary planning very
    seriously and has set up what I consider to be a very just system for
    setting salaries to match the level of contribution that an individual
    makes to the company. Now some managent teams may not implement the
    planning very well but I can tell you that our team tries to do the
    best job we can within the financial constraints that the company quite
    reasonably has to impose. Now you may think that here is some bozo
    company-speak manager spouting the company line who just backs any
    company policy right or wrong. Well I just refer you to some of the
    notes I have written in this file and others!
    
    Dave, noting from home on a mandated holiday for Americans to give
          thanks to/for something or other! Why anybody would want a
          2 day holiday at the end of November I don't know. A good
          opportunity to catch up on my schoolwork before the end of term,
          I guess.

    May not be company wide Dave, I've not seen this in the UK.
    
    
    /andy/

    Re .7
    
    My apologies Andy I meant to say. "US Digital wide". I'm dreadfully
    embarrassed, I'm usually the first to rail at a certain segment
    of the world's humanity that believes the world lies west of the
    Atlantic and east of the Pacific. You're right pay policy is on a
    country by country basis.
    
    Dave

    re .6

    >By the way there is an even bigger emphasis this year on putting
    >peoples ending salaries at the appropriate place in the pay range.
    >The appropriate place is defined by their performance against the
    >whole job. This means that a 1 rated Senior Software Engineer at 80%
    >of his pay range may well get a a much lower percentage raise than
    >a 3 rated Senior Software Engineer at 5% of his pay range.

    I have been told the same and I have a hard time seeing the rationale
    for this. If I, by working hard the previous year(s), end up at the
    high end of my payrange then I'm now going to be penalized for that?
    As I'm seeing it, I got the the high end of the range by "Pay for
    performance" and if my performance still is the same now I'm suddenly
    going to get a lower increase! And a 3 performer is actually going to
    get a higher rise just because he is a 3?

    This gets worse and worse....

    Peter  

    Re .-1
    
    You don't get paid relative to how hard you work. You get paid relative
    to the value of your contribution to the company. Sometimes these two
    things correlate sometimes they don't.
    
    If you're at the top end of the pay range for a job and you don't
    warrant a promotion then you can expect a very low percentage raise.
    By the way a consistent 1 performer who is at the top end of their
    range should warrant a promotion. My view is that if the promotion is
    not given it is often the case that their manager has overrated their
    performance. Maybe they're a 2 and not a 1. From what I hear some
    managers take the easy way out and give high performance ratings
    and low pay raises and then blame those low pay raises on the
    company situation. Whereas if those managers had made the hard
    decisions of truly distinguishing between the contributions of
    different employees and rated them accordingly, ie gave low ratings
    where warranted, then they'd find that the pay raises more accurately
    correlated with the ratings. Then they wouldn't have to upset their
    underpaid truly high valued employees.
    
    Dave
    
    

    A lot of the disagreements in this note seem to indicate that not
    everyone knows what "Pay for performance" means.  I'll be the first to
    admit, that I'm not sure what it means.
    
    Is it defined in any of the policy documents, etc?
    
    What does it mean to you?
    
    Bob

    RE: Pay for performance


    I know of a person, who transferred into "X" group in New England.

    This person through a very round about way, ended up getting caught up
    in the 80% rule.  Seems this group did a lot of outside hiring several
    years back.  People have stayed in that group and never transferred to
    any other section of Digital. Recently, within the last two years, the
    group did a lot of internal hiring. The one person I know found out
    they were the lowest level person in the group, but making almost 10
    grand more than their supervisor. Hence the 80% rule came into play,
    and this person was told they would NOT get a raise, because they were
    making more than they should for that job (never mind they were not
    even halfway into their salary range), and they (management) needed to 
    figure out a way to not give 20% a raise. This person has since found a
    new job within DEC.  But not before their salary plan had been totally
    screwed up, and they won't see a raise for only heaven knows when.

    But.. in the above, no matter HOW hard this person worked, how many
    long hours put in, how GREAT they were - they would have never of
    gotten a raise, because the supervisor made more.  

    Tends to make one think, that the pay-for-performance is out the window
    in that organization...  wonder how many OTHER organizations think like
    that one?

    Peter, you should know by now that you don't get paid what you are
    worth, you are paid for the job you do.  This company hasn't figured
    out that someone like you has skills that are hard to impossible to 
    find/replace.  Recruiting and measuring software technical people isn't
    like finding a widget builder.  Lots of companies fall into this trap
    and usually find out about it too late.
    
    Brad.

    Salary planning in Digital means loosing good people.

    I work in a field group which has done a lot of external hiring over
    the last year.  External hires are brought into the company at a market
    rate which is typically somewhere near the mid-point of their positions
    range (a 15K difference at the consultant level).  Existing Digital
    employees, who are currently contributing, often end up being paid
    significantly less than the external hires.

    People who can get more money and want more money leave Digital.

    Seems like any policy-conscious manager will handle the 80% rule easily
    in the long run.  If you have a group which performs well, hire on a
    number of poor performers.  You don't need 20%, just hire on 10%.  Don't
    give them raises, and as morale drops you'll pick up another 10% of poor
    performers who decide they'd rather not work over the weekend (or T-day)
    when the compensation is so messed up anyway.

    Hiring freeze?  No problem.  Just arbitrarily stop some raises.  The best
    performers will get the message an git while the getting's good, and you'll
    be left with a more "average" pool.

    In the long run, Digital will be a nice, homogenous pool of 80% average
    performers and 20% poor performers.  Nice to know we finally have a clear
    long-term vision...

    :-)

    
    RE: Last few...
    
    .13 hit the nail on the head! In any JOB you get paid for what the JOB
    is worth, not what you are worth.
    
    People, WAKE UP! You'll never get rich working in a JOB for someone
    else! That shouldn't come as a surprise.
    
    If you want to get paid what you're worth you have to be in business
    for yourself. If you're dissatisfied with the $$$$ you're making now
    then you need to change what you've been doing up to now. You might
    start by looking at alternatives for producing income. But you'll only
    do that if you're serious.
    
    So stop you're grousing about pay in here and DO something!
    
    If you want some alternative ideas, talk to me... I'm in charge of MY
    financial future... Not Digital, not my manager.
    
    

    It seems to me that the 80% rule can be defended as follows: The 20%
    who don't get a raise are quite likely to look around for another job.
    These bottom performers are much more likely to go looking than if they
    get even a small raise. Hence, the company acheives its goal of 
    "downsizing" without layoffs and is able to reward the remaining 80% better
    than if there were no 80% rule.   
    
    This is not to say that the 80% rule does not cause the sorts of
    injustices detailed in this note, but perhaps the overall benefits
    exceed the injustices.

    re .17:
    
    The 80% pay rule is a lame substitute for strong management that is
    truly willing to "pay for performance". It's a cop-out. Instead of
    "you're not getting a raise because you're performing well below
    expectations," it's "you're not getting a raise because of a company
    decree -- not my fault."
    
    Weak management is precisely why we have the 80% rule and the
    inevitable injustices it creates.
    

Some folks here seem to have missed the point. The 80% rule is a mechanism for
implementing an overall plan, namely to spread salary increases over a 15-month
cycle instead of the older 12-month cycle.  THAT'S NOT NEW!!! It's been around
for a long time. The "annual review", i.e. everybody at 12 month intervals,
disappeared more than 5 years ago.

It seems the real problem is that somebody figured out that with a 15-month
review cycle, ON THE AVERAGE 80% of the people get raises within a 12-month
window. Thus was born the "rule", which has now propagated into a hard and
fast standard instead of a planning guideline.

Originally, the rule never was intended to mean that the same 80% get all the
raises and that the same 20% get left out all the time. But everybody seems to
have developed their own opinion of what the it means - and I'm sure some of
those people mistrust their managers so they probably never asked for an
explaination.

re: .17 -- if the goal were to force out 20% of the people, then after 1 year
you would have 80% of your group left, down to 64% after 2 years, 51.2 % after
3 years, etc.  I don't believe there's some evil Macheavelian genius out there
dreaming these things up.  I believe it's one more arguably-reasonable idea
gone astray.

	/Marvin

    
    Re .19:
    
    If the objectives are so clear, and the rule so reasonable, then why
    are there so many interpretations? If you could state your sources for
    the intention of the rule, it would probably help a lot.
    
    Of course, it could be that a questionable rule was based on a
    questionable objective -- to push salary reviews out to 15 month intervals.
    
    There is absolutely no reason to force a 15 month salary planning interval.
    A 5% corporate average raise over 15 months is the same as a 4% corporate
    average raise over 12 months. So if we can only afford to give ourselves
    a 4% raise, why not admit the fact rather than stretching it out over a
    longer period to make it look bigger? (I know that compounding rules
    apply - we have computers to figure out the ramifications and adjust
    accordingly.) (Percentages chosen at random; your mileage may vary.)
    
    A 15 month salary planning interval is also at odds with the corporate
    policy on salary management. From the VTX ORANGEBOOK:
    
	Performance Assessment

	| Job performance is assessed at least once per year.  Because job
	| performance plays a key role in a salary review, a performance
	| review needs to occur before the salary review.

	Salary Reviews

	| A salary review is the supervisor's assessment of the appropriate-
	| ness of an employee's salary based on:

	|     *    Job performance
	|     *    Current position in the salary range
	|     *    Mastery of the whole job

	| The salary review should take place at least every 12 months and
	| should lead to a discussion between the supervisor and the
	| employee.  A salary review does not necessarily mean there will be
	| a salary action.

    The policy still calls for performance and salary reviews at least once
    a year. If the average salary action occurs at 15 months, one of the
    following scenarios results:
    
    	o  performance/salary reviews (which commonly are one and the same)
    	   are pushed out to 15 month intervals, which is counter to
    	   current policy and detrimental to morale
    
        o  reviews occur more frequently than is necessary, to fulfill
           policy requirements and at the same time provide timely input
           for salary actions, which is a terrible waste of management time
    
    If we really want 15 month salary action intervals, we should admit
    to the fact by modifying the copoprate salary policy to reflect that
    interval. Otherwise, we should place a pot of money on the table
    _yearly_, eliminate the questionable and confusing rules, and encourage
    people to make hard decisions that truly implement "pay for
    performance".

re: 20 (re: 19)

Oops,  I didn't mean to imply I KNEW the source of the 80% rule. I based my
"how we got into this mess" scenario on general knowledge and observation.

All your points are well taken.

I haven't looked a the Orange Book recently, but let's face it: not all 
managers live by the letter of the law.  Performance review and Salary review
are SUPPOSED to be separate; performance reviews are meant to be a time to
appraise and evaluate performance, provide career counseling, etc.  There are
all sorts of performance plans that have over time existed around here.  Anyone
else remember MBO (Managment by Objectives)?  But you're right, they do seem
to get lumped together.

Oh well, I have other windmills to tilt at so this is one cause someone else
will have to take on.

	/Marvin

    re .20
    
    	Well put, let's get back to calling a spade a spade. If you only
    can afford a 4% per year, then let's call it a 4% raise and not 5%
    at 15 months. I'd like to know that every year (ie: 12 months like the
    government wants their taxes paid in) I could count on some sort of
    pay raise of lack there of. I hate annual pay raises at 15, 19, 24
    months. Can I pay my annual taxes to the Fed annually at 19 months??
    
    Point #2. We are now the 3rd largest computer company, paying 50%
    industry standard pay. Think about that and see how long we remain
    at #3 before becoming #4,5,6,....
    	Greg
    
    

    The 80% participation rule may have made some sense at one time, but it
    doesn't any longer...not with reducing headcounts and moving people to
    where the work is. It's no longer the case where you can figure, on a
    gross level, that you have 20% people you can/should move out of a
    particular salary plan. I think the whole compensation philosophy needs
    to be revised and then STATED CLEARLY so that we can all interpret it
    the same way.
    
    By the way, my group has a unique approach (which I find ridiculous).
    Since "99.9% of the people are good performers," they're going to push
    EVERYONE out some number of months so that we're all penalized equally
    and fairly! Is this a DEC approach to problem-solving, or what?! What
    does this have to do with your performance and where you currently
    stand within your salary range? Nothing as far as I can tell.

    At an extended staff meeting I attended before salary planning
    started, we were told by the head of personnel here in Merrimack
    that, at least in our group, the guidelines were 70% participation 
    in a 15 month plan. Sure hurts after 21 months before the last 
    increase. 
    
    Linda