Lou Gerstner wrote, "People truly do what you inspect, not what you expect." … Lest we forget, these "inspection pages" exist because chief executives are "people" too.
Arvind Krishna: Employment Security |
|
|
Published July 22, 2021
|
Arvind Krishna: Employment Security
- Evaluating IBM Employment Security
- IBM Employment Security by the Numbers
Editor's note: It seems that too many authors, historians, and 21st Century IBM executives do not understand the difference between "job" security and "employment" security. The 20th Century IBM absolutely never promised "job" security. An individual's "job" was only secure as long as they performed. Opportunities were always available to try a new job, but fail at it and a person would not be fired, but returned to a job where they had performed.
Managers were pushed to their limits to determine if a person in a particular job was failing because of desire or ability. If it was desire, management was expected to create an environment that was conducive to inspire employee self-motivation. If it was ability, management was expected to put training in place or consider moving the individual to an area where they could perform.
This was a heavy burden on management, but it was part of the management "job." If a person couldn't do this job, they could expect to be removed from management and moved back to where they had once performed. Peter E. covers a time when he was given such an ultimatum by his employees' second-line manager in "A View from Beneath the Dancing Elephant."
If an employee had the desire and the ability to perform, and they performed in their job they were secure in their "employment." If a "job" ended, they could expect to be offered another job (possibly in another part of the country) and retrained if necessary, but they were again expected to perform to the highest standards in the new job. But, if an employee did not desire to work at the company or lacked the ability to perform . . . most of the time they would leave of their own volition because few are truly happy in a job they don't desire to do and/or have the ability to perform. There were always the few, though, that had to be fired. This too was part of the management "job."
These concepts were the foundation for building and maintaining a "tradition" of full employment. It is a common misperception that IBM had a "policy" of full employment. Procter and Gamble had such a "policy." IBM never did, but it was the strongest of traditions because it was based on the employees' trust that management would do everything possible before considering the "nuclear options" of layoffs, right-sizings, resource actions, or workforce rebalancing.
In the 21st Century, IBM is practicing "employment insecurity." It doesn't matter what job or how well a person performs in that job, layoffs, right-sizing, resource actions, or workforce rebalancing threatens "employment." An instance of how IBM's most profitable division with some of the highest-performing individuals in the corporation were impacted by a resource action is available on this website: [here].
Let's take a look at Arvind's performance in this area.
Managers were pushed to their limits to determine if a person in a particular job was failing because of desire or ability. If it was desire, management was expected to create an environment that was conducive to inspire employee self-motivation. If it was ability, management was expected to put training in place or consider moving the individual to an area where they could perform.
This was a heavy burden on management, but it was part of the management "job." If a person couldn't do this job, they could expect to be removed from management and moved back to where they had once performed. Peter E. covers a time when he was given such an ultimatum by his employees' second-line manager in "A View from Beneath the Dancing Elephant."
If an employee had the desire and the ability to perform, and they performed in their job they were secure in their "employment." If a "job" ended, they could expect to be offered another job (possibly in another part of the country) and retrained if necessary, but they were again expected to perform to the highest standards in the new job. But, if an employee did not desire to work at the company or lacked the ability to perform . . . most of the time they would leave of their own volition because few are truly happy in a job they don't desire to do and/or have the ability to perform. There were always the few, though, that had to be fired. This too was part of the management "job."
These concepts were the foundation for building and maintaining a "tradition" of full employment. It is a common misperception that IBM had a "policy" of full employment. Procter and Gamble had such a "policy." IBM never did, but it was the strongest of traditions because it was based on the employees' trust that management would do everything possible before considering the "nuclear options" of layoffs, right-sizings, resource actions, or workforce rebalancing.
In the 21st Century, IBM is practicing "employment insecurity." It doesn't matter what job or how well a person performs in that job, layoffs, right-sizing, resource actions, or workforce rebalancing threatens "employment." An instance of how IBM's most profitable division with some of the highest-performing individuals in the corporation were impacted by a resource action is available on this website: [here].
Let's take a look at Arvind's performance in this area.
Evaluating IBM Employment Security
How has Arvind Krishna performed in the area of employment security? It only took him a few months to announce employment cuts in the United States and by the end of 2020 he put in place a major shift of IBM's workforce out of Europe and Israel.
|
As shown to the right Just Capital gathered information about IBM's "Workforce Investment and Training." The corporation placed 783rd for "Job Stability," 475th for "Job Quality," and 133rd for "Career Development."
It is interesting to note that in 2020 it took 375,300 employees to produced $73.6 billion in revenue. In 1995, the corporation produced $71.9 billion with only 290,215 employees. The last time revenue per employee was consistently lower (in non-inflation adjusted dollars) was in 1991-92, just before the financial crisis of 1992-93. |
Arvind, as IBM's new chief executive, is not placing a priority on either "job" or "employment" security
|
Being of service or caring about stakeholders other than customers is sometimes confused with paternalism—especially when it concerns employees. When Watson Jr. talked about employment security, he did not view it as paternalistic but instead as a means of increasing employee loyalty, goodwill, and diligence on the job.
Watson Sr. summarized best this father-and-son view of paternalism and employment security when he told his banking peers, “In attempting to counsel or advise those whom we employ, we must not adopt a paternal attitude. … When independent thought and action should be the order of the day, employees resent an attitude of paternalism. It is a well-known fact, however, that an employee’s efficiency suffers if his mind is ill at ease, and that worry over financial troubles is one of the most powerful sources for the destruction of mental peace.”
Employee efficiency suffers when employees constantly worry about their employment security.
Watson Sr. was right.
Watson Sr. summarized best this father-and-son view of paternalism and employment security when he told his banking peers, “In attempting to counsel or advise those whom we employ, we must not adopt a paternal attitude. … When independent thought and action should be the order of the day, employees resent an attitude of paternalism. It is a well-known fact, however, that an employee’s efficiency suffers if his mind is ill at ease, and that worry over financial troubles is one of the most powerful sources for the destruction of mental peace.”
Employee efficiency suffers when employees constantly worry about their employment security.
Watson Sr. was right.
IBM Employment Security by the Numbers
- Krishna 2020 Employment: Down 2.2%
- Employment Forecast: Turbulent Worldwide Employment Thunderstorms with Localized Employment Tornadoes in the U.K., Europe, Israel and United States
- Krishna & Rometty 2012–20 Employment: Down 19.5%
- Krishna, Rometty, Palmisano & Gerstner 2000–20 Employment: Up 5.9%
- Phenomenally Higher Employment in Lower-Wage, Lower-Productivity Countries but Disastrously Lower Employment in Higher-Wage, Higher-Productivity Countries
