If my foresight were as clear as my hindsight, I should be better off by a damned sight.
If my foresight were as clear as my hindsight, I should be better off by a damned sight.
IBM Age Discrimination
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Published July 30, 2021
Updated January 6, 2022 |
Editor Update: The lawsuit that generated this article was most likely settled out of court. For the complete story read The Register article. Here is a short excerpt:
"The court order closing the case, signed on Wednesday by Judge David Ezra in the Texan Western District Court, cites a stipulation of dismissal by Langley and IBM. That suggests the two parties have agreed to settle confidentially out of court."
Is IBM Becoming a Cat's Paw Organization?
- A Quote from the Past that Seems Applicable
- The IBM Austin Age Discrimination Suit
- Summary of Events
- The Legal Concept of the "Cat's Paw"
- There Are Still Men and Women of Integrity and Character
- Fallacious Business Thoughts at the Highest Levels of IBM
- To Heck with Productivity
- This Author's Thoughts and Perceptions
A Quote from the Past that Seems Applicable
We want to see to it that while there is the restraint of abuses, it is persons who are restrained, and not unnamed bodies of persons [corporations]. There is only, historically speaking, one possible successful punishment of abuses of law, and that is, that when a wrong thing is done you find the man [or woman] who did it and punish him [or her].
You can fine all the corporations there are, and fine them out of existence, and all you will have done will be to have embarrassed the commerce of the country. You will have left the men [and women] who did it free to repeat it in other combinations [corporations].
Woodrow Wilson, Lecture at University of North Carolina, 1909
The IBM Austin Age Discrimination Suit
As the old decade came to an end in 2020, IBM was given its first new-year setback. The judge in Austin, Texas denied IBM’s request for summary judgement. They had fourteen days to appeal.
- Summary of Events
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This was an age discrimination case. A former employee was 59 years old when he was terminated after 24 years of employment. He was a member of IBM’s Hybrid Cloud business unit. The employee claims he was resourced because of IBM’s focus on hiring younger employees while laying off older workers and, in effect, he was fired because of his age. IBM responded that this was just another resource action like any other and that the criteria it used to identify this employee (and presumably all others) was “age-neutral.”
IBM asked for a “summary judgement” which usually occurs after discovery has been performed, facts have been agreed upon by both parties and one side believes that there is no need for a trial since the evidence is so one-sided that they “will prevail as a matter of law.” IBM basically believed they had proven their case in discovery, but the judge disagreed and wrote, “summary judgment in this case is not appropriate.” A nice flowing commentary and a few of the frustrations of the current court with IBM’s legal processes and gamesmanship may be read at: Langley v. International Business Machines Corporation. |
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- The Legal Concept of the "Cat's Paw"
Aesop's Fable of the Cat and the Monkey
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This is a fascinating legal term used in the document signed December 20, 2019 by Judge Andrew W. Austin, United States Magistrate Judge. The legal system recognizes that an employee may experience discriminatory intent, not necessarily at the hands of the “alleged” decision maker—who may have acted without any age-based animus, but from a person who was acting as the “cat’s paw” for another entity—who did have a discriminatory intent [see sidebar "Aesop's Fables"].
This was much more interesting than just calling it what it is: the first-line manager was a pawn—a person who was manipulated by others to achieve their ends. |
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In Virginia M. Rometty’s case, I thought more along the lines of the Wizard of Oz: “Pay no attention to that man [woman] behind the curtain.” Ultimately, the corner office pulls all the levers and distracts attention from the day-to-day dirty work being done by her human resources organization. She shouts magnificent marketing words about diversity over social media’s loudspeakers and sends up a smokescreen talking about IBM’s 20th Century noble past.
Meanwhile, older workers wish for a pair of ruby red slippers they could click together to take them back to Kansas: a time and place when IBM’s management “adjusted policies based on principles” instead of “adjusting principles to implement a policy.”
But not everyone is an automaton. One manager was known by her team for working the human resources system for years. She always had an “ol’ fart” lined up for the next resource action. She would in her yearly performance appraisals and development plans find someone who wanted to quit, take some time off, or retire.
One employee came out of his meeting saying, “I can’t wait for the next resource action. It is my payday exit.” He gladly took the next package—it was a retirement bonus. In this way she shielded most of her team for years from resource actions the others couldn’t afford. |
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Such examples are exceptions to the rule, though. She was an exceptional person who managed to get the chestnuts from the fire without burning herself. She outsmarted the human resources monkey until 2009.
Then the cuts were so deep that even she couldn’t protect her own [The Resource Action of 2009].
We all knew it wasn't her fault.
Then the cuts were so deep that even she couldn’t protect her own [The Resource Action of 2009].
We all knew it wasn't her fault.
Fallacious Business Thoughts at the Highest Levels of IBM
The following chart shows how IBM, even though its number one cost of doing business is its cost of labor, grew the number of its employees by 100,000 yet drove its profit productivity up ... but, unfortunately, had the opposite effect on sales productivity—driving it down.
Essentially, IBM traded in fewer, older, highly-productive—and therefore—highly-paid employees for more, younger, lower-paid—and therefore—low-productivity employees.
Essentially, IBM traded in fewer, older, highly-productive—and therefore—highly-paid employees for more, younger, lower-paid—and therefore—low-productivity employees.
IBM executives believe that people are interchangeable commodities where a high quantity of low-experience employees can easily replace a low quantity of highly experienced, highly-productive workers. Such thinking is best seen in Ginny Rometty’s concept of “collar” jobs that has resulted in “as many as one third of IBM’s employees having less than a four-year college degree.” These new employees need to be careful that their collar job doesn’t become a “choke” collar which the corporation is considering for the next quarter’s resource action. [See Footnote #1]
This chart shows the effect of an organization myopically targeting and jettisoning older, productive employees to raise short-term, quarter-to-quarter profits. Productivity improvements are the only long-term way to simultaneously increase profits, increase wages, lower product costs and improve product quality.
This chart shows the effect of an organization myopically targeting and jettisoning older, productive employees to raise short-term, quarter-to-quarter profits. Productivity improvements are the only long-term way to simultaneously increase profits, increase wages, lower product costs and improve product quality.
This Author's Thoughts and Perceptions
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IBM’s history of fighting age discrimination can be taken back as far as 1939 when Tom Watson Sr. in association with several members of the Sales Executive Club of New York founded the Forty Plus Club of New York. The chief executive was one of the founding advisory board members that also included individuals such as Norman Vincent Peale and Arthur Godfrey.
Corporations were exhibiting a tendency to refuse to hire individuals over 40 years of age, and this organization was a peer support group designed to find “old” men jobs in their field of expertise. |
Read ProPublica's "Cutting 'Old Heads' at IBM"
by Peter Gosselin and Ariana Tobin |
Tom Watson was 65 years of age at the time, and he served IBM for almost two more decades.
The 20th Century IBM was a corporation that paid for performance. The “human package” that the performance came wrapped in was of little concern. IBM today doesn’t hire managers to manage performance. The corporation’s human resources organization has been manipulating individual performance appraisals for decades to ensure finance can make its quarterly profit targets. Its human resource managers have malleable principles who enforce inflexible, rigid, quarterly financial targets, through a management chain full of cat’s paws.
IBM used to “pay for performance,” and it paid for this performance regardless of age. It no longer pays for performance but compliance, and its two-decade long drop in sales and profit productivity is the undeniable, long-term, proof point that it has cut loose its older, more productive employees.
Discriminatory and stupid, eh?
Cheers,
- Peter E.
The 20th Century IBM was a corporation that paid for performance. The “human package” that the performance came wrapped in was of little concern. IBM today doesn’t hire managers to manage performance. The corporation’s human resources organization has been manipulating individual performance appraisals for decades to ensure finance can make its quarterly profit targets. Its human resource managers have malleable principles who enforce inflexible, rigid, quarterly financial targets, through a management chain full of cat’s paws.
IBM used to “pay for performance,” and it paid for this performance regardless of age. It no longer pays for performance but compliance, and its two-decade long drop in sales and profit productivity is the undeniable, long-term, proof point that it has cut loose its older, more productive employees.
Discriminatory and stupid, eh?
Cheers,
- Peter E.
[Footnote #1] “IBM is building the future of ‘New Collar’ jobs with digital badges.” December 4, 2018, David Leaser [here].