Slashdot Mirror
GE Considers Scrapping The Annual Raise (bloomberg.com)
A user shares a report that details General Electric's rethinking of the annual raise. Bloomberg reports: "GE executives are reviewing whether annual updates to compensation are the best response to the achievements and needs of employees. The company may also scrap the longstanding and much-imitated system of rating staff on a five-point scale. Decisions on both issues may come within the next several months, spokesperson Valerie Van den Keybus said by phone." "We uncovered an opportunity to improve the way we reward people for their contributions," GE's head of executive development, Janice Semper, said in an e-mailed response to questions. It will involve "being flexible and re-thinking how we define rewards, acknowledging that employees and managers are already thinking beyond annual compensation in this space." In response to this news, ErichTheRed writes: First it was "stack ranking," the process where GE fires the bottom-rated 20% of the workforce every year. Now, a new HR trend may be brewing at GE that is destined to be copied by MBAs everywhere if it takes hold. Personally, in terms of cargo-cult HR trends, I'd take Google's open office nightmare over this one. What do you think this would do to employment stability if widely enacted? I can definitely see banks rethinking 30 year mortgages, for example...
"This will be great for employees" from the makers of Stack Ranking.
I bet real money the executive compensation packages will continue to grow unabated.
The cockroach that came up with this one will get an extra bonus for the year.
ELOI, ELOI, LAMA SABACHTHANI!?
The thing about performance appraisals is that they are a process. What is good about process is that while in many cases it's not required its good at rounding up the edge cases. It assures fairness in opportunity. Otherwise the squeaky wheels get 90% of management's attention. it is also a chain. It's a time when middle and upper management communicate about employees. it's a time when every employee gets time with the boss. All of these things of course should happen all the time but they can't. there isn't enough demand or time so instead we have to reserve time for it. Thus even though for most employees the process is perfunctory it's not perfunctory for everyone. Also you get surpises. You hear things you wouldn't have heard about aspirations and frustrations in these 1 on 1s because the framework of telling what you did the last year brings it out. It's a time when a manager can tell you that if you want a certain new job what you need to change to get it.
Some drink at the fountain of knowledge. Others just gargle.
Isn't it odd how every trend or "fad" in HR always seems to fuck over employees in some way?
Open office is seriously a plague on humanity. At least be honest that it's about cost, or to plump manager ego to see their little people lined up in one room, rather than blowing smoke up my ass about "collaboration".
Hey I'd be OK with this if they granted each employee proportion of stock ownership and eliminated the CEO and board can gave every employee representation on a democratic "leadership council" for big company initiatives.
Otherwise, look to see a mass exodus from GE - you have to have a raise/compensation system.
That's right, it's all about "being flexible and re-thinking how we define rewards." Scott Adams already figured out this system 20 years ago.
"I'm too busy to research this and form an educated opinion, but I do have time to tell everyone my uninformed opinion."
I asked my boss how he scored me 5 on our scoring system which is used to calculate our bonus. He admitted that he didn't do the scoring, and has no idea how the scores work. He also does not know who does do the scoring.
Needless to say I'm not the only person looking for a new job.
Many employees would happily forgo a salary increase over more vacation days, fewer hours or a day or two a week spent telecommuting, but I am kidding myself thinking that their driving factor is their employees best interests
Then they left to get another 5-10% at a new job down the street.
And we laid off the bottom 20%, leaving us staffed at 60% to do all the work.
WTF, and management wonders why we can't get anything done.
As for me? I'd be tempted to cross GE of my list of places to work, except they weren't on it in the first place.
Company loyalty is a two way street. Think of me having a bi-weekly contact at best.
Fine with me. I will be using ALL my sick days.
Also, I'm not taking calls after 5pm.
In at 9, out at 5, no exceptions.
No weekend work.
Every Year, my company laptop/desktop will have an "accident".
Spilling coffee on the keyboard will be a semi-annual event.
I will be actively enforcing software license management, I have the BSA's number on the speed dial.
I will telecomute on days when I feel like it, company needs be damned.
Back stab everyone on every team.
take credit for everything
save all blackmail material
study all the get ahead schemes
it's every man/woman for themselves.
GE broke with the most unethical sociopathic employees..
multiple product liability lawsuits with lots of "not me" finger pointing
someone steals millions of dollars thru an underhanded plan.
Executives vote themselves a bonus for having some cash on hand before bankruptcy filing.
Millions of people's retirement plans damaged by ownership of GE stock...
Some billionaire buys GE assets at pennies on the dollar and restarts company
(and hires NO ex-GE employees that worked for GE after 2017... The best employees will go find a better job quickly)
This is my opinion based on what little I know and understand of the rumors and lies Thanks, Randal
Exactly. Here is what happens to me in EVERY job with this review nonsense:
First year. Great review! You're a rock star. 5% bonus.
Next year: Good review. 4% bonus.
Third year: That guy's getting paid too much, find a way to screw him because he failed to read one e-mail, even though he saved the company millions. 1% bonus.
Find new programming job: 10% bonus.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
About 10,000 years ago, in Honors US History in High School, in scenic New Jersey . . . I had a teacher who we called "Smiling Jane". The 1800's in the US were full of nasty stuff, like children losing arms while trying to couple trains, the US Calvary giving smallpox infected blankets to Indians ("Casino Indians", not "Out-Sourcing Indians") . . . and if you get hungry for a hamburger during class . . . "The Jungle", from Upton Sinclair will transform your ideal of a Big Mac into a pile of weevils and maggots. At any rate, good old "Smiling Jane" would flash a rack of teeth during these lectures, that would put most of Hollywood to shame.
Put the absolute epitome, was her description of the "Molly Maquires":
https://en.wikipedia.org/wiki/...
In case you are too lazy to read the article, or didn't have Honors US History in goddamned New Jersey, the big mining monopolies created "mining towns" for poor immigrants (H1Bs?). They were not paid in US cash, but in "script" that could only be used in the stores . . . owned by the monopoly. Sound like Microsoft, anyone?
Smiling Jane flashed her rack during all of this.
At any rate, some of the enslaved created a group called the "Molly Maquires . . . they would relieve a foreman or a manager from his head, and dump it somewhere. A lot of these heads ended up in jars in the windows of funeral parlors, with the note, "Do you know whose head this is?"
Back to "Smiling Jane" . . . she went to a funeral in Eastern Pennsylvania, and told the funeral director her tale. The Director answered:
"Oh, yes, we still have some unclaimed heads in the cellar . . . would you like to see them . . . ?"
A fellow student suggested to me that we should beg, borrow or steal a black Cadillac, drive to the town, and scream, "Show us your heads!"
Getting back on topic, GE executives who rake in millions, while producing nothing of value . . . could in my opinion end up in a funeral parlor in Eastern Pennsylvania.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Make it a salary and bonus and stock cap of 20 times the earnings of the lowest paid contractor and that sounds fair.
Oh, you meant just for the 99 percent.
Never mind.
Light the torches, boys!
-- Tigger warning: This post may contain tiggers! --
Give me what I want and deserve or another employer will. That's worked pretty well for me my entire career. Sometimes they gave me what I wanted. Sometimes another employer did.
Reminding me to feel grateful for a couple percent you gave me at my formal review is annoying. I don't feel grateful. I feel like a cog in the machine.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
"We uncovered an opportunity to improve the way we reward people for their contributions," GE's head of executive development, Janice Semper said. "It will involve being flexible and re-thinking how we define rewards, "
Translation: We're always looking for new ways to screw our employees.
No. I thought so at first, but further digging, this makes a lot of sense and is something many companies and contractors have been doing for quite some time.
Typical negotiation with a potential employer (small/mid size company) goes like this. If the company cannot or does not want to give the salary being asked by the applicant, something can be negotiated, such as additional vacation time, or a larger 401K contribution.
I for one could be happier with an additional week of vacation over a 2-3% increase, every per year. Or additional personal holidays, or the ability to take every other Friday off (like the 9/80 programs many government contractors have.)
For single people I wouldn't recommend such a trade-off. You want to earn and save as much as you can when you do not have kids. Once you have kids (like myself), or have to travel abroad to see in-laws (again, like myself), or many other reasons, you might want to have additional vacation time. Not everything has to be a nefarious plot, even in cut-throat corporate America.
I wish I was just being bitter and cynical, but this just seems to be the pattern. Some of the jobs I plain quit, I didn't even hate the job. I would have been happy to stay there -- provided it didn't mean staying there, year after year, doing the exact same job with the same title for about the same money (or a "raise" that barely matches inflation). Not one effort made, not one single finger lifted to retain me as an employee, no matter how many compliments I got on my performance. Quite literally, talk is cheap. So I'd quit, everybody would act surprised, and I'd take my salary increase and my new title at another company down the road.
And it kind of boggles the mind. Imagine if the first company hadn't wasted all the years they invested in training me and me gathering institutional knowledge and know-how. All of that was investment. All of it cost money. And instead of using what they paid for, they let me walk away and apply my skills elsewhere, occasionally with the competition. No wonder they can't afford to give raises.
But that's not just one company, it seems to be every company now. It's the American way of doing business. Human capi^H^Httle management.
Breakfast served all day!
GE is considering replacing the ritual of an annual performance review with having managers constantly give employees feedback. That makes a lot of sense to me - praise or criticize performance throughout the year rather than keeping a file and trying to remember what exactly it was the employee did eleven months prior.
Second, they are considering something similar for pay increases - no reason to wait until the end of the fiscal year to give a raise. The top 20% will still be pampered, the middle 70% will hang around for a while until they get tired of lousy raises, and the bottom 10% better keep their resume up to date
In response to this news, ErichTheRed writes:
First it was "stack ranking," the process where GE fires the bottom-rated 20% of the workforce every year.
Erich has it wrong. Welch advocated trimming the bottom 10%, not 20%. And having worked for GE for several years, I can assure you that those who were let go were never missed. The bigger problem was the top 20% who got most of the raises - they were all either ass kissers, children of managers, or helped along because of their "diversity".
The biggest problem with firing the bottom 20% of your workforce every year is that you're always going to have a "bottom 20%" no matter how good your employees are doing. If 20% of your employees exceed expectation, 70% meet expectations, and 10% are below expectations, you're going to wind up firing 10% of your employees who met their expectations purely because you decided on that 20% number. It doesn't matter that they are perfectly good workers and do everything they're told to do competently, you committed to firing 20% of your workforce every year so off they go.
Meanwhile, you need to hire new people to fill those vacant slots in which case, you're likely not saving much in salaries. If anything, you pay more because you need to train the new staff with your systems/processes. And if the new staff takes too long to get up to speed, they might hit the bottom 20% and you'll wind up training someone new.
If you don't hire new staff, you're going to wind up with an ever-shrinking workforce both by bottom-20%-firings and by people leaving because they're sick of the ever increasing workload coupled with yearly threats of being fired if you land in the bottom 20% (despite having more work to do).
Having a set "we're firing this percentage every year regardless of how well the staff actually does" is an idiotic concept that was thought up my management who likely exempted themselves from winding up in the bottom 20%.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
So let me get this straight, GE is going to act like a startup to try and be hip and attract more young workers with flextime.
Here is the reality of the GE professional workforce, they work you like a dog. Offering flextime and more time off is a total ruse. Even if you take time off you will still be hounded by your peers and India to help solve IT, engineering, and production problems. The main problem at GE is that they have a mature bureaucratic culture full of kingdoms and each kingdom is chronically understaffed. I have several friends and relatives that work their and it is a pressure cooker. Casual overtime is expected and 24-hour access to you is expected.
So the reality is that GE is going to try to appear cool and offer undefined cool perks, which in reality won't actually be perks and the professional workforce will continue to churn and turnover.
From an economic standpoint, this will mean GE like other large companies will not be contributing to economic growth and promoting the global slowdown by effectively hoarding cash by not paying people. This is terrible economic news. I plan to cash out of the market before the end of June. It seems that GE is going to lead the charge to kill the slowly recovering economy. No cash for you, just undefined perks!
From my vantage point GE can't behave like a startup. This gimmick will end up as a bait and switch for young professionals. This is probably less about attracting people and more about cutting costs. Meanwhile their overworked professional workforce will continue to age while trying to support a massive amount of legacy systems and buracracy. Even with hordes of outsourced operations, GE still can't staff operations. Very sad.
Meanwhile, all the young folk are going to SpaceX, Google, Apple, Silicon Valley Startups, and back to automotive (Ford/GM/Tesla) to build the next big thing, autonomous vehicles. I am really looking forward to my electric self-driving vehicle!
For the Microsofters out there, how is Redmond doing on attracting and retaining talent?
Ha, getting stuff done at GE is a bureaucratic joke. It could take 6 departments in three timezones and 4 continents to provision, build, and build a simple database server. The bureaucracy is legendary and the kingdoms are well defended.
B. F. Skinner proved that when rewards are randomly given, it results in the development of superstitious behaviors. Whatever the animal happened to be doing when a reward arrived was mistakenly associated with earning a reward -- so that behavior is repeated over and over. And . . . it works! While performing the superstitious behavior, another reward (randomly) arrives -- success!
In addition, have you ever been to a seal attraction where you can feed the seals? The seals will vocalize, flap their flippers, and engage in all sort of antics to get your attention -- and to get you to fling a sardine to them. Then you run out of sardines and all of that seal behavior you were enjoying stops. The behavior stopped because the rewards stopped.
GE's new compensation system, therefore, will be for managers to continually fling french fries into the mouths of eager and motivated employees.
Are they doing away with the annual cost of living increases, too?
Getting ready for the new OT rules and the added pay for some people needs to come from some where.
Also this will help us get more H1B's that don't stand up for them self's.
"...he didn't do the scoring, and has no idea how the scores work. He also does not know who does do the scoring."
Translation: he gave you a zero.
Is it just my observation, or are there way too many stupid people in the world?
IIRC it takes about 150% of the annual salary of a typical white collar worker to train a replacement, plus the actual salary. So you're cutting 20% off the bottom, we presume you're replacing them with a better 20%, and you're paying 50% of the salary cost of the company in new training. That doesn't seem like a good idea unless the bottom 20% are really, really bad at what they do. In which case you should probably have started with firing all the hiring managers and HR department personnel who let those slackers in in the first place!
Is it just my observation, or are there way too many stupid people in the world?
Horse shit. It's a fucking brain dead system. Using blind statistical numbers like that is a surefire way of ensuring that you have ZERO employee loyalty forever.
I worked for Seagate Software/VERITAS/Symantec through many mergers. Due to my specific skills I was totally safe from layoffs. For a time we had ex-Oracle execs, and such shit-born layoff policies were instituted.
Eventually I got sick of watching long time friends, who had done perfectly great jobs for years, walked out the door to maximize some VP's bonus.
So when given a good exit vector, I left for a better, less hate-driven opportunity. I declined to train a replacement. And I told them WHY.
I'm very glad I did. I hope that was really fucking expensive for them.
"Oh my God. This is terrible. This is the end of my Presidency. I'm fucked."; ~ Donald J. Trump
... after you factor in inflation.
Well, most of the time anyways - yes, I know the USA has had a recent period of near-zero inflation, but that's not the norm.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Whenever I see HR criticised, I think of this guys hillarious real world trolling of HR.
http://multiversity.blogspot.c...
In a company as large as GE you are going to have a bell curve distribution of skill levels. That's just a fact. When you hire replacements, you'll have another bell curve to add in. It's an iterative process of weeding out the weakest. A company can't stay competitive if it's giving away money to people who don't pull their weight. So your argument that the firings are arbitrary is a straw man.
Scott
And yet almost all companies who blinded followed doing stack ranking are all but abandoning it because it's toxic and is great at destroying morale and breeding infighting. Clearly a sign that it's an excellent system! Oh wait...
You're not rare. You're a fugitive from the laws of probability.
You're not accounting for the fact that work these days at the bottom level can be done by Recent College Grads at the entry level pay, with guidance from an employee that has been around for a while. These young employees come in with much more enthusiasm than people that have been around for a while. Presumably the 20% of employees that are getting laid off are older workers that are highly compensated, and for that high compensation they may be able to hire on 2 or 3 RCGs. The RCG Mill of corporations is alive and well.
> Firing the bottom 20% of your work force every year is no different than YOU, as a consumer, not purchasing another good or service again because it didn't give you what you paid for. It is assigning value via your wallet.
But that's not how that worked under stack ranking. What they did was apply it to groups and teams. Suppose you are running a division and you want to put together - for lack of a better term - an all star team to tackle a bunch of problems. So you get the top 15 people from different teams to work on big problems and you solve a bunch of issues. Great! Now it's a year later and it's review time. According to stack ranking, 20% of those people, who would have been on the top of the stack in their old teams, are now on the chopping block because you have to get rid of 20% because rules. Congrats. You've now sent 3 of your best staff off to the wilderness and infected the other 12 (and probably a lot of others who hear about what happened) with dissatisfaction. Now the other 12 want to be put back on their old teams and most of them are also sending out their resumes.
This kind of shit also happened at Microsoft a lot when they embraced stack ranking. Without the firings though, they just shafted the bottom third of their all star teams on compensation which pissed them off and they left.
Stack ranking is a disaster and any company that still thinks it's a great thing is driving away talent.
I wonder if anyone will notice if we just stop paying them entirely!
and let nature take its course!
It's employee lifecycle management. Your least productive year is your first year so your initial salary is depressed accordingly(knowing they can pay you a fair wage at the end of the year and call it a raise).
Your second year is your most productive, so they have the most incentive to retain you.
After the third year, they figure you probably hate job hopping so they don't have to try that hard.
For the remaining years at the company: you don't feel the same need to hustle anyway, so they'll keep chipping at your salary figuring they have very little to lose with an employee who has demonstrated a tendency to stay in one place and is less attractive to other employers with every additional year he handcuffs his resume by becoming "over-specialized".
If you are in IT, chances are you have shopped around for wage increases anyway. I learned my lesson with a 'career' job long ago when management for said position couldn't be bothered to even give me a raise to the average salary for the position I was working in. 3 weeks later and a 30% salary increase...goodbye.
"GE executives are reviewing whether annual updates to compensation are the best response to the achievements and needs of employees."
Because we all know that the employees really dont need money. In fact we are hurting them by paying them!
Do not look at laser with remaining good eye.
I'm lucky that I sold a bunch of my GE stock at the opening bell... before hearing of this news.
This is all assuming you have some completely fair and objective way to measure performance. In practice it ends up screwing people who get stuck on a failing project, or worse for good projects to fail because people think they might and abandon ship prematurely. You can be screwed by a bad manager, a college who doesn't like you. In fact it encourages people to screw each other over, take claim for other people's work and generally act against the greater good.
As an example, I spend quite a bit of time helping others debug code, because that just happens to be something I'm good at. I don't really enjoy it and it distracts me from my own work, but it's for the benefit of the company and my bosses are happy that I spend my time that way. At a company like GE, that seems much more hands off and looks at metrics to determine an individual's value, I wouldn't waste my time helping others, I'd spend it collecting hats and polishing my CV in case I suddenly need to find a new job.
This sort of thing is also illegal in many countries. In the UK GE would be expected to offer those people help to improve (training, mentoring etc.) before firing them for incompetence. Arbitrarily firing the lowest performing 20% and then hiring new people to do the exact same jobs is not allowed.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Having managed at companies where IT is a support to (i.e. not the focus of) the company, the handling of IT compensation, annual reviews, etc. is always painful.
HR, like many entities in a company, are usually understaffed for what they are asked to do. They are constantly having to reshop benefits packages (especially medical insurance), organizing workforce morale opportunities (without spending much money) and dealing with the occasional case of sexual harassment, puppy rape, etc. The annual review/raise process is one-size-fits-all by necessity, and it usually works for nobody.
I kind of agree with the idea that annual raises do not meet their objectives (especially when they are small). What would I like to see? Maybe something like an annual bonus (meaningful in size), accompanied by review of salary every two or three years versus current market data ("we see that since we hired you, your salary has fallen on the lower end of the curve of developers similar to you, let's fix that"). As long as the work is interesting and the environment pleasant, I think this would be a more stable option for IT professionals.
The problem with firing the bottom 20% is that people will work to reach their KPIs instead of doing the 90% of their jobs that is not measurable yet of critical importance
"We uncovered an opportunity to improve the way we reward people for their contributions,"
We had this brilliant idea to STOP paying cost of living wage adjustments. Why bother, we can always hire H1B replacements at a meager $65K/year. Instead, we will give merit raises. Most all of these will go to mid-level management who usually impedes work rather than aids it. These are people we want to move up to low level executives.
Those who work hard, are merely doing what we hired them for. So we won't reward them. As they burn out, we will replace them with $65K-H1B employees.
Never discount the most worthless employee you have. There is tremendous power there.
We use them as deterrents when other folks around the company become a bit too demanding and don't understand we don't just drop everything we're doing every time they have a project they want done yesterday.
Since telling them " No " would simply cause them to go whine to one of the executives, we deploy one of our special snowflakes and assign them to their project. A project that should take a day or so, ends up taking a week or two.
It does not take long before they figure out that being a demanding asshole isn't in their best interests. They are usually FAR more understanding and even nice the next time they have a project that requires our help. We then reward them with a top tier type who blazes through their project in half the time they allocated for it.
slap yourself until the stupid falls out.
across the entire company it may approximate a bell curve, but the reviews aren't being done company wide, but at the individual team level. and at that level the entire process breaks down.
it is stupid and you are stupid for defending it.
The guy who said the election was rigged won the presidency with the second-most votes.
executives can be removed from reality...
"We uncovered an opportunity to improve the way we reward people for their contributions," GE's head of executive development, Janice Semper, said in an e-mailed response to questions.
Translation:
"We found a clever way to screw over our employees and avoid giving them raises," GE's head of executive development, Janice Semper, said in an e-mailed response to questions.
Just cruising through this digital world at 33 1/3 rpm...
Stack ranking is absolutely idiotic.
No matter how many times you "weed out" the bottom 20%.. guess what.. there is a new bottom 20%.
Meanwhile you are jettisoning 20% of your institutional knowledge every year and creating a workforce who is antagonistic to one another..
Only business school morons couldn't think this stuff up and actually think that it would work over the long haul.
I am curious
> "Firing the bottom 20% of your work force every year is no different than YOU, as a consumer, not purchasing another good or service again because it didn't give you what you paid for. It is assigning value via your wallet. "
That's a pretty terrible comparison. It would be more like, if you went to a fast food restaurant you loved, that had, say, 20 items on their menu, but they forced you to rank the menu items from most-liked to least-liked, and then whichever 4 items you said you liked least (even if you still liked some of them!), they refused to let you buy them ever. Just crossed them right off the menu.
Firing people because you think they're not giving your company sufficient value, that's equivalent to what you described. Firing a bunch of people every year because they're in the bottom arbitrary-number of your current workforce, even if you'd prefer not to because they're still fine, that's balls-out crazysauce.
In particular does it also apply to management? I kind of doubt that the presidents and vice presidents (CEOs, CIOs, CFO, etc.) are going to be affected by this.
Quote from the (largely useless) linked page:
" [GE} aims to replace a once-a-year conversation with rolling feedback."
So if in fact what they plan to do is hand out X% raises (where X >> epsilon) whenever the situation warrants either CoL or pure reward, that's fine w/ me. No reason to wait 'til the next year.
But if "rolling feedback" means a $10 DunkinDonuts card, then yeah, I'm outta there yesterday.
https://app.box.com/WitthoftResume Code: https://github.com/cellocgw
This entire thing is total bullshit. GE does not do annual raises. They have an annual review process that is only tangentially related to the timing of your salary increase. One of the reasons I left was because only the "top talent" (basically the ass-kissers) got a raise in 12 months. For the common folk it was 16 to 20 months. And of course for the bottom ten percent (or if you pissed off your boss) there were no raises. So basically you get 2 or 3% every year and a half. Not even close to covering inflation. That was a decade ago, so maybe they do things differently now.
What GE has discovered is that annual raises are permanent. Once you give someone a 5% raise that rate of pay carries on forever (or as long as they are an employee at least). And the next raise compounds on the last one. So if you have a good year this year and a poor one next year the company is still compensating you in year two (as a result of the pay raise in year one) as if you had two good years.
A bonus, on the other hand, only lasts for this year. The base pay does not change. Each year is a blank slate.
The other thing is that salary reviews are always thought of in an upward trend. Any decrease in salary, or no increase, is seen as a punitive measure or even an insult.
So clearly GE has a financial incentive to do away with annual raises. The question then becomes....what will it be replaced by? If, as some suggest, it will be replaced by other non-monetary benefits (more time off, flexible work schedules, etc.) that might be welcome by some. To me it seems more likely that this is a further progression towards the temporary employee. The first step was to do away with pensions. Next was the offshoring trend. Now the trend is moving towards employment based on a fixed duration, or contract based employment. Workers have predictably responded by changing jobs more often.
In my own case, it seemed like the best way to get a raise was to change employers.
I'm the original poster; didn't even notice it was accepted!
The thing about GE is, for whatever reason, every single MBA program teaches that anything GE comes up with in terms of management strategy needs to be copied. Same thing with Google; our big company is now in the process of taking away offices and cubicles because Google does it and "collaboration." GE's stack ranking or elements of it have been replicated in basically every big company. Microsoft famously implemented it and immediately set up a back-stabbing office culture because even people who did a great job would eventually have to be fired or at least not get a raise. We had an ex-Microsoft VP of HR a while back, so stack ranking was in place for 2 years until they realized they were losing a lot of qualified people for no reason.
What I don't get is this -- unless it's forced, basically nobody gets the lower ratings anywhere I've worked. Are there really people out there who don't do their jobs properly and actually get an honest-to-god crappy review? I'm no genius, but I haven't really experienced this. I've seen it used as a tool to manage people out, or reward favorites, and it's easily gamed. But I've never worked anywhere where someone has been fired simply for doing a bad job.
So, the problem is that generations of MBA classes will be taught this new "no predictable raises" trend as dogma. Those MBAs will go get jobs at Accenture, McKinsey, Boston Consulting Group, or maybe even the HR departments of large companies. Instantly, employees will be turned into day laborers and have no yearly raise cycle. Even in times of low inflation, I can see that having a huge knock-on effect. Mortgages are designed to be painful up front but tolerable in the long term because the payments are fixed and people (should be) earning more over their lifetimes.
I've seen this play out at a F500 company where I live that copied GE's mentality.
One team of all-stars took turns on the roulette wheel. It was something as arbitrary as alphabetical order: Top performer in Q1 was Adam, middle was Beth, Jerry, and Roger, and Sam was the lowest performer.
In Q2, Sam was now the top performer, and Adam, Beth, and Jerry were now the middle, with Roger now the lowest performer.
Their boss explained it to them, objected to what the company was making him do and complained to his boss, but he had a team where all were awesome and didn't want to lose any of them.
Sure enough, one day a mandatory culling was announced, and a great employee was let go because it was her turn on the wheel.
Bonus: At this company, if you are ever let go because you were at the bottom, you can never be hired again.
Grammer Nazis - I mod you "troll" unless you actually add something on-topic. Yes, I know I have mispellings in my sig.
Agree with most of this, but this didn't make sense to me:
... the company is pulling in higher numbers.
>> "Companies are not naturally making extra money via inflation to pass on to their workers."
If inflation is where everything costs more
So I would think inflation would cause companies to make extra money.
They won't have to worry about firing 20% of their people every year. Without raises they'll quit.
Coder's Stone: The programming language quick ref for iPad
Bob, get back to work, we don't pay you to post on Slashdot!
-your boss
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
I bet you could make more money if you looked someplace else.