Conference 7.286::digital

    Uh oh, the company could be in real trouble if management is now
    deciding to siphon off money for themselves.  I hope that's not what
    they are doing.  And I hope their desire for "monetary incentives" is
    not because they now believe Digital stock is a poor choice.
    
    
    				-- edp

    
    When are they going to get it?  It's been clear for sometime that
    Digital needs to move to a more team-based focus where self managed
    work teams not only do the work now done by individual contributors,
    but begin to take on some of the responsibilities up to now done by
    middle management.  Where's the plan to reward successful teams?
    
    Steve
    

    As I was reading the basenote I was thinking "DEC stock is so low that
    even the top guys don't consider it incentive" and "Oh sure, they get
    paid six-figures already and now they will get even more for doing
    their job.  Those on the bottom who are also working just as hard get
    a "portion of a pool" of funds".
    
    DUH!
    
    -sandy
    
    

    Not to sound cynical, but I once worked for a struggling startup that
    tried to jump-start things by starting a cash incentive program for
    the veeps... they were to be paid bonuses for meeting "specific
    performance criteria".  Near as I could tell, those criteria must've
    included "waking up and drawing breath" and "going to the bathroom
    unassisted"... since the company had *zero* sales and stagnant
    R&D in that period, yet near as I could tell the veeps all got their
    bonuses...
    
    --jim
    

>  In FY93, cash incentive awards for certain top senior managers will be 
>  directly related to the achievement of corporate-wide financial objectives 
>  and performance targets established for their individual areas of 
>  responsibility.  For the other eligible managers and employees, a 'pool' of 
>  cash will be established, from which awards will be paid to individuals.  
>  The magnitude of the 'pool' will be directly related to company performance.
>  Awards to individuals will be based on his/her performance against their 
>  goals.
    
    Anybody else interpret this the way I did??  Senior managers (already
    getting paid the big bucks) get "cash incentive awards", and the rest
    of us get a dip in the "pool"??
    
    Unbelievable.......  talk about providing incentive for the measly
    worker bees......
    
    :-(
    
    -- dg

    
    My ex-brother-in-law is the veep of finance for a pharm company on
    rt128.  about a year ago, the company instituted an "incentive"
    program.  He recieved a proposal from a veep, and turned it down,
    informing the senior veep that what he had proposed was part of 
    his job.  As I recall, it caused a HUGE problem among the senior 
    managers of the company (read as "Good Ol' Boys) but the decision 
    stuck, allowing "pool" money to be used for the lower level emp's
    of the company.  It will be interesting to see if anything like that
    happens here.  I, for one, am sick of seeing mediocre performance
    consistantly rewarded due to "connections", while people who clearly
    work above and beyone the call are supposed to be satisfied with a 
    "thank you" note, if that.
    
    Jim (staring at my pen/pencil set from Decworld '92)
    

    Perhaps the LIVEWIRE didn't mention that the "S" coded people would be
    elidgeable(SP) for the incentive bonus- BUT- They will have a reduction
    of pay from 10% to 20% and be expected to make up your loss in bonuses.
    
    
    so cut my PAY and negatively encourage me to make it up as a "bonus"
    
    WHAT'S WRONG WITH THIS PICTURE??
    
    
    
    If sales is going to have a cut then the whole company should take a
    cut, why single sales people out??
    
    
    Tres' amusemont mais tres' stupid!
    

    re:-.1
    
    I have never been in sales, the closest I have come was a sales support
    role for some government programs.  I sympathize with you, as I can
    imagine that making budget in these times is probably a tough thing to
    do.  However, I would sign up for a 10% cut if I was eligible for a 
    "productivity" bonus.  Most of the projects I have worked on in the
    past five years have required 12-18hour days, and my teams have always
    pushed against the barriers of "That can't be one that way, even if it
    DOES make more sense", striving to realize efficiency gains and cost
    savings.  There have been MANY times when the team deserved some type
    of "corporate" recognition, and instead had to make do with a letter
    from me, which was by NO means an adequate reward.  
    
    I just hope this isn't another "trickle-down" program that never 
    trickles.  I would like to see numerous awards, fairly distributed, and
    publicized throughout the company, so that the whole thing has some
    meaning.  I will be surprised to see that happen, as it seems to me
    that it would have about the same chance of success as a government 
    sponsored health care program, great idea, BUT, this government?  NOT.

    re: .8
    
    But, if it (the 10-20% pay cut) motivates the Sales force to new,
    higher levels of performance, it'll be rolled out to other
    organizations as well! (per the US FY93 Kickoff DVN).

Let's assume that this cash incentive plan simply replaces the
current Restricted Stock Option program, which is what seems to
be implied in .0

Now, how does a move from stock options to cash better serve
DEC's longterm interests?   I don't see it, myself.  (I'd
take the cash, by the way).

    re:.9
    
    Not sure what you mean here.  Are you saying that if the Sales force 
    is successful in jumping the new hurdle it's not fair that the rest of
    the company share in the "benefit"?  If, (and I stress, IF) that is
    your point, I would say that while the sales force is certainly 
    essential to raising the company's ROI, it is not the only factor
    in making us successful.
    
    Jim

    How about if I can trade in my restricted stock options (aka wall
    paper) for real money under this plan?
    
    Naw, I'm not a VEEP
    
    /s/ Jim Williams

    Here I go again, but since coming to DEC, all I've heard from Sales is
    how they were non-commisioned base and they could not make the "big
    bucks!".  They complained about not having any motivation (like in this
    job climate there is no motivation!).  Now Bob Palmer is trying to
    correct this inequity and we hear from Sales Reps that "they're cutting
    my salary!"
    
    On top of that, they're complained about the inequities with the car
    plan for years.  Again the customer is trying to do something, but all
    we hear from these Sales Reps are "they taking MY car away."
    
    My cubicle is with the Sales Unit I support and on a personal basis,
    many are my friends.  But please, all those that are Prima Donas, stop
    complaining and sell!

    re .13
    
    I spent 16 years with Sperry (UNISYS) on a comp plan and did very well
    most of the time - you couldn't live on your base, so you had to do
    well to survive.  This is NOT a comp plan.  You are not getting
    commission on what you sell.  You ARE getting paid to hit some number
    that was determined - sometimes quite arbitrarily - by your manager. 
    Who, by the way, has never had this responsibility before.  What he
    decides, can adversly affect your W-2.  We're not talking about COE,
    DEC-100, or anything like that, it's $$$.
    
    If they want a comp plan, they should pay commission in a manner that
    rewards ALL sales.  For example, if you get 99% of your quota, do you
    get 99% of the gap they have created by cutting your salary??.  I have
    not seen the plan, but the rumors sound terrible.
    
    
    Ken

   Re: Why cash instead of stock
   
   They have figured out that taking stock options is very dangerous. 
   You can only exercise up to 10% in a single year.  The limit combined
   with our stock performance leaves many people in the boat I am in.  I
   have 50 shares of stock available to me.  I have not elected to
   exercise any of my options because the price I can buy them for is
   just about $60/share.
   
   If you take a stock option, you take a risk.  Senior management is
   bypassing the risk of a stock option plan.

    Stock options go to more people than just senior managers.
    Bottom-level managers and consultants get them too.
    	The reason for changing from stock to cash is to make
    the reward more immediate, I'd guess.  When you get a
    restricted stock award, you can't cash any of it for a year,
    then you can exercise 10% per year.
    	That is a good reward in a company's growth period, but
    not so good in slow growth or no growth at all. If DEC wants
    a strong incentive in FY93 for actions which benefit the
    company in FY93, cash speaks louder than stock.
    
    	Dick
    
    

	I think cash is a much more fair way to do it. With stock someone
	may do great things for the company but by the time she can use 
	all the options the company may be down the drain through not fault
	of their own. Thus they are sort changed. Likewise someone could rest
	on their past while the rest of the company takes off. In this case,
	5 years later they may get a very big gain through no credit of their
	own.

	My only fault with the program is that it doesn't include all employees.
	I've seen projects where a manager puts a team in place and sits back
	on their heels while the team moves the world. Often the manager gets
	all the tangable thanks while the team gets tokens. I agree that a 
	manager should get some credit for putting together a great team but
	the team should be taken care of as well.

			Alfred

    RE sales:
    
    .13?  
    
    Taking away 10 or 20 percent of salary and then saying that if you
    sell an amount determined by a VP somewhere, you can get back that 10 or
    20 percent..... that is not what a commission plan is.
    
    First you "bottoms up" the budget, then you take 10 percent away and
    give the opportunity, if you sell your budget, to make back 20 percent
    back.
    
    Also, you begin this process at the beginning of the year.  Not at
    Christmas.
    
    BTW, if you've gotten to sales support and never sales, you still have no 
    idea what sales is like....in my opinion.
              

    
    	I have heard that the base salaries for DEC sales people is 
    	higher than the industry in general..that is how they got away
    	with paying no commissions in the past. If so, this would explain
    	(somewhat) reducing base salaries and allowing bonuses..maybe?
    
    	Back to the base note...I agree with some of the responses that
    	are puzzled by the fact that there are two kittys..one for the
    	senior managers, and one for the worker bees. After all, rowing
    	the boat is at least as important as setting the course, no?
    
    	John
    
    

    re .19
    
    >...senior managers, and one for the worker bees. After all, rowing
    >the boat is at least as important as setting the course, no?
    
    Importance is not the issue.  Scarcity is.  Digital management is
    convinced that it is irreplaceable, but we are not.  You can find
    people who design, make, and sell products on any street corner. 
    Managers, now, especially Digital quality managers, are scarce as hen's
    teeth.  :-)
    
    Dick
    

    Reply to .18
    
    When is it a "good" time to implement ANY change?  If you
    procrastinate, you'll be criticized, if you act too fast you'll be
    criticized.  What is "good" for you may not be good for the balance of
    the Sales Organizations or for DEC.  After all, it is DEC who you get
    a paycheck from.
    
    My point is, instead of always complaining, why not 'propose'
    alternatives to your superiors up the line.  Let us know in the Notes
    File the progress, etc.  I'm all for change if its a Win/Win situation.
    
    Who knows, maybe they'll name the plan after you!

    What puzzles me about this new incentive plan is that it
    eliminates what I've always thought to be the more important
    reason for the restricted stock plan.  Although getting granted
    the option is nice, for the company the benefit is that it
    acts as a real hook keeping the good performers working for DEC.
    It means that if someone wants to buy you away, they have to
    make an offer that also compensates for the value of the DEC
    stock you will lose by leaving (since when you leave you forfeit
    all unexercised shares, and you can only exercise them at a rate
    of 10% per year).

    Perhaps there is a strong message here: DEC isn't all that interested
    in even the good performers sticking around any more!
    bob

    2 things:
    
    1) if the intent of the base note is right and the upper echelons
    recieve more than the worker bees at reward time, then I find that
    totally wrong.  Whoever did the work that creates the reward should get
    it, NOT someone who sits on the sidelines and oversees what the group
    is doing.  
    
    2) in this string and others it's beginning to sound like some of us
    feel there is a conspiracy to see DEC go belly-up?  Anyone else feel
    that way?  Give us another year and all will see what DEC can
    accomplish!
    
    Reg.

    First off, I think a lot of folks are making assumptions here about how
    the program is going to get implemented ... there's no data yet about
    how much senior managers will get, or the size of the pool.  I think
    I'll wait for more data before I start to criticize that aspect of this
    new program.
    
    However, there are a couple of points of concern to me.
    
    >> a shift from stock-based programs to cash programs.
    
    The whole concept of replacing stock options with cash does send a
    negative message ... both to employees and to investors ... that stock
    is no longer a worthwhile incentive for senior managers.  One has to ask
    what they know that the rest of us don't.
    
    About 10 years ago I was working for a company that experienced a
    lay-off.  Shortly after that, most of the veeps divested themselves of
    all their company stock.  During the next three years, the company had
    three more lay-offs, and their stock dropped from about $20/share to
    about $1.50/share.  The veeps made out like bandits ... everybody else
    got screwed.  Is this what we have to look forward to?  I dunno ... but
    if senior management in this company thinks cash is a better financial
    incentive than stock, the message I hear is that they don't expect our
    stock to do so well in the foreseeable future.
    
    The other thing that strikes me is that this is yet another opportunity
    for senior managers to micromanage ... 
    
    >> In FY93, cash incentive awards for certain top senior managers will be 
    >> directly related to the achievement of corporate-wide financial 
    >> objectives and performance targets established for their individual 
    >> areas of responsibility.  For the other eligible managers and employees,
    >> a 'pool' of cash will be established, from which awards will be paid to
    >> individuals.  The magnitude of the 'pool' will be directly related to 
    >> company performance.
    
    You notice that "the magnitude of the 'pool' will be directly related
    to company performance", but there's no mention that the magnitude of
    the cash incentive awards to senior managers will be.  In fact, it
    states that the cash awards to senior managers will be based on
    "corporate-wide financial objectives and performance targets for their
    areas of responsibility".  Now, keep in mind that "corporate-wide
    financial objectives" do not necessarily equate to good performance,
    but rather they mean that the company makes (or loses) money to within
    a certain percentage of what the senior management team predicts.
    
    So once again, the easy road is to diddle with the spreadsheets and make
    decisions that will cause the bottom line in a given senior manager's
    piece of the company look good, even if that doesn't necessarily benefit
    the corporation as a whole.  
    
    IMO - this only encourages the very behavior that has gotten us into this
    mess in the first place ... i.e. I'll take care of my empire and the rest
    of the corporation can worry about themselves.
    
    To copy a quote from another Note in this conference ... "a house
    divided cannot stand" ... and this policy does nothing to cause the
    factions of THIS house (i.e. Digital Equipment Corporation) to want to 
    change the way that we all conduct business together.  If anything, it
    encourages continued divisiveness.  
    
    THAT'S what worries me about this new program, not who gets how much.
    
    ... Bob
    

    .19   brought out a good point; base salaries for our sales reps are
    above industry average.  A friend who was TFSO'd last year and is
    now working for another company picked the same dollar budget she'd
    had here at DEC.  She felt that since she knew she could make that
    budget at DEC she'd have no problem doing it elsewhere.  Based on
    the same dollar budget, her base salary with the new company was
    half her DEC salary.  She was able to make up the difference in
    "commissions" and the other company's car plan is better than ours :-(
    
    Not sure about this bonus stuff; perhaps when speaking of bonus vs
    commisions, we are talking apples and oranges?
    
    K
    

    
    re: last few....
    
    Please don't confuse DEC's "base salary" with the widely used term 
    "base" as in base + commissions.
    
    A sales rep at DEC who makes 100% of his/her budget is not necessarily
    making as much money as a competitive rep doing the same level of 
    performance.  By the same token, in bad times, like these, DEC is a
    pretty good place to be.
    
    

    Also, don't confuse a DEC Sales persons salary with any other DEC
    persons salary. For example (89 figures, but I would assume the %
    discrepancy is the same)   
    
    	DEC Sales  SRI 39 range  $54,724 - $93,392
        DEC normal SRI 39 range  $40,248 - $72,841 
    
    - John

The field SRI 39 laterals into an internal  SRI 40. I know because I left the
field after 6 years as a Sales exec I (SRI 39), to lateral into a workstations
marketing position (SRI 40). I was told 3 times this is not a promotion, the 
levels have a skew still, even after JEC. ;>)

I'm waiting for the dust to clear from Bob Palmer becoming President. I'm
hoping that Bob will set the goals, directions, and attitude for all of
us, and holds everyone to those goals.

Bill Z.

    re .27  SRI 39 is one range for the whole company.  There
    are not multiple definitions of SRI's. (They do change from
    year to year.)
    	SRI 39 applies to job titles such as Software or Hardware
    Principal Engineer, Sales Executive 1, Sale Business Consultant,
    and so on.
    
    	Dick
    

    RE:  29 (and others)
    
    Yes, SRI 39 = SRI 39, but not exactly.  The PAY RANGES for certain job
    titles (example, Sales) is different than the pay range for other jobs
    (example, Marketing).  The pay range for a sales person in SRI39 is
    HIGHER than the pay range for other employees who have an SRI39 job.
    
    Chet

With a spread of nearly $40K, it kind of hard to compare positions based on
SRI.

Bob

    I admit that I just believed that "JEC" was about
    unifying descriptions and ranges around the company.
    Sounds like sales wanted an SRI39-1/2, or something.
    (Or perhaps there's a "hazardous duty pay adder" for
    customer contact?)
    
    	Dick
    

    re: .32 - it would'nt matter since the spread is $40K and one
    eventually can get promoted so they don't push the bell curve too hard.

    Hey, sales is sales.  It aint marketing, sales support, customer
    service, engineering....etc....
    
    It is the ONLY job where you live or die by one metric....your
    percentage against budget.  Fail at that, and you can get fired.
    Not subjective and very stressful year after year after year....
    
    And, perhaps it is not generally known, but Sun reps, when they make
    their numbers, pull in over 100K.  Heck, paper product sales reps
    making their numbers make over 100K.  The LOWER compensation at dec, 
    for sales reps, is acceptable BECAUSE IT IS SALARY!
    
    Go to a comm. plan and set sales compensation at something like...55K 
    Salary and expected comm. of 50K for a total plan of 105K.
    
    BTW, seems to be a negative attitude about sales here.  Perhaps I'm
    wrong....but if you have not sold to support yourself and /or your
    familly, it is very difficult to fully appreciate the job... 

    re: .34
    
    I don't know where you live buddy, but everyone in DEC is selling
    something to support their families right now.  Get down off your
    pedestal!
    
    Chris (Who is also in sales, and also did sales support, and who has
    always had a budget)

    .35 Chris
    
    Hey, get off of my pedestal.  Get your own!
    
    

    
    re: .35 Chris
    
    I don't think the point of .34 was that "sales is better, or more
    important".
    
    I think the intent was to counter the attitude that DEC sales is
    overpaid, or even paid competitively.  It is true that many, many
    commissioned sales people make more than $100,000 a year, selling
    everything from paper goods to new cars.  I know people who make that
    much selling log home kits.  In the computer industry, the most common
    pay plan that I have seen is $50k base, $50k target commissions.  Thsi
    is the average, not the high end.
    
    I don't know any direct sales rep at DEC who makes that much. 

    Re: earlier thread about stock options vs. cash incentives

    Maybe it _used_ to be the case that stock options were golden handcuffs
    to keep top performers (or _past_ performers) at Digital, but the stock
    plunge has made those options worthless.  Might as well go to cash since
    there's no incentive to the options anyway...

    Re: note about manager who put together a team and then sat while it
        did outstanding work...

    Hey, I don't mind seeing managers who choose the right people get paid
    for it!  Isn't one of the complaints running through this conference that
    managers aren't good at identifying skills/performance/good people?  If
    the ones who do this well _are_ rewarded, I'll be happy as an IC, because
    the good ones will stick around (and if they're good enough to pick a
    functional (non-dysfunctional) team, they'll be good enough to split up
    the pool appropriately :-).