Conference 7.286::digital

    
    What exactly down this mean? We're not going to get paid Q1? 
    Or is it just no raises Q1?
    
    /prc

    I just read it very carefully, and concluded that noone in the US was
    going to get paid for Q1.  I allowed as how that was probably wrong,
    and am assurred that it means your salary review will be delayed one
    quarter.   With a 6 month and a three month and a new three month, I'm
    now back where I should be.

    That's right. They're pushing out increases for one quarter, but note
    that the door was left open to extend it "if necessary." They did this
    in '82, extending the freeze for an additional quarter (total of two).
    There were rumors about retroactive increases for those that stuck it
    out and helped get the company back on its feet, but that never
    happened.
    
    The financial picture this time isn't as bleak. Hopefully, the company
    isn't taking advantage of an industry slump in doing this, knowing few
    people will leave as a result. I always hope that a few good people DO
    leave so that the freeze is felt at a high level.
    
    For those that endure a salary freeze, it would be nice to be able to
    "share the wealth" when the upswing comes...but I wouldn't hold your
    breath.

So is salary planning done whenever they decide to lift the freeze?

	It is my understanding that salary planning is going to go on
	as scheduled. Only difference will be that the implimentation of
	the plan will be delayed. Of course that could be changed but I
	doubt it.

	Given how unclearly that memo was written and the fact that my
	manager hasn't heard anything officially yet I for one don't know
	what this will really mean in implimentation. I can't say that I'm
	all that worried though. I haven't seen a raise that made any big
	difference in the way I live since the time I left DEC. :-) As long
	as inflation doesn't take a bigger than expected jump this will not
	really affect me that much. At least financially. If we don't get
	to share in the good times at the same level as we get to pay for
	the bad than my feelings about upper management could always change.

			Alfred 

    If the company is in such bad shape I, for one, would hope that
    extra compensation such as stock options will be suspended until
    the "salary delay" is rescinded.  Somehow I doubt it, though.

    I'm willing to do my part, and if that means no raise for 3 - 6
    months then so be it.  But I must admit it's hard to take when I
    look around me and see all the waste...  It remains to be seen if
    other measures are taken to reduce overhead/waste to go along with
    the salary freeze.  If so, then I have no complaint.  If not, then
    I will have a great big complaint.
    
    							Pat

<EDITED> Note this version also has ``QUESTION AND ANSWER'' following
    the same material as in the .0 note which clarifies more.
                                      
Subj:	*THIS MESSAGE IS FROM BILL KENT - Salary Delay*



    .___.___.___.___.___.___.___.
    !   !   !   !   !   !   !   !
    ! d ! i ! g ! i ! t ! a ! l !    i n t e r o f f i c e    m e m o
    !___!___!___!___!___!___!___!
    
    TO:	E&T Staff	               DATE: May 18, 1989
       				       FROM: Bill Kent
    cc: E&T Staff Secretaries          DEPT: Engineering & Technology
       				       DTN : 247-2585
       				       LOC : TWO/B21
       				       ENET: CSMADM::KENT
    
    SUBJECT: Salary Delay
    =====================
    
    
             **PLEASE COMMUNICATE THIS MESSAGE TO ALL EMPLOYEES**
    
    During the last several quarters, revenues were less than anticipated.  
    The U.S., in particular, saw demand fall below expectations, while 
    business remains strong in Europe and GIA.  Steps have been taken to 
    control costs by eliminating unnecessary spending and limiting hiring 
    to only critical positions.
    
    As an additional step in the U.S., we also see the need to delay the 
    FY90 U.S. Pay Program for all employees beginning in Q1.  The situation 
    will be reviewed at the end of Q1 to see if a continuation of the delay 
    is warranted.  It is, of course, our hope that business conditions will 
    allow implementation of the pay program.
    
    This action will be reviewed on a country by country basis to determine 
    whether similar steps are necessary.
    
    We appreciate your continued efforts and support as we address the 
    current situation.  We also encourage you to continue your efforts to 
    reduce and eliminate expenses in your cost center.
    
    We have the best people, the best products and magnificent technology.  
    Our challenge now is to concentrate the efforts and assets of the 
    entire corporation so that our customers have a clear understanding of 
    our ability to satisfy their needs.
    

                            QUESTIONS AND ANSWERS   
                         RE: THE SALARY INCREASE DELAY
    				                         
    
    
    1.	Is this worldwide?
    
    	The delay is being implemented in the U.S., where the revenue
    	shortfall is most acute.  However, this action will be reviewed
    	on a country-by-country basis to determine whether similar steps
    	are necessary.
    
    2.	Does this affect both exempt and nonexempt employees?
    
    	Yes, it affects all U.S. Digital employees.
    
    3.	Will implementation of JEC in the U.S. be affected by this action?
    	
    	No.  JEC will occur as planned, effective July 2, the first day of
    	the new fiscal year.  All managers should communicate these 
    	classifications to employees by July 1.
    
    4.	Will supervisors have new salary ranges to show employees when
    	communicating JEC job codes?
    
    	Yes.  Supervisors will have access to a revised FY90 structure,
    	which will remain in effect for the duration of the delay.  A 
    	review of the FY90 structure will be conducted before the 
    	resumption of the pay program to determine if updates should occur.
    
    5.	What if employees are below minimum or over maximum of their new
    	salary ranges when JEC is implemented on July 1?
    
    	In both situations, the current policies will apply at the end of
    	the delay when the new program commences.  Refer to the Salary
    	Management binder, Section 5, for more details concerning these
    	policies.
    
    6.	What will be the status of the remaining salary increases planned
    	for FY89?
    
    	The FY89 program should proceed as planned.  Senior management's
    	expectation is that there should be NO OVERSPENDING or overall
    	decrease in frequency from the approved FY89 plan.
    
    7.	Should promotions continue during this delay?  If so, will there
    	be money to go along with them?  If the money is not available
    	during the delay, will a raise be retroactive once the delay is
    	over?
    
    	Promotions should continue as required by the business, but there
    	will be no money available to fund increases.  If an employee is
    	promoted and is below the minimum of the range, the current 
    	policy of bringing the employee to the minimum of the range within
    	three months will apply when the new pay program commences.  There
    	will be no retroactive raises.  Also, the number of promotions and
    	overall movement in the average salary range indicators will be 
    	monitored during the delay period.
    

    
    8.	Should performance reviews continue during this period?  If so,
    	how will they be used?
    
    	Yes.  Employees' performance reviews should continue during this
    	period.  Following policy, an employee's job performance should
    	be reviewed annually.  Performance ratings should be entered onto
    	the Employee Master File.  These may be used as the most recent
    	ratings when Salary Planning begins.
    
    9.	What happens if an employee's job changes significantly due to
    	business changes or reorganization during the delay?
    
    	If an employee's job changes significantly at any time, he or
    	she may need to be re-classified.  During this salary increase
    	delay, as well as afterwards, employees should be classified
    	correctly according to the work being performed.
    
    10.	Will an employee's salary review date change permanently?
    
    	Yes.  Every employee's salary reveiw date will advance according
    	to the length of the salary increase delay.  In addition, the
    	timing of an increase also may be extended further based on the
    	employee's performance and position in the salary range.  Please
    	refer to the Salary Management binder, Section 5, for more details
    	on timing of increases.
    
    11.	When will increases begin again?
    
    	The situation will be monitored by senior management and reviewed
    	at the end of Q1 to see if a continuation of the delay is warranted.
    	When the decision is made to end the delay, Salary Planning will
    	begin.  Employee salary increases will be granted once the overall
    	salary plan has been approved.
    
    12.	In the future, will the amount available for salary increases across
    	the company, be linked to the company's performance?
    
    	The development of a salary increase budget is linked to several
    	factors.  While we strive to pay competitively, equitably, and for
    	performance, we also have to look at another influencing factor --
    	affordability.  Company performance will always be a consideration
    	in what we can afford to deliver in salary increases.

    I wonder if senior management isn't also hoping for a thinning out of
    the ranks as it were, as might be considered a positive side effect of
    the freeze.

    Why U.S. only?  Will they start implementing salary delays for other
    selective areas - like "XXXXX group is unprofitable so no salary
    increases until we can balance the budget"? 

    I thought that we were one company.  This promotes the "U.S. versus 
    non U.S." conflict.  Why can't everyone in Digital share in this??? 
    
    Patti

As the first paragraph in the memo points out, "The U.S., in particular, saw
demand fall below expectations while business remains strong in Europe and
GIA."  I thought it was (surprisingly) well-directed.  Why should Europe and
GIA pay for U.S. shortfalls?

        Re: .10

>    I thought that we were one company.  This promotes the "U.S. versus 
>    non U.S." conflict.  Why can't everyone in Digital share in this??? 

        Well, we aren't one company--different parts of Digital are
        separate corporations, incorporated in different companies,
        and subject to the rules of different nations.

        Pay (and vacation, holidays, and other benefits) are handled
        in different ways in different countries.  This is caused by
        the differences in the laws, regulations, and customs of the
        individual countries.  [There are notes in this conference
        that discusses some of the differences.]

        I'm only speculating, but the differences in laws may be the
        reason for the `U.S. only' freeze.  A wage freeze may have to be
        formulated and presented differently in each country, or it may
        be necessary for lawyers to review the laws before announcing
        the freeze.

        What happened in different countries the last time that Digital
        had a wage freeze?  [It was just before my time...]

        					B.J.

    Where does this leave JOQ?  
    
    Can (could) salaries get raised/frozen from JOQ as was planned?
    
    Is JOQ on the back burner?
    
    Is JOQ in the trash can?
    
    
    ?????????????

    Re .13: Where does this leave JOQ?
    
    Read .8

	
RE: .9

Seems to me that it may very well have the effect of 'thinning out the ranks'
but unfortunately it will be the good people that will leave. 

        Re: .11

> As the first paragraph in the memo points out, "The U.S., in particular, saw
> demand fall below expectations while business remains strong in Europe and
> GIA."  I thought it was (surprisingly) well-directed.  Why should Europe and
> GIA pay for U.S. shortfalls?

        If that was the intent, I don't think it was well-directed at
        all.  If U.S. sales dropped to zero should Digital fire all U.S.
        employees?  If that happened the whole company would die.

        Engineering groups in the U.S. produce products that are sold
        outside of the U.S., and engineering groups outside of the U.S.
        product products that are sold within the U.S.  The same holds
        for manufacturing.  You can't place blame based on the country
        of employment.

        Also, while there probably have been employees in the U.S. who
        have had a negative impact on sales, the decreased demand is a
        phenomenon of the whole U.S. computer industry.  There is no
        `blame' that all U.S. employees share, so there is no reason to
        `punish' all U.S. employees for the state of the U.S. market
        (especially since the wage freeze will affect Digital prospects
        in all countries if too many good people leave).
        
        [BTW, it is after 4:00 and I don't see anything in Live Wire.]

        					B.J.

    
    I beg leave to differ.

Is applying a small amount of the "pain" to all U.S. employees a more 
effective measure management-wise than applying a large "pain" to 5% or 10%?

I'm asking what is the business rationale behind pay freezes rather than
layoffs.  {not that I disagree with the freeze, necessarily, just trying 
to understand if SOMEONE said "Yes-Freeze, No-Layoff"}.   Is it a proven
effective technique for dealing with financial problems?

>                  <<< Note 818.16 by ULTRA::HERBISON "B.J." >>>
>        Re: .11
> As the first paragraph in the memo points out, "The U.S., in particular, saw
> demand fall below expectations while business remains strong in Europe and
> GIA."  I thought it was (surprisingly) well-directed.  Why should Europe and
> GIA pay for U.S. shortfalls?
>        If that was the intent, I don't think it was well-directed at
>        all.  If U.S. sales dropped to zero should Digital fire all U.S.
>        employees?  If that happened the whole company would die.
>        Engineering groups in the U.S. produce products that are sold
>        outside of the U.S., and engineering groups outside of the U.S.
>        product products that are sold within the U.S.  The same holds
>        for manufacturing.  You can't place blame based on the country
>        of employment.
>        Also, while there probably have been employees in the U.S. who
>        have had a negative impact on sales, the decreased demand is a
>        phenomenon of the whole U.S. computer industry.  There is no
>        `blame' that all U.S. employees share, so there is no reason to
>        `punish' all U.S. employees for the state of the U.S. market
>        (especially since the wage freeze will affect Digital prospects
>        in all countries if too many good people leave).
    
    No, fire all the salesmen! :-) More seriously this could have been
    better directed in terms of function, but the overall application
    prevents a stream of employees moving from one function to the other.
    Tough medicine, but maybe necessary.
    
>            [BTW, it is after 4:00 and I don't see anything in Live Wire.]

    Digital announces these measures to the press tomorrow. It may not get
    to LiveWire until then.
    
    - Andy
    

    
    
    Personnally I think the people who leave are more likely to be the
    better people since they know that they can find jobs easily outside
    of the company.  Someone who is a nop knowns that if they leave
    Digital they may have to work for a living will probably just grin
    and bear it.
    

    I do wish people would cool their passions.
    
    I've been with Digital 21+ years, and upon occasion, we've had salary
    "delays" (freezes) before.  The company does have a tradition that
    it historically _has_ honored: no mass layoffs.
    
    If there's a little hard time, it's silly to launch life rafts
    immediately; Digital's far from sinking.
    
    Ken's motto is "Do the right thing."  I think this is an example
    of it.
    
    Steve Kallis, Jr.

    re: .6  Which suggests that in lieu of pay increases the company
    should consider stock options for hard workers ...
    
    The stock option plan has also been delayed ... worldwide.
    
    

    It will be interesting to see the Stock Market reaction to this
    latest tidbit.  All eyes on Wall Street ...
    
    I unfortunately have to agree with the previous replies about
    "thinning the ranks".  A standard tactic in the semiconductor
    industry is to announce "plans" for a wage increase or layoff
    to induce reductions in headcount, and then declare that the 
    plans are not needed due to "natural" attrition.  It's a very
    short-term solution, since the ones who leave are the ones who
    are confident in their abilities and understand their full value.
    
    I also have to wonder how this affects the "stock option plan".
    One of the nice things about other companies' profit-sharing
    systems are that, when the company is not being profitable, it
    affects *all* of the employees, not just the ones at the bottom
    of the ladder.  The freeze memo does not make any mention about
    how the company would react if there were favorable changes, it
    just leaves the door open for more unfavorable ones.  Their is
    no positive incentive to increase U.S. productivity and overall
    profitability, only the negative incentive of freeze extensions.
    One gets the impression that the U.S. employees are getting
    "punished" for the poor performance of the U.S. market.
    
    Well, we've seen the stick, but what happened to the carrot?
    
    Geoff
    

    my opinion (after thinking about it for an hour) is this is a stupid,
    temporary fix to a non-existant problem (or the wrong problem).
    
    the company isn't in dire financial trouble...  at least the last
    quarter's report didn't say we were losing any money... and even then,
    there's over $1billion in the bank if that happens.   how much (little)
    is 3 months of no-raises really going to save anyway?  it certainly
    isn't going to mean the difference between make or break.
    
    it is however the stock investor's dream... the short-term ROI of this
    "program" must be realllll high!
    
    i really can't believe Digital is actually doing this.. (guess i
    haven't been around long enough).
    
    in my case, i do like all other aspects of Digital and my job and
    will probably just live through it...

>    in my case, i do like all other aspects of Digital and my job and
>    will probably just live through it...

How can you live through it if you can't afford to pay for it! ;-)

I'm single and getting married, how do I afford the mortgage for the house
I want to buy!  On my salary and my fiance's I'm lucky if I could get a
$120,000 mortgage and afford it!  On Long Island NY, what can you buy for
that!  (Not much) :-(

Just food for thought.

Mike

Re: .8

>    1.	Is this worldwide?
>    
>    	The delay is being implemented in the U.S., where the revenue
>    	shortfall is most acute. 

Based on this I should completely neglect any international features in
products I work on and concentrate on features that U.S. customers want;
engineers outside the U.S. should do the same thing in reverse.  Of course
I wouldn't dream of doing this; I'm just noticing.

				-- Bob

    RE: The stock market...
    
    If all my finance courses taken in college prove out true, and what
    the Wall Street Journal tends to say...
    
    You will see a raise in DEC stock (no, not big enough to make a BIG
    difference) of several (2?) points tomorrow...  The reason being
    is stock analysts will look on this as a wise move on DEC's part
    on cutting back costs, and will recommend buying, which will raise
    the stock price...
    
   Gale

    In the past several years,the raises haven't been that big anyway
    for the vast majority of US employees so I wonder just how much
    money this will save.Maybe this is not a money saving move at all
    but something else.(someone suggeted "thinning" the herd...maybe it's
    punishment of some kind)

    
         I've been with DEC over 10 years and I too have seen these
    come and go. And as pointed out earlier we are not in the same
    bleak position as the freeze of '82.
    
    Re: Jumping ship, etc.
    
         Only those people primarily interested in the bucks will jump
    ship -- even the highly skilled ones. The rest of us highly skilled
    people will wait this out patiently even though we don't like it.
    
    I tend to agree with an earlier comment that if we are expected
    to "tighten" our belts during rough periods I would expect to see
    some "generosity" later on. The real period to watch is *after*
    the delay is officially over. I recieved my PA in March and haven't
    seen anything yet so I'm probably a good candidate to get bumped.
    
    You can bet your *mortgage* on the fact that if my salary action
    (the last occurred in Dec '87!) isn't VERY GENEROUS after this
    delay, THEN I'll start looking. I can't prove it here, but based
    on my recent PA, I'm *NOT* "deadwood" or a "nop", so I will expect
    DIGITAL to be generous.
    
    But, I'm fairly confident that things will be "righted" when this
    freeze is over. So, if you're inclined to jump ship, more power
    to you. I'll take my chances here. Besides, I can always start
    looking *later* if things don't pan out. I'm one of those (in
    my possibly inflated opinion) who could jump ship in a heartbeat.
    Companies love technical types that ramp up quickly and know
    lots of different architectures, etc.
    
    The bottom line is that while I agree that a better way to trim
    the fat could probably be devised, any way it happens will probably
    benefit me, as well as many others.
    
    							Warren
    
    

   << This entered on behalf of someone not wishing to be identified here >>
    
I looked at the VTX orangebook and found that the compensation policy was
conveniently removed from the manual in JAN 89.  In addition, the policy on
timing of promotions does not say, as implied in the 818.8 memo, that there is
always a 3 month delay for corresponding salary increases (and yes, it appears
increases can be tied directly to promotions, and not just salary reviews).

Maybe its just me, but I do not think the decision makers are doing favors for
the company by acting in this way.

Anonymous

    RE: People Complaining...
    
    I talked with my dad last night - he works for McDonald Douglas...
    He said DEC sure is making it nice...  McDD just announced a *9*
    month freeze, with NO promotions...  At least DEC is allowing
    promotions, and is reviewing once a quarter, and not making it a
    nine month freeze (yet)...  Again, I think DEC is being good to
    all of us!!...  
    
    The moves they COULD have taken and didn't show Ken does still care
    very much about the people he has working for him!!
    
    RE: large raises after the freeze...  don't expect them...  this
    measure is being done to save DEC money, not to delay spending money...
    
    Gale

    Could be like my brothers place.........
    
    Just got a nice promotion, and promised increase..............
    
    Instead along with the promotion, his whole company took a 10%
    cut (thru unpaid forced vacations...............
    
    LAyoffs to follow...............
    Lou

    re: Why should Europe pay for US deficiencies.
    (please note that I'm European)
    If I do have to accept another delay, having felt others before....
    I'd not argue about "it's their fault"...
    This is ridiculous as long as we are still one company, although
    legally divided into several subsidiaries.
    
    The reason why the implementation needs to be looked at on a per
    country basis is purely dictated by the environment.
    Guess what would happen in country XXX, where they just managed
    to get their stuff together and the whole industry is hiring like
    mad if DIGITAL XXX would implement a freeze as such ?
    
    Fred
    

	I lived through the last freeze and I'll live through this one. I do 
have a few observations, though.

	I would like to see the financial analysis where it shows the 
productivity of the field excluding the corporate overhead. If you are going 
to freeze a particular part of the company, I would like to see the 
financial analysis which backs it up. I know in my area we all work long and 
hard to meet our budgets, and we do pretty well at it. If you are going to 
exclude Europe, exclude the areas in the US where they make the budgets. 

	I think that their should be a modified freeze. I believe each area 
within the US should get the percentage of the raise pool equivalent to the 
percentage of budget they achieve. If an area is 50% of budget for their 
fiscal year, they should get 50% of their raise pool. The area can then 
spread this out among the top performers and the "nop" personnel can be 
weeded out. If an area is 100%+ of budget, they get 100% of their raise pool 
and maybe some stock options. 

	I think the "right thing to do" is reward the performers and not 
reward the "nop". Digital has "pay for performance". If people are 
performing, they should get their raise. Stretch out the raise period even 
longer for non-performers, but pay those who do.

    I think that this will clearly lead to some people leaving, and is
    cheaper  to  implement than layoffs (no termination pay for people
    who quit), as well as reducing the salary base of the company.

    This is  in  keeping with Digital's long standing policy of paying
    average  salaries  and  attracting better than average people with
    good  working conditions and nice toys (including notes). Salaries
    have  been  slipping  against the rest of the industry through two
    tricks. The first is to have 6 salary reviews in the last 7 years,
    and  the  other  is  to  raise  salaries  the  lower  of Digital's
    performance  and  the industry standard. Many people who have been
    here  for  a while can get substantially more money elsewhere. The
    problem  is  that  when  the  salaries drop too far below industry
    standards  some  people won't be able to afford to stay. I do know
    people who liked DEC but couldn't afford to keep working here, and
    I  expect  to  see more. Of course, these are all very good people
    who  could  get  job  offers from outside easily. Not the ones you
    want to lose.  

--David

    Why are salaries frozen before layoffs? We all know that there
    is a part of the workforce that is no longer needed, not just deadwood
    in individual groups, but quantities of displaced, never to be replaced
    workers, the one that don't have the skills to be retrained. Just
    how long are we going to continue DECwelfare? Starting layoffs in
    those areas would affect not the  contributing workers, just the card
    players.
    
    Gail
     

    I for one would like to offer the comments from a contractors
    view point. I have been associated with this company for about
    four years on an off and bases. I have enjoyed seeing DEC Make
    and industry and turn around the entire economy for this STATE.
    There are times in our personal lives that we must, do without
    things that are not in the budget, the management skills of this
    company speaks for itself. From ZERO to 14 billion plus the 
    generation of numerous other companies is an admiral accomplishment.
    This is a time when managers will mature and develope skills that
    
    insure the futures of everyone that is associated with this industry.
    It is time for all of us to come of age and realize how to care
    about others. Lets hope we can learn to manage our own budgets
    as well instead of wanting without contribution. If they cut my
    contract today, it would be tough to take, but I want DEC to be
    here for tomorrow. Who knows maybe they will let me come back and
    work with you great professionals again.
    
    YESTERDAY IS GONE- TOMORROW IS FOREVER.
    
    Terry  (A DEC PEOPLE FAN)
    

A salary delay is clearly better than an across-the-board lay-off (such as
trying to take the bottom 2% of all performers).  I wonder if a lay-off
restricted to the bottom 2% of performers starting at WC4 level 9 or 10 and
above might not be an alternative at some point though.  The deadwood to go
after is the high paid deadwood, from a cost-effectiveness standpoint.  Plus
there tend to be more "do-ers" at the lower levels, so you can hurt youself
more by mistakes there.

This is not a dumb or poorly thought out move.  What will be interesting
will be to see what ELSE follows.
								paul

<  Reply deleted by author, because he is too steamed-up to write coherently >


    
    /Jeff
    
    (who had a salary-appraisal/raise/revue  pushed out a quarter, now frozen)

re .36

You have layoffs confused with firing for cause.  In one case,
a company is cutting people who are productive (or could be productive if
retrained) and in the other the company is terminating employment of dead
wood.  Layoffs are only justified in cases of extreme financial hardship
(which is not the case here).  Firing for cause is justified any time.
The fact that Digital chooses to rarely fire non-productive people does
seem to result in some dead wood floating around, but I haven't seen 
all that much.

A different question might be why is a profitable company having a salary
freeze, unless it's a sneaky way to increase attrition.  Anyone know if the
attrition rate increased in the last freeze?

re: .36

Perhaps you would like to decide who gets axed and who doesn't?

I am now a person who has been on both sides of a DEC freeze.  Seven years ago
I couldn't even dynamite my way into this company and others, as a consequence
I lost all my hair due the stress involved.  Now as a DECcie I am finding out
that my review may have been pushed out to July?  As the old saying goes, it's
a tin roof, i.e., it's on the house.

I don't know how to gage my feelings at this point, in one respect I'm steamed,
in another respect I still like this company and want to remain with it.  Prior
to coming here I contracted for two years so i got to tour around the industry.
Let me tell you there are some real doozies out there, so if you are thinking
of jumping ship think not only twice, but three times.  On the other hand you
got to support yourself and your family in the best way possible.

David  

    re .42 Who gets axed?
    
    I guess you missed my point. There are people, through maybe no
    fault of there own, who have no work to do. They have few if any
    transferable skills, their jobs are not coming back. Why can't DEC
    act like any other company and give *these* people their walking
    papers. This is a business and as much as we like the family feeling
    we must face the reality, we can't continue to carry people simply
    because they are here. If they can't contribute, can't be trained,
    aren't willing to relocate to work, why on earth are we continuing
    to send them a pay check! 
    
    If my group were vaporized and I had no skills that could be used
    in another group, why would I stay at DEC? Personally I'd want to
    be working, but wait I can only match 80% of my salary if I leave,
    and DEC is willing to continue paying me although I am not working.
    What motivation do I have to leave? No one is showing me the door.
    It's time to give some motivation, on pink paper.
    
    I am not advocating across the board cuts, I don't think that is
    necessary, but we need to move out the functionally unemployed to
    enable us to bring in people that we need to help us grow.

    Gail

    
    
    re: .36
    
    	It would be indeed an interesting excerise in the determination of 
    criteria that will define "deadwood". I'm sure no personal feelings
    would ever enter the decision making process :^). How would one de-
    termine said criteria if this person themself may be classified as
    deadwood? 
    
    	I've seen management turn perfectly good individuals into
    "deadwood" in the past 10 years , then due to hiring freezes etc...
    the "deadwood" that were trying to flee to productive organizations
    got stuck. 
    
    
    /Ray.

    Regarding a few of the last:
    
    (1) Comparing companies that are losers in a big way like Wang and CDC
    is incorrect and misleading.  Comparing Digital with companies with
    similar growth rates in sales and profits may make sense.
    
    (2) If the corporation announced a program in similar detail that
    reduced in a big way non-salary related expenses, then I'd have an
    easier time time trying to understand this.
    
    (3) Digital's stock rose 1/2 point on a day when the market (DJIA) was
    up 7.69 (May 18, 1989)

Just for fun, I've calculated the effect this salary delay would have on the
total earnings of a typical new DECie...

Assuming:

	$30,000 current salary
	8% average annual raise
	yearly salary reviews
	only one salary delay of 3 months

Conclusions:

	The employee would have the following difference in CUMULATIVE earnings
	over the next 30 years at 5 year intervals:

		Years            Cumulative Difference in Salary
                =====            ===============================
		  5                     $4401.56
		 10                     $9987.29
		 15                   $18,194.57	
		 20                   $30,253.75
		 25                   $47,972.65
		 30                   $74,007.52


Have a nice day,
Paul

		"While this action will result in lower expenses
		to Digital,  the primary motivation of this move
		is to give the employees greater  flexibility in
		how they spend their income."
	
	
	At least we didn't get that.

	
	I'm still  kind of numb after hearing this announcement.  I don't
	know how to  react.    For  me,  it  might mean forget about ever
	living in a larger house.  For other people, it might mean forget
	about ever living in their current  house.  (How many of you have
	ARM's?)   For Digital, i don't know what it means.  
	
	I listen to the dialogue between some who say  "this  will  cause
	much pain" and others who say "but  if  Digital  needs me to take
	this pain, then i will".  Then i  think, well if Digital needs me
	to take this, shouldn't i volunteer gladly to take  it?  I wonder
	if this isn't another case where some words left out  make  a big
	difference.  Digital needs this ....  For what?  
	
	On one hand, if Digital needed this to stay solvent, who wouldn't
	be  proud to do their part to keep our company in business?    On
	the  other  hand,  if  Digital "needs" this in order to make more
	revenue and  profit  next  quarter  during a slow economic period
	than they made  last  year  during  a  better economic time, then
	what?   Is the  message  here  that  revenues  and  profits  must
	continue to go nowhere but  up regardless of the economic climate
	and regardless of the cost in  human  terms?   Is the real bottom
	line  "everything  for  the  stockholder  and  nothing   for  the
	employee"?    Aren't  employees  people  too?    Even    if   the
	stockholders count ten times or a hundred times as much, how much
	will this one move do for the stock versus how much will this one
	move adversely impact employees?
	
	As i write, i'm just not sure i understand what this  move should
	accomplish.    Can anybody spell out for me, in dollars and cents
	if possible, what should happen if this  move is successful?  How
	much extra revenue do you get from a salary freeze?
	
	How do other people feel?  Is this a time for major sacrifices?
	
	Maybe we should all stay home and just be stockholders.

	The release has just appeared on LIVE WIRE.  It is (at this
	time) choice #1 on the U.S. News menu.


	--> :) John <--

    Re .47 (harrY):
    
        > ... Is the  message  here  that  revenues  and  profits  must
	>continue to go nowhere but  up regardless of the economic climate
	>and regardless of the cost in  human  terms?   Is the real bottom
	>line  "everything  for  the  stockholder  and  nothing   for  the
	>employee"?    Aren't  employees  people  too?    Even    if   the
	>stockholders count ten times or a hundred times as much, how much
	>will this one move do for the stock versus how much will this one
	>move adversely impact employees?
	 
    I don't think "the message" is anywhere near what your question
    implies.  Digital is a company that has _never_ paid a dividend
    on stock to stockholders, and personally, I don't expect the company
    to start the practice in the immediate future.
    
    Speaking broadly, in my opinion, Digital is facing several things.
    First, the company _has_ been growing, including the numbers of
    people employed; when I joined, there were less than 5,000.  The
    number's about 25 times that now.  These folk must be paid; the
    way to do that requires some number of systems, services, and/or
    supplies to be sold.  Additionally, Digital's not the only company
    in the computer business, and the computer business more than most
    is technology-driven: this requires Digital to expend resources
    in developing products that will keep us in a competitive position;
    and that requires expenditures beyond "just" those of salaries.
    
    I don't think the corporation is asking us to become fiscal masochists.
    
    Extrapolation on the basis of potential differences in salaries
    assuming a one-quarter slip are unrealistic, in that it assumes the
    corporation will be around and operating at the same level if
    adjustments _aren't_ made.  Is it painful?  You betcha.  Is it
    necessary?  Given the overall Digital culture, it probably is the
    most fair thing that could have been done.
    
    Steve Kallis, Jr.
    

Re .13: Yes we in Germany experienced the 6 month freeze about 6 years (?)

back. Since I am on international relocation to the US and my salary is paid
here I am stuck with the 3 months and may I am saying it is unfair that not
all DEC employees are 'covered'. But....

Thinking about this, here are some other opinions that may spur some discussion:

<flame on>

- In my opinion upper management has not learned its lesson from the last
	slump (excess manpower etc). 

- I do not see how a 3 month freeze solves anything. For sure it does NOT
	solve the underlying problem(s) (see above).

- Maybe this freeze is just a type of preparation and that more and stronger 
	measure are to follow.

- I like the idea of doing this 'tightening your belt' thing on an organization
	by organization basis.

- What do we save with this: (very rough calculation)

	assume 60000 employees with 40000$ average salary. assume a 5% raise
	the we get 60000 * 40000 * 0.05 = 120.000.000$. i quarter freeze is
	a savings of 30.000.000$. Isn't that just a drop in the bucket.

- MAybe we should really think about early retirement. NO, not for everybody
	but on a per orgnaization basis?

- I know people who said (!) they just wait it out until early retirement
	happens, then they'll be out the door. 

<flame off>

    After being up most of the day, the stock price dropped 1/2 point
    at the close.  DJIA was up 20+ points.

  And while Digital dropped by roughly a half a buck, I understand that
  Sun Microsystems was *STRONGLY* up.  Must be all that advertising
  they're doing about *HIRING* all those future ex-digits.

  Just *WHAT* are our bean-counters trying to optimize?  They certainly
  aren't optimizing either employee morale or the stock price.

                                   Atlant

Re 818.52:
    
>  Just *WHAT* are our bean-counters trying to optimize?  They certainly
>  aren't optimizing either employee morale or the stock price.
    
    Well, for one thing, they're trying to make sure we're financially
    strong enough to continue butting heads with Sun Microsystems, a
    small but very capable competitor!
    
    And they're also trying to appease Wall Street - which punishes
    us severely when our earnings don't meet their expectations (which
    are tend to be high since growth is what has to be offered in lieu
    of a dividend).
    
    In the current environment of greed-induced takeovers, Digital dare
    not let its stock price fall much further lest we become the latest
    takeover target. 
    
    To protect the stock, earnings have to be shored up. Given the current 
    tepid demand picture in the U.S., this means keeping expenses down. 
    Since "people costs" represent a major part of our cost structure,
    something has to be done to contain these. 
    
    What are the choices?
    
    o Salary Freeze
    o Salary Reduction
    o Forced Leave Without Pay
    o Layoffs
    o Early Retirement
    
    The freeze may not be the best answer but it is one of the least
    drastic and most fair (everyone in US is in the same boat).
    
    While this temporary measure is in effect, we can either GROW out
    of the problem or be forced to consider other alternatives from
    the above list.
    
    I hope we can generate sufficient new business to GROW out of the
    problem...
    
    Bob

    I just don't know what to say.  I've been on board for 19 years
    now.  I saw this coming, but I just could not belive my company
    would do it to me.  My ARM is up $300/mo.  gas up 15/gal, food
    up, inflation at 6%.  I was here before when there were wage freezes.
    I understood them.  I don't understand this one.  I had a nice secure
    fixed rate in MASS, but the NH group wanted me up north.  Could
    pay for my move. So I did, and had to take the ARM.  And now this
    after two years of poor wage increases.
    
    I'll do what I have to.  I get mad though seeing all the waste and
    noone doing anything.   I get so many newsletters that won't even
    take me off the mailing list.  I see people leave my group for other
    companies and groups and I have to get the remaing people to do
    more/work more hours because I'm not allowed to replace them.  And
    what do I tell those in my group working the extra time?
    
    I hope the *company* benifits from this.  I hope that some fat cat
    doesn't benifit from selling his stock if stock prices increase.
    
    Somehow this points out that we're not one company.  If Europe
    can get raises.  I know they're selling more than us, but I though
   t that we supported them?
    Maybe I've said too much already.  I'm still confussed, stunned,
    bitter, and disappointed.

    ;-(

re: .44
    
>    	It would be indeed an interesting excerise in the determination of 
>    criteria that will define "deadwood". I'm sure no personal feelings
>    would ever enter the decision making process :^). How would one de-
>    termine said criteria if this person themself may be classified as
>    deadwood? 
    
It almost requires an independent review organization.  Deadwood in the
management space is especially dangerous...if you let a dud manager pick
the people who are going to be laid off, he or she may name the people
who are most politically threatening by comparison--the folks who are
the most innovative or who regularly put in more hours of hard work than he
or she does.  On the other hand, you can bet a bad manager will keep around
all the apple-polishers and cronies who never fail--because they never commit
to anything that has a real deliverable or that requires ingenuity and grit.

Tough problem.  I'm sure that better minds than mine are wrestling with it
in the higher echelons of the corporation, "even as we speak".
								paul

RE 818.54:
    
>    I get mad though seeing all the waste and noone doing anything.   
    
    As Jeff Gibson stated in today's press relase:
    
    "We're doing everything we can to reduce discretionary spending.
    The amount of money that we spend on travel, for example, is being
    reduced."
    
    So the new austerity program is not limited to just pay freezes.
    
    It appears to be the start of a comprehensive effort to get our
    costs in line with our revenue picture and to do business much more
    efficiently than in the past.
    
    Perhaps the people who will be most upset will be those whose
    subsidized vacations (thinly disquised as business trips) will be
    harder to come by...
    
    Bob
    
    

re:53 and .54

I've been here for over 19 years also and this is probably the
first time I've said anything  here but I have two basic concerns
around the recently announced freeze and who the H** is our competition.

I've been through three or four (maybe more) wage freezes and, while they're
tough to handle for awhile, I'll survive somehow (even thou my rent just
went up 25%).   What concerns me more than wage freezes is the, what I believe
to be excessive, extremely expensive sales, marketing, etc. meetings that sem
to continue to go on during these freezes.  I don't have a problem with these 
style meetings, nor do I question their purpose.  What i do question is their 
style. I, literally, have seen significant managers stand up at rather lavish 
meetings and make such statements as (paraphrased) "I guess I have to make a 
statement or two to justify all this."  I could justify lavish meetings if
customers were in attendance (keep up the image) but these were 'woods 
meetings"!!!!


My second concern is with the CONSTANT mention I hear of SUN.  Has anyone
recently looked behind us (in the Fortune 500 for example) and, by
any chance, happened to notice where H.P./Apollo happens to be.  In my
position
I'm hearing an awful lot of reference to SUN however in personal conversations/
presentations yet, when I read the MARKETING notes file, I seem to remember
statements such as 'lack of durability/agressiveness' attributed to non-DEC
reviews.

Anyone seen any roses lately (to smell)??

Ray.

Re: a few back...selling stock

Seems that a couple of folkes are going to sell their stock now...


    From the DJ News Wire:

    "Two DEC Vice Presidents sold nearly all of their DEC stake in late
    April. Don Busiek sold 4,500 shares, which leaves him with only 336 shares.
    William Johnson sold 4,500 shares, leaving him with 857 shares."

    Public information from recent filings with the SEC.

re: .54,.56
    
>>    I get mad though seeing all the waste and noone doing anything.   
    
I believe it was said at the state-of-the-company meeting that "it's all up
for grabs" as far as solutions go--i.e., if you think you have a creative
solution, now is the time to push it, even if your management has not backed
you in the past.

Maybe in addition we should be encouraging all employees to point out where
money is being wasted in the corporation.  I don't want to see a Red Guards
"denounce your enemies" mentality, but all of us probably see instances where
phony cost justifications are papered together to finance something that is
basically a sop to somebody's ego.  Upper management should get a flavor for
what some of these situations are.

Does everyone on the marketing side really NEED a personal printer on their
desk, 10 years after we soaked up the James Martin blather about a "paperless
society"?  Do non-technical folks really get enough of a productivity boost
from having a workstation on their desk to justify the extra expense beyond
giving them VT320s (especially when technical folks in the same organizations
go without)?  Does anyone absolutely need a dedicated phone-line in their
home for Async-DECnet, paid for by Digital?  Do we need to put in dedicated
circuits between DEC facilities so that someone can remote PRINT from one
facility to another rather than doing a remote COPY and local PRINT?

Looks like another reason to have an independent review board for searching
out deadwood and assessing wasteful practices.  You'd just have to be REAL
careful that the review board didn't itself become a haven for duds,
bureaucrats or has-beens.  On the other hand, maybe K.O. should just hand
out a corporate "Golden Fleece" award like Sen. Proxmire used to do for
the U.S. government.  Can the shameless be shamed into reforming?
							paul

    As a complete tangent, what is an ARM? A? Rate Mortgage?

	An Aside on Abbreviations
	
	Yes, an  ARM  is  an  Adjustable  Rate  Mortgage.    I  apologize
	profusely for using the abbreviation back in .47 without defining
	it.  It has  always  been  a  pet  peeve  of  mine  the number of
	abbreviations that i see in the Notesfiles and elsewhere that are
	not  defined.    A good rule  of  thumb  frequently  followed  in
	newspapers and such is to always define an abbreviation the first
	time you use it in a piece just  to  make sure everyone knows it.
	Don't  assume.    An  exception might be made for  highly  common
	abbreviations  that  are  in  everyday use, e.g., "e.g.", "etc.",
	etc.   In  hindsight,  i  realize  that  ARM  is  not  quite that
	universally known.   I  don't even know if they have ARM's in all
	countries yet.  Anyway,  when  anyone starts throwing acronyms at
	me with which i am  unfamiliar,  i  interject, "TMA!  TMA!" After
	they chew on it for a few seconds, most figure out what it means:
	Too Many Acronyms.  
	

	About ARM's

	ARM's have been  very popular in the U.S.  (United States) in the
	80's.  The mortgage  starts out with an attractive rate the first
	year.  After that, the rate usually will go up, unless prevailing
	interest rates go way down.  A good ARM has caps or limits on how
	much the rate can rise in one year and over the life of the loan.
	Borrowers  qualify based on their ability to  make  the  payments
	during the first year.  The lender "gambles"  that the borrower's
	income  will  rise  if  necessary  to  meet  higher  payments  in
	subsequent years.  Usually, this is not a bad gamble.    But this
	year with higher  medical  costs,  higher  car  costs  and taxes,
	longer raise intervals,  and  now an indefinite wage freeze, most
	people who depend entirely  on  their  Digital  wages  for income
	effectively  make  _less_  money  (in  terms  of  real   dollars,
	adjusted for inflation) than they did one  and  two years ago.  I
	hasten to add that not all of this  is  Digital's fault.  Digital
	did not cause health care costs to rise.   Digital  did not cause
	the  IRS  to  crack down on the company car plan.    In  fact,  i
	believe Digital spent a considerable sum fighting the IRS on that
	one, and i for one am grateful.  At the same time  however, let's
	not  forget  that it is Digital's discretion on how much of these
	higher costs to pass on to the employee.  

	I especially worry about  those  who have an ARM on their current
	home.  If their mortgage  payment  goes up, they are committed to
	pay it.  Of course, most  will  still  be  able to eat.  But their
	standard of living might go down.   This is despite the fact that
	their contributions to the company continue to be  more  valuable
	as they grow in experience.  This is also,  correct  me  if  i am
	wrong,  at  a time when  the  company's  overall  gross  revenues
	continue to break records despite an  economic  slump.   Again, i
	fail to see the gloom and doom  proclaimed  or  implied  in other
	replies that would require such austerity measures.  
	

    Re: .62
    
    If need be, what is stopping people with ARM's from getting a second
    job to help cover the extra cost?
    
    I can remember when my father had to work two jobs for a while to
    make mortgage payments. So, its not a new concept to have to consider.
    
    A lot of people can have a lot of alternatives if they have ARM's
    that raise and they now need an extra $200.00 a month or so. They
    might NOT want or like working a little extra at night or on a
    Saturday, etc, but there are alternatives.

    Gale

Well, Pat, if you'll take another look at note 818.8 question 10, you will see 
that the salary delay will slide out EVERY future salary review by the length
of the delay period.  So that every employee will receive each future raise
three months late.  My calculations were based on the summation of the 
difference between the old salary level and the new salary level for the fiscal 
quarter delay each year.


From note 818.8:
  
 >   10 Will an employee's salary review date change permanently?
 >   
 >  	Yes.  Every employee's salary reveiw date will advance according
 >   	to the length of the salary increase delay.  In addition, the
 >   	timing of an increase also may be extended further based on the
 >   	employee's performance and position in the salary range.  Please
 >   	refer to the Salary Management binder, Section 5, for more details
 >   	on timing of increases.
   
Paul 

reply 64 revised
    
    A while back some incorrect arithmetic was entered regarding the
    financial impact of a 3 month salary freeze.  I know from experience
    that these things get extracted and spread like forest fire, so I
    contacted the author.  He or she didn't reply to me by mail or here so,
    here's Pat Sweeney's financial model.  No numbers here are real, if
    you think you know them but didn't read them in a press release or SEC
    disclosure, then don't post them here.  Rather than present the
    formula, I decided to present the result, it's close enough for
    discussion.
    
    Average Digital salary $30,000
    Average Digital raise 6%
    The amount of that raise $1,800 annualized
    The amount of that raise deferred for 13 weeks $450
    
    Digital employees affected 75,000
    Profit "impact" $34 million for a 13 week freeze
                    $68 million for a 26 week freeze
                   $136 million for a 52 week freeze
    
    If you know the stock price impact of a $136 million cut in Digital's
    expenses, then please send your resume to the agencies looking for
    analysts in the Wall Street Journal.
               
    (thanks to Thomas Siebold for some suggestions)
                                                   

    Re .65  -< The damage extends for the rest of your career...(at DIGITAL) >-

    This analysis (saying that this affects the rest of your career at
    Digital) is really playing with funny money. No raise, no percentage
    increase is ever guaranteed in the future. Another approach to
    cost-saving (when immediate results aren't as critical) is simply to
    reduce the average raise by a percent or so. Over time, this could have
    as large or larger impact to "the rest of your career" as a raise
    deferral. Similarly, if in good times the average raise is a tad
    higher, over time the effects of a wage deferral can be eliminated.

    The bottom line doesn't come in the short term, but in the long term.
    If, five years from now, the average salary for those affected by the
    freeze lags the industry by the equivalent of one quarter's increase
    (or whatever the final duration of the freeze comes out to), then, yes
    it affects the rest of your career. I seriously doubt this, since it
    would put Digital at a significant disadvantage in hiring and keeping
    people.

    If you look at history, you'll find a lot of people currently at
    Digital who lived through two or more wage freezes. If there is any
    evidence that these people lag industry wages by the accumulated amount
    of the wage freezes they experienced, I'd be extremely surprised. Why?
    Because these things tend to even out over time, by the mechanism I
    cited in the first paragraph. In the short term, it's a nuisance,
    especially if you've made financial commitments based on anticipated
    increases (i.e. gambled). In the long term, it's likely to be a no-op,
    provided the Company gets back on track.

    Concentrating on which ought to be our first concern...

    Gale, (.64), your right about the 2nd job.  Thats where I'll be.
    But guess who looses again?  The extra time I put in because we're
    already short handed.  Guess where the extra time goes.
    
    ed
    

    1. This topic made the front page of The New York Times Business
       section on Saturday.

    2. I think the word 'delay' rather than 'freeze' is a great marketing ploy.

    3. I'm really confused. 
       For *_YEARS_* we have talked about customer satisfaction.
       Seems to me, employee satisfaction is much further down on the list.
       Yet, we are customers of DIGITAL too, so this seems like hypocracy.
    

    There seems to be a substatial number of people who were either
    given 0% raises, or 0% now, and wait until July (who then
    got frozen out of it). 
    From what I've heard, its been happening more than not.
    Is this a local phenomena, or is this practice hapenning all around?
    Also, I lived through 3! years of 0% raises at AT&T (across the
    board), and the layoff of %20 of my group. Over 80,000 people
    were laid off divison-wide. I'd rather see 3 months wait than that carnage.
    Eventually they lost the top 4 people in my group. Three monthes
    is a "wait-and-see" length of time. Anything measured in years
    would indicate "career-modification" moves  IMHO.
    

    Assuming the numbers in .66 are correct:
    
    $34M in savings per quarter divided by 125M shares outstanding (as
    of 4/1/89) is only 27 cents per share. Even this 27 cents per share
    should be reduced (by about 25%) to 20 cents per share to account
    for the additional corporate income tax that Digital must pay.
    
    As a reference, Digital's after-tax profits for the most recent
    fiscal quarter (ending 4/1/89) amounted to $2.05 per share. I have
    difficulty believing that a short-term boost of about 10% to quarterly
    earnings is worth it. If a few key people leave because of this,
    and major schedules slip as a result, watch what will happen to
    earnings then!

    the industry may be in a slump, but MANY customer would just love
    to get their hands on some DECies who know their way around - due
    to the publicity, customers know about the freeze, and are in a
    better position to 'entice' people away from DEC...

    I agree.  Let's look to our individual areas to uphold accountability.
    Everyone does not deserve to share in this action.

    I think that one of my biggest problems is knowing how much waste
    there is in the corporation. 
    When people start to leave, and the effect is felt, DIGITAL will
    fall back to its old behaviour of going out to hire people again.
    Of course, the salaries will be much higher than if they would
    have treated those people 'right' in the first place.
    
    By the way, does DIGITAL also put salary 'delays' (let's call a
    freeze a freeze) on external or independant consultants ?
    What happens to those individuals (and I believe that ther number
    is NOT insignificant) who are outside contractors to DEC ?

    /Jeff    

RE: .64,.65

This astonishing insistence on ignoring the realities of a pushed out salary
review date with NO retroactive increases is too much for me...I guess I just
have trouble seeing the mushroom theory in action at DEC.

Paul

    What upsets me isn't that our reviews are delayed at least 3 months,
    but the fact that in this "open-door" company, my husband and I
    heard this news on the radio and TV, and read it in our newspaper
    3 DAYS BEFORE our managers told us.  That stinks.
    
    Robin

    re: .66
    
    My totally unofficial estimate was $34 million in savings. Sonny
    Monosson, a professional DEC-watcher told the Wall Street Journal in a
    story that appeared today it would be between $30 and $40 million for
    the quarter.  The official Digital estimates are "privileged internal
    information" according to the Wall Street Journal.

    re: outside contractors
    
    I believe that an article in the WSJ last year put the figure at
    20%.  

From note 819, John Sim's 
    
   >   SLIDE 2:  PEOPLE--DIGITAL'S MOST VALUED ASSET

>    People are our most valued, most envied, and most sought-after 
>    resource.  They are what makes us go...and we had better take the 
>    time to fully understand and appreciate the extent to which this 
>    statement is true...or they could be what makes us stop.  
 


sure

A quick run of the quote program seems to show that Wall Street is not
impressed by the action...DEC is way down...

John

    
    If DEC shut off the lights in facilities over the weekends, we
    wouldn't need a salary freeze.
    
    I came into MR01 this past saturday (when it was VERY nice out), there
    was barely a person around, but all the lights were on.
    
    I thought it was VERY disgusting.
    
    /prc

    re: .81
    Not only lights -- people go home leaving their terminals, printers,
    LN03's, etc. blazing away.  It's really noticeable if you work late
    or on weekends.  

    Anyone know how much DEC spent for the recent purchase of the
    Gulfstream IV BizJet than can haul maybe 10-12 people?  And also
    how much does it cost to operate/maintain it?  Also who uses it?

    re .82 (leaving machinery on 24hrs)
    
    
    My ex-company did a study that showed that hardware that was left
    running for 24hrs a day and a weekends actually suffered fewer faults
    than that hardware switched on and off each day. So it may be more
    cost-effective in the long term to leave the equipment on.
    
    Comments from hardware types ?
    
    .simon 

    re: .76 (News media carries report 3 days before mgmt tells employees)
    
    As of this date, I have not received any "official" communication
    of this matter.  I pointed out the memo in this conference to one
    of the UMs around here last Thursday.  It was the first he had
    heard of it.  I've yet to see a memo from local channels -- or even
    hear a verbal confirmation from mgmt.
    
    I'm just glad someone had the opportunity to post it here.
    
    -- Russ

    
    re .84
    
    Oh I agree as far as systems go, but as far as over all facility
    lighting is concerned, it should be "ON" on a needed basis only on
    weekends and holidays. Same goes for monitors and printers.
    
    /prc

I suspect upper management sees some major changes in the company's market
position.  Digital is being forced to compete in a commodity market with
non-proprietary technology (UNIX and MIPS).  We're talkin' high volumes and low
profits here.  These are untested waters for Digital.

At the moment, we're still coasting on VAX/VMS revenue.  However, the market is
changing much faster than most of us realize.  I see the salary freeze as a
means of checking our expenses until we've established a presence in the UNIX
workstation/server market and can better predict our future expenses and
revenues.

I've worked for three other companies, ALL of which have initiated PAY CUTS on
the order of 10% to 20% when times got tough.  Granted, these were much smaller
companies that were hit particularly hard during the slump in the early 80's;
but, like Digital, they were taking the actions necessary for survival.  The
last company I worked for, Ridge Computers, went out of business despite these
actions.

Though I don't like the fact European and other non-US employees don't have to
share the hard times, I also understand that it would be even worse to shake
them up when they're generating the bulk of our profits.

Let's face it, times are changing and the growth from VAX/VMS technology is
leveling out.  I'm happy to see that management recognizes this fact and is
taking actions to deal with the situation.  Let's just hope a three-month
salary freeze is the most drastic action they have to take.

RE: Note 818.80 KYOA::MIAN
>A quick run of the quote program seems to show that Wall Street is not
>impressed by the action...DEC is way down...

        Off 7/8 while the market is also down 10.63 at 12:30; doesn't
        seem like much of a comment by anyone.

        	Mike

    Rumors I've heard also related to cost cutting:
    
    1) No internal transfers, unless absolutely critical.
    2)  No funds for relocation expenses.
    
    Any truth (I'm in never-never land at a customer site)

RE: Note 818.56 by AKOV76::BIBEAULT 

>   "We're doing everything we can to reduce discretionary spending.

        Who's we?! I just don't see it.

        	Mike

    The following is from VTX LIVEWIRE:
    
                           Letter from Ken Olsen
   
      We had to delay salary increases in the U.S. because of difficult 
      changes Digital is now facing, due to both internal and external 
      pressures.  These pressures come from shifts in the general 
      business climate, from competition, from advancing technology and 
      from the changes we've made in the way we do business.
    
      This is an exciting fast moving business, and we must continue to 
      make substantial investments in the technology and products we 
      need for the future.  When sales in the computer industry in 
      general slow for one reason or another, we have to reduce our 
      costs and better focus our efforts to maintain profit levels.
    
      We need to shape the company into business units we can understand 
      and manage and that can set clear directions for the sales force.  
      We need to focus our efforts and assets toward customers, and make 
      sure the people who deal directly with customers have good training 
      and clear signals.

      We have the best people, the best products and magnificent technology.  
      We've been able to introduce products faster this last year than we've 
      ever dreamed we'd be able to do.  We've promised a 50% improvement 
      each year in our VAX systems.  We've introduced a whole line of 
      UNIX-based systems.  
    
      We've just got one problem:  while we were developing products and 
      technology, we needed to sell more of what we had.  We've been through 
      pressures like these before and handled them well.  It's all part of 
      being in a dynamic business.
    
      At times like these, managers should look at employees as they would 
      their own families.  You'd encourage them to grow and to learn.  You 
      would be firm with them and hold them to plans.  You'd also challenge 
      them and make the job exciting.  That's what we should do with everyone 
      who works for us.  When we find that we have an imbalance of people -- 
      too many here and too few there, too many with this skill and too few with 
      that -- it's our responsibility to work that out thoughtfully and with 
      careful consideration.

      If we do that right, then I believe we can grow to become a much larger 
      company with about the same number of people we have today.  That means 
      jobs are going to get bigger, and opportunities will be opening for our 
      people to grow.

    All this talk about - "morality", "fiduciary responsibility", "fixing
    expense related trends"!!!!! How Naive!!
    
    A company has NO MORALITY - it owes NOTHING to its employees - and
    doesn't make business decisions based on those considerations!
    
    This delay (approx $30+m to Q4s expense line) does not accomplish
    ANY financial goal at all - with $1b in the bank there are a lot
    of ways to play with large numbers!
    
    What it DOES do is send a "message" to wallstreet that DIGITAL (upper
    management aka Ken Olsen) is "concerned" about the companies financial
    performance from a stock perspective and is willing to take measures
    to improve our performance.
    
    The fact that it is done on the backs of the employees is obvious
    - we can't defend against it
    - it's guaranteed to work
    - it looks "real serious"
    - it's CHEAP
    - it doesn't upper level management's careers
    
    I expect no less and no more from DIGITAL!

    I entered .0 without comment.  Now, here's mine:
    
    I don't like it any more than the rest of you.  I survived the previous
    freezes; I'll survive this one.
    
    Digital never *promised* me an annual salary increase.  I never have
    expected them to keep the promise they never made. This is  training
    from previous employeers (mostly government, where going from year to
    year on a grant made you feel good if you just got to keep the job and
    was elated if you got an increase).
    
    Given that, I've NEVER planned on an increase, and have never spent it
    until I got it in my first paycheck.
    
    I've been with DEC 10+ consecutive years, and 13 total.  I've seen and
    survived freezes before, both company wide and those that particular
    organizations have chosen to do.  Keep a stiff upper lip, grin and bear
    it (and all of those other cliches) and over time, things will equalize
    themselves.

    re .87
                      
>    Though I don't like the fact European and other non-US employees don't have to
>share the hard times, 
    
    As has been stated officially, and repeated MANY TIMES, each country
    will be reviewed.  There are some countries outside the US that
    are having trouble meeting budget and they may well resort to a
    salary freeze as well.

    Please note that all managers are not alike...
    
    As far as notification of the "freeze" is concerned, we were informed
    of it last Wednesday or Thursday as soon as our management was
    informed.  They went out of their way to find everyone that was in the
    office and personally inform them of what would be occuring.  They then
    got on the phones and called each of the residents at customer sites
    and informed them.
    
    I commend them for this course of action!

    re .95

    I got the letter/questionaire (VAXmail) with a comment saying that the
    "silver lining" was that it would be "good for the stock."

    Rather tasteless, I think.

    /Peters

                                 
    
    Lost  Employee Moral.
       
    Lost  Productive Employees.  
    
    Lost Loyalty (Is this really necessary?)
    
    Lost Employee Incentives.
    
    Lost Potentials.
    
    Lost Customers (afraid Digital is in trouble).
    
    

    Has anyone anything POSITIVE to say here?
    
    Just wondering..

    
    
     I am POSITIVE I am confused and uninformed. I have tracked this
    through unofficial channels. My only course of action is to wait
    and see if promises made are delivered. I am DIGITAL, I am a
    stockholder, I am a CUSTOMER. I still have FAITH. Things will get
    better.
    
    Mike Z.
    ( out at a customers site)

	  .92 says it all.

>    Has anyone anything POSITIVE to say here?
    


         YOU BET!!

         I still have a job.  And after 20+ years with Digital and more than
         a few salary freezes, I am comfortable that when this all blows 
         over I'll still have a job.

         Not JUST a job.  A job that includes many things that I really
         like to do surrounded by people I respect and whose company I
         enjoy.

         I'm not thrilled about the salary freeze, but I'd much prefer
         it to walking the streets.

         Betty

re: .98 by Andy

   I'll second Betty in .101! Having worked for DEC for over 11 years I'm
well aware of what other companies in New England (or elsewhere in the US)
in our industry (or just about any other industry, for that matter) do in
times like these - sure glad DEC doesn't react that way.

-Jack

    RE: 102 & 101 for .98
    
    	I'll third it! With 16+ years (minus a few months when I had
    to try it on the outside) with DEC, I'll settle for what I have,
    wage freeze and all. I've seen them come and I've seen them go.
    Also the hiring Freezes, if put back to back, I would have been
    the last person hired at DEC in March of 73. 
    	After it's all over, corporate will look at where we are in
    relation to the other companies wages and adjust as required. DEC
    has never been a leader in wages, but wants to stay competative
    so we can hire good people. I'll just wait and see.
    	Greg

    
    
    Set Flame/Intensity=Mild
    
    I'm really amused reading this note by all the Digits who are crying on
    their keyboards, saying "I didn't get mine". If you are not happy at
    DEC, go to Wang, go to Unisys, go to Data General, but whatever you do,
    if your going to waste your productivity whining and complaining,
    please spare us. 
    
    I was very lucky back in 1984 when I got into this company as a
    Computer Operator. Since then, I've been blessed by Digital and
    have gone up the ladder to an Engineer Aide, and now to a Software
    Engineer (just in time I might add) and I'm real ecstatic about
    getting a VAXstation 2000 to do my job with, instead of the 100's
    and 220's I've been using for ages. So am I uset? No. Am I crying 
    over a salary freeze? No. What's the big deal here anyway? We have 
    a job. Be happy and do it instead of complaining about money we don't
    have anyway. 
    
    Have some patience and get back to work!
    
    /prc

...I have 10 years in DEC, and survived the last freeze, so I figure I will
survive this one. It doesn't thrill me, but at least I am still collecting 
a paycheck (which is more that several friends of mine from other computer
companies can say).

					/ed/

    Concerning note .89 - Again, anyone heard any truth to this? Should I
    give up my job search (now on 5 months)? 

    Sigh... It sure would be nice to know what's going on - salary freezes
    I can handle, but not knowing if I can even get a new job is worse...

    rb 

    Just a comment about other parts of the real world.  My wife is
    a teacher.  They were 2 days from going on strike because of they
    way negatiations were being handled.  They were looking for 2-5%
    increase and all benifits remain.  The school board wanted 0% and
    take a handful of benifits away.  The teachers said ok to the 0%
    but if you touch our benifits we walk.  The board backed down at
    the last minute.
    
    Even though Canada hasn't been affected yet.. I think we are lucky
    that we don't have an employer like the school board.
    
    dmm
    
    PS. At my last job my increases added up to $1500 over 4 years.
    My neighbor, who's in the oilpatch, had a $900 per month cut a
    year ago. DIGITAL ain't perfect but the real world can be even worse.
    

    re: .106
    
    FWIW, we just had a few folks join our unit from other orgs in our
    Area.  I don't know about transfers to other Areas, although KO's
    memo seems to indicate that transfers may be "the right thing" when
    imbalances occur.
    
    IMHO, I suspect that a ban on transfers may reflect the fears of
    local management and not a stated US policy.  The smoke hasn't
    completely cleared yet, so I suggest you keep up your efforts until
    someone tells you to stop.  Since your career goals in Digital are
    largely your own responsibility, I'd assume that you should continue
    until someone _in authority_ tells you otherwise.  Keep in mind
    that policy seems to be moving quickly at the moment -- any door
    shut right now might be open by the time you find something.
    
    Have you asked your current manager what the current policy is
    regarding transfers?
    
    -- Russ

    For those of you trying to calculate the benefits/lack of might want to
    keep the following in mind:
    1) As a former small business owner I found that local, state, and
    government taxes added 20% to my employee's salaries (this will vary
    from state to state).  This does not include any benefits that would also 
    be based on salary.  Thus, a delay in salary has a ripple effect on
    other expenses not just the salary itself.
    2) stock price directly affects anyone in the stock purchase program
    (if you're not in the program you could be making a minimum 15% return).

    TWO cents worth from one who has been there.
    My first job in computers was only three years old when the area
    manager came into the office and called a third of us into a room.
    After about five minutes we were lead one at a time to another room
    where we were given our pink slip with the notice that we would
    get two weeks wages in leu of notice. That was it.
    
    The next company was a little better. I heard via the saturday morning
    paper that they were dropping the division. Those in central Mass
    probably remember that one.
    
    Now with DEC for seventeen years I am going to retire. If I wasn't
    I would just be biding my time for it to all blow over as I survived
    the previous freezes by getting a better raise after the economy
    improved. DEC has been very resilient to the economy. Look at some
    of the other companies that are in deep trouble. I would hate to
    be a new hire with most of them.

    RE:.98
    
    Why is a person who is not affected by the salary planning delay
    asking for positive things to be said about it?
    
    Patti
    

    Agreed.  At one previous employer, we got called into the main office
    on a Friday to say that we were merging with a larger firm, but that
    everyone's job was safe.  Within two weeks, 10 per cent of the firm
    had been laid off.
    
    The employer I had before DEC was even better.  I was standing in a
    distributor's office in Milan, Italy when he got the word from my boss. 
    I hadn't been informed, and had no travel advance...was working on out
    of pocket expenses, SOP.
    
    Yes, I'd rather be wondering how long the freeze will last than
    worrying if I'll be in the next round of layoffs...
    
    Marge

    Actually I was asking if there was anything positive to be said about
    the delay. If there is, will someone say it?
    
    Not to denigrate the positive thoughts shared here, Digital has a lot
    going for it, but I really wonder what the background to this delay is.
    
    Andy

>Since joining DEC, I have never had to wait to be paid and none of my paychecks
>has bounced (yet).  Those of you who have worked all your life a DEC have
>certainly led a sheltered life.  It's a jungle out there in the real world! 

        Having lived through at least one bankruptcy, I guess freezes
        don't bother as much. It was a shock to walk up to the teller
        in the bank you have done business with for years and be told
        you could not cash your paycheck. You must deposit it and then
        draw on your account. That way the bank can hold you personally
        accountable.

        Not meaning this as a statement one way or the other. Still
        waiting to see what happens next... as always.

        	Mike

    In the study Digital had done on the five year cost of network
    ownership it was discovered that the real cost of staff was about
    TWICE THE SALARY PLUS OVERHEADS (training, leave, etc, etc).  This
    makes me wonder about the validity of a salary freeze as a means
    of getting costs back under control.

    Have to agree with the sentiment in .101-.104.
    
    I came to Digital a few years ago from another local (NE) computer
    company.  HINT:  It was Apollo.
    
    Not only is the cultural environment (I can go on for hours about
    this) refreshing here, but from my vantage point there are alot
    of other aspects of working at Digital that are certainly more
    important than the size of one's paycheck.  I guess you have to
    work elsewhere to really appreciate what we have here.
    
    Anyhow, Apollo was not a pretty place to be in the mid-80's.  I
    would have been tickled pink to have my salary frozen while I was
    there.  Instead, we were forced to take a 15% paycut for 3 months.
    This was the good news.  The bad news was that hundreds were laid
    off at the same time.  I was thrilled to take the paycut, as this
    announcement came immediately after the layoff.  There's something
    to be said about still having a job.  
    
    Apollo did something shortly after the layoff and during the austerity
    program that I'll never forget.  While in the midst of the salary
    reduction program, Directors and above were issued $10,000 bonuses.
    Apparently, one of the engineers in my group had the same name
    (including middle initial) as one of the directors and he received
    the bonus check by mistake.  Imagine what your reaction would be
    if you were brown-bagging your lunch, car-pooling with neighbors,
    and cutting back on your personal lifestyle because of a paycut,
    and the company you work for has the audacity to cut senior management
    a $10K Christmas bonus.
    
    Needless to say, I started looking for a job shortly thereafter.

    Mark.

    	Notes do offer higher level management some feed back on how
    the wage freeze was viewed by the employees.
    
    K to J. " So how did they take it ?"
    
    J " Well I've been reading Notes and it seems that they love working
    here so much that the freeze is not a problem "
    
    K " Could we lay some off ?"
    J " Yes but I think they go for a 10% reduction better and they
    love to be retired early "
    K " We will have to sit and "think" on this one......" 
        

how about....


J.  to K.   Ten percent isn't too bad, a lot of them will say " Oh well
            could'a got laid off instead..


K           Well, how we gonna get rid of a few with out laying them off?

J           Make it 20%....

K           No, lets move springfield to CXO..(colorado) and vice versa..
            That'll shake out a few...

J           Of course we still have the early retirement plan at bay..

K            No way, if I staying in at 67...they can too...


.....to be continued...           

    Monday's Wall  Street Journal had an article (pg. B4) in which one
    analyst  suggested that Digital will try other means (unspecified)
    to "encourage attrition."

--David

>>   At times like these, managers should look at employees as they would 
>>   their own families.  You'd encourage them to grow and to learn.  You
                                                                      ^^^
>>   would be firm with them and hold them to plans.  You'd also challenge
     ^^^^^ ^^ ^^^^ ^^^^ ^^^^ ^^^ ^^^^ ^^^^ ^^ ^^^^^
>>   them and make the job exciting.  That's what we should do with everyone 
>>   who works for us.  When we find that we have an imbalance of people -- 
>>   too many here and too few there, too many with this skill and too few with 
>>   that -- it's our responsibility to work that out thoughtfully and with 
>>   careful consideration.

Did KO really say this? I find hope in these statements, especially the
underlined sentence (my emphasis).

I'm no fan of matrix management (at least as practiced by Digital).

Vicki Meagher

        < Note 818.106 by WEDOIT::BELDIN >

>>  Concerning note .89 - Again, anyone heard any truth to this? Should I
>>  give up my job search (now on 5 months)? 


        I'm looking  myself  and there are jobs available.  It depends on
        what the job  code  is  and  the  group/organization.    Ask  the
        recuiter on the posting in the VTX Jobs Book.


                                                        Best of Luck,

                                                            Rich

    RE .-1
    
    Regarding internal hiring. I'd love to find some good Senior or
    Principal Software Engineers to work in IBM Interconnect Engineering.
    Unfortunately I can only get reqs cut if I find a suitable person.
    So without a req number I can't get the job into VTX JOBS. And without
    the entry in VTX I can't find out about candidates. And the JOBS
    notesfile wasn't much help last time I tried that.
    
    So if there are all sorts of internal candidates looking for jobs how
    do I find them?
    
    Dave

Dave
	that doesn't make any sense at all. We put out OJP's against new reqs
without knowing who will fill them - why can't you?

Andy

    After reading many of the previous replies, I would like to add my 2 
    cents worth.

    First, is the company really doing poorly, or are we doing poorly 
    AGAINST what we forecasted we would do? If the first case is true, 
    than I have no problem with going along with the action. If the 
    second case is true, then I get the feeling that we are paying a 
    big price for a bad job done by a few.

    Secondly, if the move is to increase attrition, then I think it is 
    the wrong way to go about it. In many cases, it is not "whining", 
    but economic neccessity that causes people to complain about such 
    actions (as has been mentioned before). There comes a point when 
    "tightening the belt" starts becoming painful, and there are
    those in this situation. In times and places where this occurrs,
    the "better performers" are usually to first to be able to find other 
    jobs.

    Thirdly, I agree that other companies can be much worse to work for
    (I also have been there).There are, however, many companies that could 
    be just as good to work for. People in the field come in contact with 
    a lot of these places. We (Digital) will pay a big price if to many of 
    our revenue generatoring personell suddenly start finding greener 
    pastures. Let's not make those pastures appear any greener than they 
    might already be!

    -- Kevin Phillips

    If the delay is suppose to be good for the stock and a 'show' for
    Wall Street, how come the stock is dropping like a rock?
    

    Would the false rumors about Shields have caused it?
    
    							Pat

    I'm sure that a better approach to increasing profits would be to 
    reward  productive employees with significant raises.  The last few
    years people have been working hard to keep pace with inflation.

    Basic psychology  suggests that management is being penny wise and pound
    foolish by removing incentives.

    As someone said, where's the carrot?

    re:.128
    Probably 'cause the stock market doesn't see it as a big enough step
    in the right direction.  If Digital ever anounced a lay-off, the
    stocks would go through the roof.
    
    Chris D.

    I saw where a vp sold 6000 shares for 96$ something. That can drive
    the price down.

    
    
    The reason that we are suffering US sales problems is because
    over the last few years, much of our incredible %age increase in sales
    was indirectly to the government through companies like raytheon,
    GE, and Boeing.  Now that there are cutbacks in defense spending,
    there are less vaxes being bought.  

    The sale of 6,000 shares in a stock that has 120 million shares has no
    impact.
    
    I find the discussion of Digital's stock price to be distasteful, trite,
    and irrelevant to the reasons that motivate my employment here.
    
    The stock price will flucuate and speculation as to why the price
    flucuates ranges from the incredibly stupid to the incredibly illegal.

    Thank you, Mr. Sweeney.  What I find incredible in this discussion is
    the assumption that a bunchh of Wall St. MBAs know more about how this
    company should be run than does our management.  First off, who really
    thinks that their goals are in any way complementary to ours?
    
    -dave
    

    
    One reason for the stock dropping before and even now, is because
    before the crash, major stock houses were buying DEC stock in quantity,
    and after the crash, DEC stock was no longer "in", and the result
    was that DEC stock has not fully recovered since.
    
    Like it or not, a bunch of Wall Street MBA's may not know what is best
    for the company, but they do effect the stock price.
    
    /prc

    
    There are many "stock" "strategies, some actually related to the
    worth and quality to the company.  Unfortunately, there are also
    some strategies which are only related to determining whether the
    stock will rise and fall, just like a game.    And like a game,
    rumor, reputation, company and buyer perception are valuable factors.
    So, unfortunately, some of the reasons Digital stocks gets bumped
    around don't have much ground in reality.
    
    On a different track, one stock "strategy" is to follow the obituraries
    to look for recent deceased owners of companies, assuming that the
    stock of these companies will be sold as estate settlement and 
    therefore the company will be a likely target for takeover and a
    jump in stock prices.   It certainly shows why no one lost any sleep
    when many stock brokers lost their jobs.
    
    						Bob Cohen
    
     

RE:  < Note 818.127 by OZZAIB::KPHILLIPS >


	Good note, Kevin.  Thanks.  I share many of your concerns.
	
	I guess  i'm  just  worried  panic might have set in.  What would
	happen if a  "corrective"  action  backfired  and  caused for its
	ultimate effect a decline and not a rise in revenue?  
	

    I got a message from my management which said, in part,
 that the freeze shows that "no one in top management is
 sleeping at the switch". If that's the case, then how did
 Digital wind up in this mess? It seems that no changes are
 made unless the company is in serious trouble. The fact that
 many of systems are not selling could have predicted. Common
 sense should have been enough to predict this.

    It seems that major problems go unreported as such because
 it would be politically unwise to do so. Not until problems
 can no longer be hidden, are they brought out into the 
 daylight. Then they are blamed on the "market".

    Now the employee's have to pay the consequences for 
 decisions that they didn't make or agree with. Is that fair?

    Many of the replies in this file have stated that its
 okay that we take a freeze or that it could be worse
 elsewhere. Is that the point? 
   
    Of course it could be worse elsewhere, but why can't it
 be better here? Why must there always be a major crisis 
 before problems are solved? 

    Yes it could be worse, but it could also be better. Many
 Japanese firms do not seem to pratice this reactive style of 
 management. If they can do better, why can't we?

Pat
                 

    I don't know if this is my idea or someone elses, so bear with me:
    
    Digital culturally can't accept changes without a klaxon going off that
    says "RED ALERT... RED ALERT" and then things that would not otherwise
    be done get done.  A salary freeze does the job nicely.
    
    Unfortunately, many of these things are negative: "Don't raise
    salaries" "Cancel those projects" and "Don't travel" but something
    constructive comes out of it.  It's sort of "corporate Darwinism".

 >   Unfortunately, many of these things are negative: "Don't raise
 >   salaries" "Cancel those projects" and "Don't travel" but something
 >   constructive comes out of it.  It's sort of "corporate Darwinism".

    Pat,
    
    With all due respect, how does removing incentives promote survival of
    the fit?  How does this produce better products, more sales, and
    increased motivation?   If anything, it produces the opposite effect.
    
    Your comment about Dec stock seemed to miss the point that it appears
    that a major reason for the salary freeze was related to the stock
    market.  So, employees look at the stock, and see the value decrease
    after the announcement.  It seems to be a natural reaction.
                                                                  

    Re: .141 
    
    There is an old joke on how to make a camel move. The camel driver
    first applies two bricks to a sensitive part of the camel's anatomy. An
    onlooker asks the camel driver, "How does that help get the camel
    going?" The answer is, "First you have to get it's attention." 
    
    It does seem like the salary freeze got EVERYBODY'S attention.

    I was not handing down a judgement on whether the changes triggered by
    the current crisis were good or bad.  No customer is going to
    sympathize with Digital (and against IBM) if Digital's experts in a
    strategic industry or technology can't travel to the customer and IBM's
    can.
    
    When it comes to selling what the customers want and need, and how
    other vendors compete ought to determine how Digital should spend
    money.  A someone similar case can be made for supporting the customer
    after sale is made.
    
    "corporate Darwinism" is just a metaphor for my speculation that the
    result will not be formed in accord a master plan but like the law of
    the jungle literally thousands of small interactions.
    
    My comment on the stock market can stand by itself.  If there's a
    missed point here, it's the simplistic connections that people make
    between Digital's profits which are tallied and reported once every
    three months, and the stock price.

>    It does seem like the salary freeze got EVERYBODY'S attention.

You think so?  Maybe _almost_ everybody's attention.

However, I have a sneaking suspicion (rumour only at this point) that DEC is
going to announce to its German employees next Monday that DEC will follow
other companies in Germany and institute a 37.5 hour work week.

/john

>>    It does seem like the salary freeze got EVERYBODY'S attention.
>
> You think so?  Maybe _almost_ everybody's attention.
>
> However, I have a sneaking suspicion (rumour only at this point) that DEC is
> going to announce to its German employees next Monday that DEC will follow
> other companies in Germany and institute a 37.5 hour work week.
    
    So what? DEC has to conform to local trends in every single country it
    has opened an office or a subsidiary; this includes benefits (I do get
    benefits working for DEC Valbonne that you have never heard of, and you
    do get benefits in the US that I have never heard of; those benefits
    are usually tied to the performance of the local subsidiary and have
    strictly NOTHING to do with the performance of Digital Worldwide),
    hollydays and vacations, and the legal working week length. And
    besides, you do know of course that a 37.5 hour work week has
    absolutely nothing with the amount of work done or the actual time
    spent in the office, don't you? DEC is required to obey local work
    regulation laws, period; and DEC is sometimes required to follow local
    trends, sometimes just to make sure its employees do not flee the
    company to join a highly attractive company hiring like crazy, and
    sometimes for other reasons that get reviewed in Geneva EHQ, or by the
    Executive Commitee.

    Denis.

    DEC UK already has a 37.5 hour week officially. That doesn't mean any
    of us actually work 37.5 hours and then stop, does it.
    
    Actually I find US vacations barbaric in their brevity. A good vacation
    period can influence productivity infinitely more than keeping the
    employees nose at the grindstone for 49 weeks of the year.
    
    Andy

re .146:

Too true, Andy! The legal length of the working week really doesn't matter
much to most of us - unless eligible for and claiming overtime. You're hired
to get a given job done, and you do what needs to get done to deliver. Then
you come in Sunday to Note :-)

As to vacations, I agree here too. On a few occasions I've let myself get ground
down to the extent of not taking a proper vacation for a year or more, and when
kind friends (once my boss) forced me to go away for a few weeks and forget
(yes, completely FORGET!) about my work, I came back enormously refreshed.
More important, I came back with a much clearer perspective of what we were
trying to accomplish. It seems that if you keep your nose to the grindstone,
after a while you can't see the wood for the trees! 8-[

--Tom

Yes, but in Germany they have a thing called the "Betriebsrat" which throws
people out of the buildings at night and on weekends.

re .148
>Yes, but in Germany they have a thing called the "Betriebsrat" which throws
>people out of the buildings at night and on weekends.
    
    The "thing" is the "worker's council" where members are elected by
    the personnel. This is law and common practice in Germany. 
    There sure are occasional conflicts with management and also 
    individual employees who don't appreciate beeing told by the 
    "Betriebsrat" what's "good or bad" for them.
    
    However with regards to the performance of the German industry and
    the standard of living of the German "workers" in general and
    DIGITAL in particular, I don't believe that the various "Betriebsrats"
    have created a lot of unhappiness!
    
    This is just a remark from an outsider, I'd prefer to see such
    discussion taking place (probably not under this topic) with
    participation from insiders. (I believe that John, the author of .148
    is or used to be one of them).
    Shutting up,
    Fred

    Thousands of us peons saw the market trends (demand for WSs, PCs,
    WYSIWG, slow down of minicomputer market, etc.) and Digital's failure
    to adjust. Management turned a deaf ear to us until they were forced to
    address the trends. So, profitability is down. Management postponed our
    salary increases for their own incompetence. On top of that the have
    the audacity to claim they're being kind to us by not laying us off.
    Gee. I really appreciate that! 
    
    If you think this "RED ALERT" of a delay in salary increases is going
    to shake up the company into being more efficient think again. Digital
    needs to reorganize to become more profitable -- so we may get salary
    increases. But who has input to this reorganization? Who is even being
    told of ideas they're they're considering? They're keeping employees in
    the dark -- all we get is rumors that destroy morale and productivity.
    And they don't want us peons' input, because it might make sense enough
    that KO might overide the VPs who are have other agendas in their minds
    -- like keeping their turf. 
    
    From what I've seen and heard of new product plans that were presented
    to the Streker task forces for review, there were no major changes
    presented that seemed to indicate some new thinking about the market
    trends, i.e., business as usual.
    
    The plans I hear seem to indicate a position that only fine tuning
    needs to be done: move along with current product plans (triming to
    stay within R&D budget), trim a couple of groups like COG, SPG, and
    parts of CSSE which appeared to be overhead, and cosmetic
    reorganizations like US sales being reorganized along industry lines
    that overlap geographic lines, sales support being assigned to PBUs in
    the field, and to have us peons watch inflation outpace our wages until
    the market improves. 
    
    -George

    Re .134:
    
    > The sale of 6,000 shares in a stock that has 120 million shares has no
    > impact.
    
    Announcement of Digital's quarterly results is a sale of zero shares in
    a stock with 120 million shares, but it has an impact on stock price.
    In the same way, sale of a vice-president's shares can have an impact,
    not because of how many shares are sold but because of the implications
    of the act.                       
    
    
    				-- edp 

    
   < Note 818.150 by CURIE::VANTREECK >
    
>    cosmetic reorganizations like US sales being reorganized along
>    industry lines that overlap geographic lines, sales support being 
>    assigned to PBUs in the field, 
    
    Do you work in the Field?  The reason I ask is that this sort of
    reorganization can hardly be termed "cosmetic", at least in my opinion.
    Ever work on a cross-functional, cross-geographic opportunity? 
    
    Al

>< Note 818.152 by HOCUS::KOZAKIEWICZ "Shoes for industry" >
>
>>    < Note 818.150 by CURIE::VANTREECK >
>    
>>    cosmetic reorganizations like US sales being reorganized along
>>    industry lines that overlap geographic lines, sales support being 
>>    assigned to PBUs in the field, 
>    
>    Do you work in the Field?  The reason I ask is that this sort of
>    reorganization can hardly be termed "cosmetic", at least in my opinion.
>    Ever work on a cross-functional, cross-geographic opportunity? 
    
    Al, the results of quacks doing cosmetic surgery can be gruesome.
    The reason I chose the adjective "cosmetic" is because the basic
    entity is still the same, much like a person is still the same person
    after re-arranging the face a little. Sales is still sales, an entity
    unto itself.
    
    Rumors are there's a lot of re-org stuff to be announced very soon,
    e.g., moving back to product line orientation in order to gain better
    profit/loss control. But it's cosmetic because marketing and sales/sales
    support are not owned by the product lines. As a consequence, there is
    still a lot matrix management and the product lines will still lack of
    control of the resources they need to succeed. If they don't have
    control of their own destiny why should they be held responsible, i.e.,
    why hold them responsible for profit/loss? 
    
    And where's the software? Why software is only here to leverage
    hardware... 
    
    The more things change, the more they're still the same. Management
    will flail around reorganizing at huge expense to profitability, which
    will probably help to push reviews and salaries far beyond the next
    three months.
    
    -George

    Back to the topic of "Salary Planning", I heard that Digital has
    historically tried to stay "competitive" (in salaries and benefits)
    with other companies with which it competes for talent.
    
    To the extent that that is true, industry trends may be relevent.
    
    According to the 29-May-89 issue of Information Week, average
    compensation for senior MIS executives increased over 11.7% last
    year and '"hefty increases" were the rule'.
    
    'Mindful of the competitive value of their computer systems, companies
    are taking aggressive steps to make across-the-board improvements
    in their data processing operations' and demonstrated a 'willingness
    to reward those who can effectively manage these large operations'.
    
    Facts: food for thought...
    

Re: .154
    
>    'Mindful of the competitive value of their computer systems, companies
>    are taking aggressive steps to make across-the-board improvements
>    in their data processing operations' and demonstrated a 'willingness
>    to reward those who can effectively manage these large operations'.
    
Doesn't that just sound like an excuse for giving themselves nice, fat raises?
What about the guys who *program* these valuable computer systems?

				-- Bob

    re: .153 .154
    
    In every Personnel presentation I've seen (this is for Field SWS)
    when they talk about "competitive", they are comparing salaries
    at DIGITAL with salaries at other computer vendors, like IBM and
    HP.  In my own experience, Field SWS has rarely lost people to 
    other vendors; the main drain has been to customers (MIS shops)
    and to startups and consulting firms.  Also, "competitive" seems
    to mean that the *range* is competitive, not average salaries or
    yearly percentage increases.
    
    Many times I've seen notes by people who measure their salary
    increases by percentages, and have some gripe about *their*
    percentage vs. someone else's.  But a five percent increase for
    a consultant making 70K a year is a lot more than a seven percent
    increase for a specialist making 35K a year.  It's the real dollar
    amount that's important, not the percentage.
    
    It's been said before, but the salary planning system has a couple
    of big disadvantages to it:  There is no flexibility in the system
    to *significantly* reward a top performer (except for a few certain
    managers by way of the RSOP), and a group composed entirely of top
    performers is well and truly hosed, since their overall "allotment"
    in the spend plan will be the same as an average-performing group.
    Because of these problems, the "pay for performance" incentive is
    very minimal, and the very phrase is now used more in irony than
    in earnest.

    Geoff

Re: .156

There was a recent story in Newsweek (I think) about salary planning.
Apparently the trend is away from "pay for performance" and towards more
equal (percentage) raises for the members of the group.  One example that
was given of the "old way" was a manager whose group consisted of five star
performers.  In order to match the corporate-mandated bell curve, the
manager rotated through his five people and each report period one of
them would have to be the "designated dummy", with a below average
performance rating.

I'm not too impressed by the "new way" either, since it seems to encourage
mediocrity.  Even if you say that group X as a whole performed well one
year so they should all get good raises while group Y did badly so they should
all get poor raises, that will encourage the best people in group Y to
transfer into group X (actually everyone will want to transfer, but group
X can afford to be picky).  The result is that group Y will do worse than
ever the next year, so whatever job group Y was supposed to be doing simply
won't get done.  If anything, there should be an incentive for good people
from group X to transfer into group Y, to balance things out.

I can't really think of how salary planning should ideally work, though.  An
idea I've been playing with is: each employee is rated on a 0-100 scale,
with the idea that an employee rated 60 is twice as productive as an
employee rated 30.  The total number of dollars in the corporation available
for raises is divided by the total of the ratings for all employees.  Each
employee receives that amount times his/her rating.  The biggest problem
with this, I think, is that it would be next to impossible to come up with
a fair rating for each employee, given (a) hundreds of individual managers
would be assigning the ratings, and they'd probably inflate the ratings in
order to make more money come into their group, and (b) if Ken Olsen were
rated on this system he'd have to be 100 and the rest of us some fraction
less than 1.

To avoid objection (b) the raises could be based on percentages instead of
absolute amounts: each employee is rated from 0-100 based on how productive
they are relative to their current salary (come to think of it, some of
these ratings could be negative).  Each employees's Weight is defined as
their rating times their current salary, and an employee's percentage
raise is Rating * 100 * Total_Money_For_Raises / Total_Of_All_Weights.

Instead of a rating from 0 to 100, your rating could simply be the
percentage raise your manager thinks you deserve, and the result would be
pretty much the same.

Still, objection (a) is pretty serious, so instead here's another idea:
apportion raises among groups according the over-all performance of that
group.  Within each major group the raise money is likewise aopportioned
among sub-groups on the basis of sub-group performance.  At the lowest level,
in theory, a star performer in a poorly performing group could get a really
good raise at the expense of everyone else -- as long as it was acceptable
for people's salaries to go down as a result of their review.  This seems
to go against U.S. culture, though (which is a built-in factor causing
inflation).

This system also has problems: at each level the group manager would skim
off a nice big raise for him/herself and then divide the rest of the raise
money among the sub-groups; there may not be a lot left for the rank and
file.  It would also be hard to find objective ways to rate sub-groups;
how do you compare an architecture group against a support group, or a
development group against a sales group?  The result could be that the
apportioning of raise money would be come a matter of pure politics.

Oh well, I guess I'll stick to engineering...

				-- Bob

    Couldn't agree more with the earlier statement about our "barbaric"
    approach to vacations.  I just returned two days ago from a vacation
    in Germany.  While there a spent a few hours with a cousin who is
    an engineer with an instrument maker.  They start with six weeks
    vacation, and he also mentioned that working late or on weekends
    was not allowed.  Also, it is simply unheard of for people not to
    take their vacations.
    
    In addition, they also get a 13th month's pay in December, not to
    mention significantly more paid holidays.  It'll be nice when we
    can creep out of the 19th Century approach to working.

    Re .159
    
    I object to anonymous notes. If you don't have the courage to stand
    behind what you are saying then it isn't worth saying.
    
    Dave

    Re .153
    
    George, I don't know which Marketing group you're with, but there
    are those of us who work in Marketing organizations which ARE owned
    by a Product Line (PBU).
    
    							Steve Oviatt
    							NaC Marketing

    re: .158
    
    Germany isn't America and vice versa.  Personal opinion:  I'm not
    sure that many Americans would be willing to sacrifice their freedom
    of choice in exchange for the comforts of German socialization.
    
    As long as there are people in the world (e.g. the Japanese)
    who are willing to work 11.5 months for 12 months pay, that will
    put those who are only working 10 months for 13 months pay at
    a significant competetive disadvantage.
    
    Al
    

    < Note 818.153 by CURIE::VANTREECK >

>    The reason I chose the adjective "cosmetic" is because the basic
>    entity is still the same, much like a person is still the same person
>    after re-arranging the face a little. Sales is still sales, an entity
>    unto itself.
    
    The same holds true for every discipline in the corporation.  But
    without management (and organization is a facet of management) virtually
    no productive work would get done by anybody.  Good management should
    able to articulate goals, formulate plans to reach them, and coordinate
    the activities of all those who do the work so that they follow
    the plans.
    
    Sales the activity is the same (or somewhat so) everywhere you go,
    but Sales the organization could assume many different forms;  only
    a select few of those forms will result in an optimum performance
    given our current products, markets and strategies.
    
    If I understand some the major thrusts of the corporation over the next
    decade (greater service offerings, positioning ourselves as a prime
    integrator), we will be at a considerable disadvantage if we leave
    our Field organizations as they currently stand.  It is virtually
    impossible to beat out the competition on large integration
    opportunities when a) our customer is spread out geographically,
    and b) we are unable to present a single, coherent message to the
    customer and are unable to rally all the necessary resources because
    of parochial interests.  Iterests which exist solely because of
    our geographic organization and metrics. The only way to get around 
    this is to realign the Field around our customer base,  at least to 
    some extent.
    
    Al

    

Many notes seem to say that Europe has a really nice working envirement.

I could not help but think about the news last night.  The transportation
workers in one of the countrys in Europe (forgot which one) where said to
have executed one of their weekly wildcat strikes, immobolizing the said city.

I would hope they have a good reason to do so, but if they are not happy with
what they get, then I would not get too excited about having an additional week
of vacation or two.

Grass always looks greener on the other side.  If I wanted to take vacations
as a wayof life, I would be in Europe (somewhere) today.  If I wanted to work,
I would be in the US.

	- mark

    
    It must have been London, UK, Europe, Earth, our corner of Galaxy.
    

	Let's try and keep away from the culture comparisions except where
	they directly affect Digital and the way Digital does things. 
	General country A is better/worse than country B things belong
	somewhere else.

		Alfred - co-moderator HUMAN::DIGITAL

    re: the replies that see the freeze as a way of encouraging 
    attrition ... 

    I heard second-hand that some groups in Hudson LSI are offering
    people two years' pay to quit.  This seems like a very generous offer
    - almost too good to be true, in fact - and says something about the
    long-term manpower projections that some groups have made.  Can
    anyone confirm this story and give some details about it? 

    - Cliff

>some groups in Hudson offering two years pay to quit?

I work in Hudson and haven't heard this rumour.  Sounds pretty unlikely, since
we don't seem to have any excess manpower here.

    Re: Pay Plan
    
    That rumor has spread throughout much of U.S. Manufacturing.  The
    version here goes, "1 years salary + 1 month for every year of service
    at DEC, with a maximum of 2 years".
    
    I've been hearing this one for quite some time.  This facility has
    been through a "pay plan" before, the last time manufacturing had 3,000
    excess people.
    
    Mike

    I received a forwarded memo from my manager this morning announcing a
    worldwide stock option freeze.  It originated from Jack Shields, and
    contained an opening line instructing it to be delivered to all
    "appropriate managers worldwide."  Because it wasn't directed to "all
    employees" I wasn't sure it would be proper to post it in here.
    
    The jist of the memo is that there is a worldwide freeze on restricted
    stock options until announced otherwise ... very similar to the salary
    freeze except this one is worldwide. 
    
    If one of the moderators will give me a ruling, I'll be happy to
    post the text of the memo.
    
    							Pat 

    Unless my manager is lieing to me (which I severely doubt) I will
    second this. That is what he told me.
    
    Dave

    I've also received the Stock Option Freeze memo.  As previously
    mentioned, it won't affect all employees.  Not everyone is entitled
    to Stock Options.
    
    Mike    

    I recieved a forwarded memo form Peter Mercury of SPG (which is being
    dissolved). It indicated that KO has a vision of how the company should
    be re-organised and stated how the that vision would affect the
    dissolution of SPG by moving functions to the new product lines, PBUs,
    etc.. Maybe KO has got fed up with the bickering and politiking and
    decided to get things moving.
    
    I heard KO said in a speech that sales support would move to PBUs. But
    I hear conflicting stories on whether that means sales field or product
    line PBUs. If it really is moving to product lines, there will be
    shouts of joy by many frustrated people in the field and in marketing.
    
    However, it seems that the "5 by 4" re-org of the sales (industry and
    geographical areas) is still planned.  :-(
    
    Current vision seems to be 4 hardware product lines: High Performance
    Systems, Mid Range Systems, Entry Level Systems, Networking. It's
    pretty quiet about what will happen with software. Read that as
    probably still undecided...
    
    On a funny note, I hear Jack Shields (senior VP of U.S. sales, sales
    support, field service, etc.) is going to give a talk in Nashua NH
    (Spit Brook Rd) on Wednsday about the re-orgs. Rumor has it he's going
    to say that Digital is going to become a software company. Hasn't
    anyone told him that it's an old joke given several years ago by KO to
    the press? Or is it really, really, really, really real this time? 
    
    -George

    RE .174 --

>    On a funny note, I hear Jack Shields (senior VP of U.S. sales, sales
>    support, field service, etc.) is going to give a talk in Nashua NH
>    (Spit Brook Rd) on Wednsday about the re-orgs. Rumor has it he's going
>    to say that Digital is going to become a software company. Hasn't
>    anyone told him that it's an old joke given several years ago by KO to
>    the press? Or is it really, really, really, really real this time? 

    That's Jack *Smith* who's coming to ZK tomorrow, and he's doing the
    "Communication Session" he's been presenting at various facilities over
    the past couple months.  Tomorrow's presentation is for the Software
    Development Technologies (SDT) and Corporate User Publications (CUP)
    groups ONLY; he was already here once before to speak to the rest of ZK
    (I assume the reason for two visits is because there's not enough space to
    accommodate everyone at ZK all at once).

    The agenda is for this "Communication Session" is as follows:

     Introduction:			Bill Keating

     Company overview			Jack Smith
     key messages and			Senior Vice President of MEM
     challenges for Engineering

     Financial overview,		George Chamberlain
     implications for engineering	Vice President of MEM Finance
     investments

     Engineering strategy and		Bill Strecker
     issues				Vice President, Product Strategy

     Questions and answers		All


    Jack Shields ain't involved.

							-- Nina

Re: .-2 (George)

>    Rumor has it he's going
>    to say that Digital is going to become a software company. Hasn't
>    anyone told him that it's an old joke given several years ago by KO to
>    the press? Or is it really, really, really, really real this time? 
    
Market projections here suggest that sales of software will overtake those
of hardware by 1993 across the industry as a whole. The only thing left to
know is if the royalty of the company think we should be at the party.

Like the man says, it's no good hugging trees, because the wind will blow
a lot of them down. Let's party!
							- Ian W.

    re: .175
    
    Yep. You're right. It's Jack Smith, not Jack Shields, that will give the
    pitch.
    
    re: .176
    
    Do you really think Digital will market it's software on any MIPS
    or SPARC or 386 platform? Do you really think operations will discount
    a system of hardware and software equally? Digital a software company?
    Not for a long, long, time (after the old guard is gone maybe).
    
    -George

    
    I understand that .174 is correct about 4 PBUs. These will
    be supported by 3 "Component PBUs"
    					SCO (Semiconductors)
    					Storage Systems
    					Software
    
    

    re: .177
    	Digital already markets on a MIPS platform - the DECstations!

Re: .177 (George)

386, SPARC, etc... well, WPS-PLUS/DOS represents over 3% of my revenue, and
DECnet-DOS + PCSA grow this number to around 5%. Thats around three times
larger than PDP11 software sales, and a lot better than all but the top
twenty or so VMS layered products.

I'd love the opportunity to resell applications on other platforms. The way
things are going, we eat or get eaten.
								- Ian W.

RE: < Note 818.174 by CURIE::VANTREECK >
>    However, it seems that the "5 by 4" re-org of the sales (industry and
>    geographical areas) is still planned.  :-(
That's not what I've heard.  DEC will sell by industries.  In three separate
announcements, the powers that be will describe how the 11 industries will
work.

The 11 are:
	GOV'T - Weiss	- Agencies
			- Primes

	VOLUME - Atlas	- Distributors
			- Resellers

	OTHER - Hughes	- General Services (Finance, Insurance, etc.)
			- Media
			- Public
			- Telecom
			- Process
			- Discrete
			- Electronics


For each industry they will be organized as:

	Sales VP -
		- Sales Support
		- Marketing
		- EIS - Projects
		- Customer Services (FS, SWS, Ed Svs)


Also, there will be a HQ with the same organization format.

No relocation for a majority, 96%?, of the individuals will be required.

That's all for now,
Dan

    re .174:
    
    Jack Smith didn't make any organizational announcements at ZK this
    morning, but he did say that an Engineering reorg is eminent (sic).
    
    Jack also commented on the salary plan delay.  He said that the
    Executive Committee has control of only two expense pots: the salary
    plan and the stock plan.  He said the EC went to the layer of
    operational managers the level below them and asked for plans to cut
    expenses.  None were forthcoming with the message coming back, "We
    can't."  At that, the EC put into action the salary plan delay.  Smith
    said that the feedback he's been receiving from managers down the line
    was that they had never been told of the challenge to cut costs, and
    that they have alternative ideas.  Smith said that the very next day
    after such a plan is approved, the salary plan delay will be lifted
    (paraphrasing).
    
    Smith also confirmed that the EC is looking at four other "incentive"
    programs, but that there is concern that such programs, once
    instituted, become institutionalized, that they cannot reasonably be a
    "one shot" offering.  He said that, again, the EC will look to the
    operational managers to say what they need to get costs down,
    productivity up.
    
    Marge

    
>  Engineering reorg...

    	I wonder what this will consist of.
    
    	/prc

    re: .181
> < Note 818.181 by FDCV06::ARVIDSON "Truth is simple, but seldom seen" >
>                             -< 11 Industries... >-
>
>RE: < Note 818.174 by CURIE::VANTREECK >
>>    However, it seems that the "5 by 4" re-org of the sales (industry and
>>    geographical areas) is still planned.  :-(
>That's not what I've heard.  DEC will sell by industries.  In three separate
>announcements, the powers that be will describe how the 11 industries will
>work.
    
    I saw the Dave Grainger memo also. The earlier plan was also selling
    along industry lines - they just wanted to focus on a few key
    industries first. It looks like some last minute changes to 11
    industries. Note aerospace and automotive are missing from the list you
    gave. Perhaps by July 1, the plan will be revised is to selling by 12
    or more industries? Or will aerospace, automotive, etc., go under
    discrete?
    
    It's heartening to see that things are still changing. Perhaps, there's
    still a chance that sales support can be moved out of sales to product
    lines and support components -- and maybe even raise support components
    to product lines?
    
    Primes are a type of system integrator. Harvy Weiss thinks system
    integrators are a bane on Digital. Putting him in charge of primes is
    like asking the cat to babysit the parakeet. 
    
    -George

    Along with screwing up your salary planning, are you aware your
    retirement planning may also be screwed up? Yes, your Digital pension
    fund lost $747K on investments last year. 
    
    Maybe this should be posted under the "Waste Watch" topic: Eliminate
    some money managers and just put the funds a bank?
    
    -George

From .182:

>>    Jack also commented on the salary plan delay.  He said that the
>>    Executive Committee has control of only two expense pots: the salary
>>    plan and the stock plan.  He said the EC went to the layer of
>>    operational managers the level below them and asked for plans to cut
>>    expenses.  None were forthcoming with the message coming back, "We
>>    can't."  At that, the EC put into action the salary plan delay. 
    
What??? Doesn't the Executive Committee run the company? Can somebody explain
who has control of the budget? Can't KO dole out the money as he sees fit?
Can't the operational managers be given a budget and told to live with it? What
is going on here?

Vicki Meagher

    	PLEASE, do not post unsubstantiated rumors here in this
    conference.  If you have official word on something, fine, but if
    it's something you cannot prove, then it really doesn't belong
    here.  This is especially true if it sheds a negative light on
    another Digital Employee.

    Thank you.

    Amy  (co-moderator)

    RE: .187
    
    I, for one, would be interested in knowing the source of your
    information regarding the Digital pension plan and it's loss
    on investments ($747K) last year.
    
    Thanks,
    Lynn
    

    News of the loss appeared in a government-required disclosure
    newsletter that was mailed to all US employees (that's employees of
    Digital who reside in the United States, not "Dave Grainger's
    Organization")

RE: .192

I recieved a copy of "Your Summary Annual Reports" which is merely a single
page folded-in-half, purple-colored. Part number is EF-B0188-50.

Under the section "Pension Plan", subsection "Basic Financial Statement"
the last sentence reads as follows:

        "The plan had a total income of $116,865,818, including employer
         contributions of $117,544,934, and a loss on investments of
         $747,270 and interest income of $68,154."

I believe this has been discussed at length in the BMT::INVESTING notesfile
but it's not accessable it the moment so I cannot post an exact pointer.

Lee

They must have bought DEC stock... :)


Paul

    SUBWAY::INVESTING note 1432 discusses the loss in the pension fund.
    (SUBWAY is the cluster alias)

From the Citizen - Ottawa Canada.. sent to me by my mom, so I'm not sure of 
the date it was written, but it was within the last week or so.

Digital Equipment of Canada, LTD. has introduced a three month delay on 
salary increases affecting its 3,500 employees, including 1,500 in the 
Ottawa area.

The move, also taken in the U.S. by its American parent Digital Equipment 
Corp., is in response to failing profits.

Under the delay, employee's still undergo an annual salary review but their 
increase will not take effect for three months.

Digital's employee's are not unionized

There are no plans for layoffs.  AS a matter of practice, not policy, 
Digital has never laid off an employee.

In its last quarter ending April 1, Digital's worldwide profit was sown 
16 percent to $305.12 million form $363 million.  Although sales increased 
to $3.7 billion from #3.4 billion, U.S. sales dropped substantially.

Canadian sales were also off, although annual results aren't due out until 
the end of August.

Fierce competition leading to price cuts on many of its products were also 
behind the freeze.

A freeze was last implemented in the early 80s when the company suffered a 
slump in sales.

Faced with a slowing demand in the U.S. for its products, the 
Massachusetts-based multinational has also begun moving up to 4,000 
employees out of manufacturing and into sales and service positions.  The 
shift is scheduled to be completed within the year.

Another 2.00 manufacturing positions are slated for reassignment in fiscal 
1991.

Digital Canada spokesman Dave Paolini said the restructuring won't include 
the computer manufacturer's operations in the Ottawa area or the rest of 
Canada.

Digital has a plant on Herberg road in Kanata, a building in Bells 
Corners and offices at Baseline and Woodroffe.

Digital is scheduled to finish building a $16-million service center in 
Hull, which will employ 300 people.

The company will also begin construction on phase five of its Herzberg 
complex.  The size and cost of the new phase has yet to be determined.

(By Doug Kelly - Citizen staff writer)

                   I N T E R O F F I C E   M E M O R A N D U M

                                        Date:      31-Jul-1989 03:41pm BST
                                        From:      ALASTAIR WRIGHT @RES 
                                                   WRIGHTA AT A1_CHEFS at CALCOT at REO 
                                        Dept:      BOM
                                        Tel No:    (7)830-3012

TO: See Below

Subject: "CONNECT"

    Please find attached, for your information, the salary delay article 
    which will appear in "Connect" from Geoff Shingles. [Managing Director,
    DIGITAL UK - Andy]
    
    Regards,
    Alastair
    
    
    Over the last month, there has been uncertainty about how the UK might 
    be affected by the decision to delay salary reviews in the US. The 
    process initiated by the Corporation for the rest of the world was for 
    a country-by-country review to be undertaken. By the way, this is much 
    more enlightened than it would have been a few years ago when we would 
    have simply instigated a worldwide delay!
    
    I am delighted to tell you that there will be no general salary delay 
    for UK employees. Our results are such that we do not believe, and 
    neither does the Corporation, that a delay is justified, given the 
    tremendous effort and commitment demonstrated by employees here.
    
    There will, however, be a delay for senior managers across Europe. This  
    is on the basis that they can impact Corporate results and these have 
    not met expectations. In the UK, this is approximately 80 people. Their 
    reviews will be delayed for three months. Further details will be 
    communicated to these individuals as to exactly what it means to them.
    
    You may ask "Is this me?" The answer, by the time you read this is, if 
    you have been told, yes it is. If you haven't been told, no it isn't.
    
    While we are talking about salaries, I would also like to take the 
    opportunity to explain our philosophy on pay, as our latest employee 
    survey shows a disturbing downward trend in people's perception as to 
    how well they are paid. There are three key statements:
    
    1. We are 100% committed to being competitive.
    
    2. We are committed to Pay for Performance. 
    
    3. Affordability must also be considered.
    
    Let me explain about affordability. For several years we considered 
    affordability at the beginning of the salary planning process and 
    issued what was called a "bottom line". This meant we worked out how 
    much we could afford to pay on salaries before individual salary 
    planning was done and managers had then to distribute this total amount 
    among the employees. This had the effect of restricting Pay for 
    Performance and artificially holding people low in the range.
    
    For last year and this year, we have not done this. Salary ranges have 
    been produced which are competitive and managers have been asked to 
    plan individual salaries purely on their individual performance - not 
    against affordability. This is a major shift in emphasis and enables 
    managers to ensure people are in the right position in range.
    
    It makes no sense at all to economise on people's pay! All that happens 
    is the best leave and we spend lots of money on recruitment and 
    induction just to get us back to where we started.
    
    Affordability is, however, clearly an issue. We cannot have what we 
    spend rising quicker than what we earn from sales. Our approach now is 
    to cut back everywhere else first - including areas like travel, 
    meetings, facilities, etc. If we still have problems, then we will 
    reduce hiring or even cut back on existing headcount. I would prefer to 
    have a fewer number of committed well-paid people rather than a large 
    number of under-paid people. Only if we still have problems with 
    expenses after doing all that would we consider cutting back on 
    individual salaries.
    
    So, the positive side is that your salary should be determined by your 
    own performance and position in range. Your manager is the one who 
    recommends what this should be and should share it with you.
    
    The impact of this is that you may have to "tighten your belt" as money 
    will have to be saved in other areas. We need your help to do this as 
    we really must get expenses under control. I know you would rather save 
    money like this than be paid less.
    
    There is now no reason why any manager should be quoting affordability 
    as a reason for holding down your position in range.
    
    We want above-average employees who are properly paid and who, in turn, 
    are committed to making this company as successful as it possibly can 
    be.
    
    End.    
    
    

>    Let me explain about affordability. For several years we considered 
>    affordability at the beginning of the salary planning process and 
>    issued what was called a "bottom line". This meant we worked out how 
>    much we could afford to pay on salaries before individual salary 
>    planning was done and managers had then to distribute this total amount 
>    among the employees. This had the effect of restricting Pay for 
>    Performance and artificially holding people low in the range.
>    
>    For last year and this year, we have not done this. Salary ranges have 
>    been produced which are competitive and managers have been asked to 
>    plan individual salaries purely on their individual performance - not 
>    against affordability. This is a major shift in emphasis and enables 
>    managers to ensure people are in the right position in range.
    
    Does anyone know if this applies to the U.S.? Will we see a return to
    pay-for-performace, and away from pay-within-a-few-tenths-of-a-percent-
    of-the-corporate-average-increase?
    

>>    There will, however, be a delay for senior managers across Europe. This  
>>    is on the basis that they can impact Corporate results and these have 
>>    not met expectations. In the UK, this is approximately 80 people. Their 
>>    reviews will be delayed for three months. Further details will be 
>>    communicated to these individuals as to exactly what it means to them.

This looks as poorly thought out as the rest of the freeze.  So senior managers
in Europe affect corporate results but no one else does.  In the U.S.,
everyone from senior management on down affects corporate results.

By golly Andy, I think you are right. From what I gather from the memo
committment to Pay for Performance must be less than 100% because it did
not get the 100% figure like the 'key statement' above it did!

.198>While we are talking about salaries, I would also like to take the 
.198>opportunity to explain our philosophy on pay, as our latest employee 
.198>survey shows a disturbing downward trend in people's perception as to 
.198>how well they are paid. There are three key statements:
.198>
.198>1. We are 100% committed to being competitive.
.198>
.198>2. We are committed to Pay for Performance. 
.198>
.198>3. Affordability must also be considered.
    

    After reading .198, I wonder if were will ever be a brotherhood,
    or attain international spirit with comments such as below for .198
    
    
>    I am delighted to tell you that there will be no general salary delay 
>    for UK employees. Our results are such that we do not believe, and 
>    neither does the Corporation, that a delay is justified, given the 
>    tremendous effort and commitment demonstrated by employees here.
 

    Does that imply that the people in the USA have not given any effort
    and commitment?
    
    
    #ed

Re:.203

No, I think it means that us in the US haven't given enough to overcome the
softness in the computer market here. If we had put forth enough committment
to ovecome this puny hurdle then we would not have had a freeze....

Lee

    re .203

>    After reading .198, I wonder if were will ever be a brotherhood,
>    or attain international spirit with comments such as below for .198
>    
>>    I am delighted to tell you that there will be no general salary delay 
>>    for UK employees. Our results are such that we do not believe, and 
>>    neither does the Corporation, that a delay is justified, given the 
>>    tremendous effort and commitment demonstrated by employees here.
>
>    Does that imply that the people in the USA have not given any effort
>    and commitment?
    
     I think what they/he was trying to say was "our financial performance was
     good enough that we won't freeze your salary, and, by the way, thank you
     for your continued effort and commitment."

     Then again, I've occasionally put the "benefit of a doubt" words into a
     manager's mouth when they did actually mean to say what they said. I 
     think it's Just another of those "make you feel good" comments that, once
     it reaches a wider audience, was well intentioned but misguided.

     So, was he _really_ implying the U.S. did not try enough? I certainly
     hope not. I wouldn't worry about it. Europe grew, the U.S. didn't.
     I'd hate to see all this inference lead to a U.S. vs Europe mentality.
     Although statements like the one above make you wonder who's steering the
     ship.

I don't believe there is meant to be any suggestion that the US did not try as
hard (or was in any way less deserving). Except for the results... Let's face
it, the business mindset regards results as the bottom line, and this attitude
is especially strong in the US - at least that's how it looks from here in
England.

The verbiage about effort and enthusiasm and that stuff can be disregarded.
Effort is great but with substandard products you're dead. Many of the products
come from the states, so a good slice of the credit for their success belongs
in the states. This sort of verbal pat on the back is something sales people
expect, whether it's true or not. It's usually part true.

Without wanting to exacerbate feeling, it does seem to me that the oceans
of the world do give the corporation more trouble than they ought to. The
Americans are now feeling the downside of this, and no doubt there is some
unfairness in that. But for many years we in Europe - and probably GIA even
more - have felt second class citizens in many ways.

Nominally we work for a multinational corporation. But it's often hard to
believe. Although local sales and support people are almost all citizens of
the local country, most of the products they sell come from Engineering in
the States - or if not IN the States, run from there. The export licensing
regime under which we labour (and which Americans probably are barely aware
of) is imposed by the US Department of Commerce. Did you realise that if we
ship a terminal from one DEC office to another in the UK we are technically
"re-exporting" potentially "high-tech American know-how"? And this is true
even if the terminal was designed and built in France...

Most corporate product managers sit in the US. So do almost all the policy and
strategy makers. Announcements here run weeks to months later than in the US.
Prices here tend to be higher. Information filters slowly across.
Programs and tools set up for free access in the US are not available in Europe.
And so on. I would hazard a guess that average salaries in the States are enough 
higher that, even with a freeze, you are probably still substantially ahead.

None of this should be read as complaint or gloating. What I am trying to
express is that the corporation really has a long way to go before it works
like a single unit... and it really is important that it should do so.

--Tom

    FWIW,
         there is now in place a three month wage freeze imposed on
    all European Manufacturing Staff managers and above. I presume
    that the content of .198 refers only to the UK Sales Organisation.
    
    I believe this to be a sensible move at this time.
    
    re: .198
    
    It doesn't matter much whether you have the best products, the
    best workforce, the best strategy. If you walk into a recession,
    your NOR numbers will suffer. I understand and sympathise with
    the situation in the US, and it doesn't please me when digital
    is hurting, primarily because certain geographical markets are
    depressed. Naturally, I am pleased that Europe and GIA are
    doing well and especially proud of the performance of the Ayr
    plant in Scotland, however there should be no place for
    complacency ( "When the US sneezes, Europe catches the 'flu!")
    We, in Scotland, have recently experienced what happens to a
    company which puts all it's eggs in one basket, makes the wrong
    moves in terms of debt, and simply becomes uncompetitive. I
    refer to Wang's decision to close their (profit making) facility 
    at Stirling with the loss of 247 jobs.
    
    Lastly, all recessions pass and the performance of economies are
    cyclical. Digital must position itself Globally and cross-
    functionally to be able to respond to the upturn in demand in
    the US and elsewhere. If we can do this successfully, we, as
    a company, will be in better shape than ever before as we move
    into the next century.
    
    Don H.
    

    The decisions that got us into this mess in the USA, such as hiring
    lots of people to meet a demand that never materialized, due to
    improperly extrapolating one year's results, were done by senior
    managers, not by the people in the trenches.
    
    The decisions that delayed our involvement in the fast-growing Unix and
    PC business were made by senior managers too. (different ones)
    
    So the approach of freezing only managers salaries makes perfect
    sense to me.

    Especially if things go well, they were the ones that got big bonuses!!!

    re: .208/.209
    
    This type of view surprises me. After all hindsight is always 20-20
    and people by their nature make mistakes, including Ken Olsen.
    
    It should be remembered that it is not the US that is instigating
    a salary review deferral for Staff managers and above only, it is
    Europe. Therefore if you follow your own arguements to their logical
    conclusion, every DEC employee in the US and every European Staff
    manager in Europe is responsible for the current situation in the
    USA - complete nonsense of course. Take a look at all the other
    computer manufacturers who compete with a us directly. They are
    not in good shape.
    
    It should also be remembered that attributing blame based
    on circumstances outwith the control of this company is not help-
    ful. How many contributors to this notesfule foresaw the crash on 
    Wall Street and more importantly extrapolated exactly the impact
    on digital in Global sense?
    
    Finally, you can reap few benefits from parochial and negative
    attitudes when times are more difficult than before. Apportioning
    blame needlessly wastes time and time is what we must use to the
    best of our abilities to position ourselves for the future.
    
    Don H.
    

    MIS Week 8/14/89
    
    "NEW YORK--The need for instantaneous data transmission and
    comprehensive database management drove data processing salaries up
    11.7 percent this year over last year, marking a sharp demand for
    telecommunications network specialists and database managers.
    
    "Telecommunications job holders as a group, including network
    operations technicians, saw significantly higher salary increases
    than those for the entire data processing population, according to
    an annual survey conducted by Edward Perlin Associates, a compensation
    management firm here.
    
    "Salaries in telecommunications climbed an average of 11.8 percent,
    with telecommunications network managers earning $74,500 in 1989
    and trainees for that position earning $29,500.  Telecommunications
    network specialists received a 14.49 percent boost in compensation from
    1988 to 1989.
    
    "..."

    Any news on extending the wage freeze?

    It's the U.S.'s problem, not the whole company.

    I don't have any official news. But back in June we were told that we'd
    be doing salary planning in September. Well since nobody has told me to
    do salary planning I guess the delay will be longer than three months.
    
    Just a deduction based on the dog that didn't bark,
    
    Dave

>>    It's the U.S.'s problem, not the whole company.

Don't get too cocky.

-steve-

       RE:.213
       
       "It's the U.S.'s problem, not the whole company."
       
       Yup. We did the majority of the engineering, you did the majority
       of the sales.  Unless Europe starts taking over the MAJORITY of
       software and hardware engineering pretty damned quick, Europe is gonna 
       have alot less to sell. The States are starting to lose their talent. 
       (It's happening. Trust me) People in Engineering will only put up with 
       no raises for so long before it becomes a serious issue. Just my
       opinion.
       
       						mike

    Howsabout "it's the problem of the US AREA" as a problem statement?
                                       ^^^^^^^  
    Personally I think that corporate resources such as Engineering
    shouldn't have been affected. But since when did the EC take any notice
    of me? :-)

The problem is the US's?  Well so much for the 1 company theory!

- George

re a few back

A long time ago, I had a drill sergeant who often preached  that "US" (as in US
ARMY) was not just an abbreviation for United States.  It also meant "US" as in
the objective case of "we".

It is of little satisfaction  to the areas that are doing well, at least on the
surface, if/when the company is in  trouble.    Building  emotional  walls  and
pointing fingers will not solve problems;   they  will  only  make the problems
worse.  Today, the other geographies are showing  the  better revenue/expenses.
Next year, it may be different.  I am at a loss to understand how ANY geography
can do well without the USAREA corporate facilities.

WE (as in USAREA) have a problem that, if it is not fixed  in short order by US
(as in the whole company), will affect the other geographies.

mumblings and such

Dave

    Mmmm.
    
    Some excellent points here.
    
    1.  Move all design and development to Europe.
    
    2.  Relocate all manufacturing in Europe
                                     
    3.  Move corporate HQ to Europe  
                                     
    4.  Rename company  "Digital Plc"
                                     
    5.  Cut off the non-productive US based operation
                                     
    Sounds interesting!              
                                     
                                    
    BIG SMILIES, ONLY JOKING!!!!!!   
                                     
    I agree that the concept of separating the areas for purposes of
    applying things such as salary freezes is counter-productive. 
                                                                  
    As has already been pointed out, without the US based operations,
    the rest of us wouldn't have been able to produce as we did.  The
    company is too integrated (in some spheres) to permit the separation.
                                                                  
    We should be treated as one entity otherwise we will proliferate
    the insular mentality prevalent in some parts of the US based-groups
    which is so often the bane of us elsewhere in the world.
    
    Mike      
                                                                  
                                                                  

    My understanding is that the production side of Digital, manufacturing,
    R&D, etc. is Digital Corporate. I also understood that the U.S.
    sales slump is a U.S. Area problem. U.S. Area is a "peer" of Europe,
    and GIA. Whereas Digital Corporate is independent of the U.S. Area. 
    
    This would mean that the intimation that " U.S. produces the wonderful
    things that everybody else sells, so its unfair that we have a salary
    freeze" is misleading and false.
    
    Unless Digital Corporate has a freeze too. But if this were also
    true, I would suspect that the corporate freeze was possibly related
    to reducing overhead for the corporation, not due to the slow sales
    in U.S. Area.
                                                                  
    Clear as mud ?
    
    Scooter

< Note 818.221 by TRCO01::FINNEY "Keep cool, but do not freeze" >


>    My understanding is that the production side of Digital, manufacturing,
>    R&D, etc. is Digital Corporate. I also understood that the U.S.
>    sales slump is a U.S. Area problem. U.S. Area is a "peer" of Europe,
>    and GIA. Whereas Digital Corporate is independent of the U.S. Area. 
    
Then will you PLEASE come to Westminster and tell that to the management
here so I can get a raise?

- George

What is "Digital Corporate?"

Isn't that part of Central Engineering which is in the U.K. as much a part of
"Digital Corporate" as the part in the U.S.?

Yet only the part in the U.S. is under the freeze.

/john

    re: .-1 (John)
    
    Shucks, now I'm really confused. 
    
    FWIW, we have a freeze here in Canada (Regional level), which is
    due to a) not meeting overly optimistic predictions of growth
    and b) the lead set by the other Digital entities.
    
    ( sidebar: it sometimes gets really disheartening here at the front
    lines. So many Digits I work with or know are _really_working_their_
    hearts_out_ to do what they can for the company. I've seen so many
    long agonizing soul searching efforts to _give_the_best_ possible
    service to customers, genuine caring and professional concern, only
    to have all these efforts eliminated by a careless middlemanagement
    "pragmatic" decision, and then when the cry goes up from those who've
    strived so hard, the message comes back - 'don't care so much, and
    it won't bother you so much ...'   > sigh < when one hears that,
    it doesn't matter whether the 'pragmatic' decision was the best
    one or not. I've seen examples of this almost half a dozen times
    this summer alone ... but I digress. Back to our regularly scheduled
    gnashing of teeth and tearing of hair ...)
                                                                        
    Scooter

    I thought that the company wants to move people *into* sales.  Freezing
    US Sales salaries but not US Corporate would thwart this goal.

    One excuse I heard for freezing only US (and Canadian?) salaries
    was that some countries have laws that prevent salary freezes.
    I know that some countries require salaries to be indexed to inflation,
    but is any country more restrictive than this?

    Without getting into a US vs. them discussion, I suggest a further
    level of enhancement. US country did poorly, so freeze US salaries.
    Although I am in US country, it isn't my fault we did poorly, but
    I am suffering. Where do you draw the line? Personally, my review
    (raise) was due last May. I have been assured that it is entirely
    coincidental that it was pushed into July long before the freeze
    was announced. So, I have gone from a 14 month cycle before the
    freeze to a 17 month cycle in a three month freeze. You can do the
    math for succeeding freezes.
    
    This hurts.

    So isn't the 90 days about up?  Shouldn't an announcement be coming out
    that the salary freeze is {lifted/continued}?  Shouldn't someone be
    telling us *SOMETHING*??????
    
    							Pat

>    So isn't the 90 days about up?  Shouldn't an announcement be coming out
>    that the salary freeze is {lifted/continued}?  Shouldn't someone be
>    telling us *SOMETHING*??????

Past history and the lack of any information leads me to suspect that the
freeze will be extended another three months.

/john

In this case "no news is BAD news!".
I have a question, I don't do salary planning so I dont really know
the correct answer. It seems to me that it takes about 3 months to finish
salary planning. Now given that it hasen't been done yet, and I only
assume that the freeze is on for another 3 months (cuz I havent heard anything
to the contrary yet) then lets assume that its lifted at the end of six months.
It will actually be a nine month freeze will it not? because its going to take
3 additional months to "prime the pump" again.

- George

    Re .-1
    
    From what I've been told it will be more like a month to a month and a
    half between the decision to lift the freeze and the first pay raise.
    I wrote a note earlier in this topic saying that 'The dog that didn't
    bark implies that the salary freeze is now more than 3 months'.
    I was told in June that if the freeze was lifted for October we'd be
    doing salary planning in September. Well we haven't. What I don't
    know is if it is possible for the freeze to be a unit of months
    that is not divisible by free. If not its no money for anyone until
    the new calendar year.
    
    Dave

    REF 1.2.3  It takes about 30-45 days to complete the sal plan exercise
    since no one is talking about it, one can assume that it will go
    on for another stretch of time, I think we need to see Q1 results,
    and go on from there.

    
    When our plant manager first got everyone together to
    announce the freeze, he said,
    
    "There will be a salary freeze in effect for
     nine..uh..six..uh..three months..."
    
    Hmmmmmmmmmmm.....Sounded fishy to me ;^)
    
    Mark 
    

    Don't be too surprised if the freeze is extended for the remainder of
    the fiscal year.  Salary planning has not been done, the guidelines
    aren't out, the new ranges haven't been set, etc.  It's a given that
    Q2 is out as the paperwork should have been turned in several weeks
    ago.
    
    They could make it retroactive, but I seriously doubt it.  As Q1 will
    probably stink as well, I think we're all up the creek.
    
    Talking about pay for performance (hah!!) how does the former executive
    committee justify the massive stock options they gave themselves for
    fy89, including >10M for KO?  I heard Jack Smith say "there hasn't been
    a good decision come out of the Executive Committee in eight
    quarters."  That being the case, one would think they would have cut
    their compensation.  Oh well, what do I know..........

	RE: .234 I believe that the stock options were granted over a
	number of years. Last year had a good tax reason to actually exersize
	them (ie actually buy the stock that you could have bought earlier
	or waited until later). The way it worked out it made that one year
	seem like a big pay check when actually if was options accumulated
	over a number of years. I could be wrong but that's what I think
	happened.

			Alfred

I remember two things about the announcement.

1. They did NOT say freeze but used som other word.

2. As I recall, they also said that they were going to review Q1 results
and make a decision.  Now since the results are not out until Mid Oct or so,
they are not off their announced schedule.  

Points about the lead time to Plan and implement a Salary Plan will add some
time to that as well.

re Note 818.225 by TRCO01::FINNEY:

>     ( sidebar: it sometimes gets really disheartening here at the front
>     lines. So many Digits I work with or know are _really_working_their_
>     hearts_out_ to do what they can for the company. I've seen so many
>     long agonizing soul searching efforts to _give_the_best_ possible
>     service to customers, genuine caring and professional concern, only
>     to have all these efforts eliminated by a careless middlemanagement

        I think DEC management makes a really big mistake when salary
        increases are eliminated entirely.  Raises are one of the
        fair and effective ways of rewarding exceptional effort.  To
        proclaim a policy that says, in effect, that exceptional
        efforts will not be rewarded is to discourage exactly what we
        need "in times like these" (I recognize that some, internally
        motivated or having an unusually long-range perspective, will
        continue to put out exceptional efforts.  But fewer will.)

        Bob

    It's a delay, not a freeze. The difference being that the delay is an
    offset to all raises, rather than a free-for-all
    everyone-gets-a-raise-now event.
    
    As I understand it.

    Jack Smith made another interesting comment a few months ago when
    talking about the freeze.
    
    He said that the PBU managers had been asked/told/sent away to come back
    with solutions to the run-away expense problem.  When they came back
    and said there was nothing they could do to get a handle on expenses,
    then that left the Executive Committee with the only thing they
    directly control, i.e., salaries and stock options.  Their decision
    is obvious.
    
    He didn't sound happy with the PBU's unresponsiveness on this issue.

    A salary freeze by any other name is a salary freeze.  A salary delay
    is expecting to be paid on Friday, but getting the check the following
    Monday.
    
    Believe me, if top management lacks the internal financial information
    to make a judgment on whether or not to extend the freeze, then we're
    really in trouble. (Disclosure of Q1 financials to the public... that's
    a different matter.)

	It would still be nice to get information about the frieze from
	within DEC, and not to read it in the paper or on the Reuters
	news service!

	Will upper management let us know.....  ??

	- Mike

>	It would still be nice to get information about the frieze from
>	within DEC, and not to read it in the paper or on the Reuters
>	news service!

I think a frieze around Spit Brook would be a great idea! The buildings are
awfully bland looking, and the only bit of external artwork (the barcode)
was ruined when it was recoded.

    At DECathalon, we were told more than once how financially healthy
    DEC is.
    
    I find that difficult to reconcile to the freeze.  Who's kidding
    who?

    
    
    DEC is financially, very healthy.  And will continue to be so. 
    
    The problem lies in how our management deal with downturn in the
    industry or the economy or sales slump.  They have to cut cost,
    and the main variable cost is salary increases.  People cost is
    fixed.
    
    Another problem is that DEC is trying to deal with a maturing company,
    not a growth company that is has been for the past 30 odd years.
    It has to change head set, and it is very slow.  It is part of human
    nature to hold to the past that has made us successful.  We have
    to change, no ifs, ands, or buts about it.  Whenever a problem arise,
    we cannot fall back on old techniques or methods.  It does not work
    any more.
    
    
    peter
    
                            
    
    
    

>    DEC is financially, very healthy.  And will continue to be so. 
>    
>    The problem lies in how our management deal with downturn in the
>    industry or the economy or sales slump.

    Not so fast Johnson. It's not because a company is still very
    profitable and has lots of cash stashed away in a bank that you can
    declare that company financially very healthy. More on Digital's
    situation another day. There's a sales slump in the US allright, and
    there'll probably be one in Europe very soon: that's a symptom.

    And then folks try to fix something to cause the symptom to go away: in
    this particular case, what's the obvious thing to do? There's a sales
    slump, thus there's a sales problem, thus let's take a look at the
    Sales Organization and make things a bit simpler and more efficient.

    What if the problem is more likely to be that there's Sales slump not
    because there's a Sales problem but because customers just don't want
    to buy more stuff from us? There's a very serious problem with this
    approach to our difficulties: the problem is that KO keeps saying that
    we have the right products at the right time, that engineering is
    delivering, etc: In other words, the current thinking of top management
    is that our problems aren't due at all to a bad or mis-positioned
    product mix. Only time will tell whether this is a mistake of gigantic
    proportions or a stroke of genious. Opinions?

    Regards,
    Denis.    

    RE: .-1
    
    I don't think we have a black-and-white situation here.  I don't think
    we can say the problem is EITHER the sales organization OR our product
    mix.  I think it's some of both, and some other things too.
    
    I've been in front of customers enough to know that part of our problem
    is our catch-up position regarding UNIX and our refusal to acknowledge
    Token Ring as an industry standard.  You'd be hard pressed to convince
    me otherwise; I've heard it for too long from too many customers.
    
    Certainly time-to-market is an issue, and will continue to be one.  We
    must learn to get our products out the door faster without sacrificing
    quality.  How?  If I knew I'd be a rich person today.  I just know it's
    got to happen.
    
    The measurement systems in sales have gotten so complex that it takes a
    Philadelphia lawyer to figure out whether a rep made his budget or not. 
    Turf battles take up more of some reps' time than selling.  Stovepipes
    abound, due to an outmoded system of metrics that served us well for
    many years but just doesn't work anymore.
    
    Digital is working hard to correct these things.  I believe
    (particularly after the announcement last week) that K.O. has a handle
    on our problems and is committed to doing something about them quickly. 
    But the problems Digital faces today aren't simple, and the solutions
    don't come easy.
    
    							Pat

    RE: -.1
    
    AMEN!!
    
    Having heard Uncle Ken talk at Summer School, I also believe that he is
    personally committed to removal of stove pipes and Red Tape.
    Unfortunately, there are oodles of layers of "Keepers of the Red Tape"
    between KO and myself, and they are not getting the message. Maybe
    Uncle Ken should talk to all the internal Keepers of the Tape????
    
    It'd be interesting ... and much appreciated, I'm sure.
    
    /se
    

    Earlier this week I met with a senior IS Manager of Mitsubishi in Tokyo
    who complained about Digital's lack of apparent concern for the
    Japanese market.  His evidence is the number of products which are not
    available in Japan or are delayed significantly as well as the
    perceived quality of our products.

    He made the statement that "Digital's approach in solving its current
    financial problems seems to be moving toward to moving the growth in
    Japan to the same level as in the US."  It was difficult but I smiled
    and did not reply other than to say something about Digital being
    committed to solve customer needs.  By the way, Digital Japan is still
    run much like the good old Digital and their sales grew 30% last year.

    The salary delay and other reactionary measures are typical of a short
    term view toward solving a long term problem, as so many people have
    already pointed out.

    Let's hope that Digital gets back to the old style instead of the
    American business school approach which is now destroying Digital.

    In the mean time let's remember who we're really working for and who
    we're really working against.  I believe that the answers are customers
    and the competition, respectively.

    Keep the faith,

    don

    re .246, .247:
    
    stovepipes?
    
    Dick

    I'll take a stab at it, Dick... others may add their own impressions.
    There's a phenomenon at Digital wherein each organization looks out for
    its own best interests.  It's metric-driven and results in some fairly
    foolish behavior.  In resolving these problems, oftentimes it requires
    escalation to a senior vice president because that's the first level
    where individuals from the individual stovepipes meet.  It takes a lot
    of resolve on a "peon"'s part to drive a problem that far up the chain,
    so the problems tend to sit and fester.
    
    my take,
    Marge

    Every Digital organization commits itself fully to achieving the goals
    it has set for itself (or has had imposed on them).  Good matrix
    management, so far, so good.

    Once these goals are established, the tin cups come out and each
    Digital organization seeks other Digital organizations to partially
    commit to their goals.  But each goalset is unique(!).  This sort of
    behavior was institutionalized in "All Hands on DEC"

    In fact, effective teamwork is punished as the "teaming" organization
    or person is scrutinized for "how come you had the excess resources to
    help this other group".  "Natural" teams in DEC can't work together
    because their management chains are united one or two reporting levels
    under Ken Olsen, ie the stovepipe, as opposed to an inverted tree or
    pyramid.

    In power management, the organization that "gets" the most and "gives
    up" the least, wins.

    And when it comes time to recognize achievement be it drinks after work
    or a trip around the world, each "stovepipe" looks out for its own.

The description in the "is the salary freeze over yet?" note about how one
manager does salary planning got me thinking about what a miserably tough
job that is.  not wanting to clobber up that note with yet another side
discussion, I put this here instead.

Take a hypothetical situation like this:

Your very-important-to-DEC project has three principal engineers on it, all
of whom you have honestly given a "2" rating to at their last performance
reviews.  By this you meant that none of them walk on water, but all three of
them, in their own ways, consistently out-perform your expectations, go the
extra mile, put in the extra time when needed, and in general are the sort of
people you really want to have working on a project like yours.  These people
are:

Paul: long-time DEC employee whose is being paid the median salary for his
      job classification

Paula: has been an employee about as long as Paul, but makes 20% less, although
       you don't know why her salary history is this way, since it was true
       long before you met her.  Maybe her sex?

Poul: snatched from an important customer during the last non-hiring freeze
      period; you were lucky to get him in and are very glad to hire him, but
      in order to entice him to leave his old employer, you offered him 20%
      more than Paul makes.

These three people are bright; there is a pretty good chance that each of them
has a pretty good idea of what the other two make.  They are good enough
friends that they might even have ASKED each other.

So now you have to redo the salary plans for these three folks this month.
You have been told that you are to average 4% raises over a 15 month cycle
(since those were the numbers the manager gave in the other note).
What do you DO??

Do you give Paula a big raise, Paul an average raise, and Poul no raise at all?
If you do that, Poul will probably leave, since he is obviously job-mobile, and
you don't want that! - the guy is GOOD!

Do you give them all the same raise, since their performance is the same?
If you do, Paula is likely to leave, and you don't want that! - she is GOOD!
Recall that she almost certainly knows that she makes 40% less than Poul does.

What if one or more of them leave no matter WHAT you decide?  Remember, the
project is very important to the company, which is why you managed to snag
three such good people for this one project in the first place.

/Charlotte

PS - Although I know folks at DEC named Paul, Paula, and Poul, no one with any
of those names works in my current group.  And I am not the group manager -
luckily for me!

    Re: .252
    
    You have just described why the bean-counter mentality doesn't work.
     In this instance in salary planning.  It may be true that Digital
    as a whole, all 120K (or whatever) of us, should net out toi a 4%
    raise.  To apply the percentage per force on down is pointless,
    it's stupid, and it is statistically inaccurate (i.e. the error
    on a sample of three is staggeringly high).
    
    Perhaps the description of the action is a description of the actors,
    yes?
    
    Don
    

    re: .252
    
    I've never been a manager at Digital, so I've never done salary
    planning myself, but I know what I'd _want_ to do if faced with
    the situation Charlotte described.  I'd push on my management 
    to make the pool larger than three.  If the pool covered a large
    cost center (or group of small cost centers) then there would be
    room to reward the high-performers well, at the expense of the
    low-performers.
    
    Also, in answer to the other question that Charlotte asked, if the
    three are equally valuable I would try to give them equal compensation.
    That means that the lowest-paid get the larger raises.  If the
    highest-paid guy can't see the fairness of it and leaves, then
    that's too bad.  I wouldn't give an unfairly low raise to someone
    else to keep him under these circumstances.
        John Sauter

    That was actually a simplified version of one of the role-playing cases
    in the Positive Power and Influence course; theirs is a lot more
    complicated, with more employees with various skill sets and various
    extenuating circumstances.  But I never realized how lifelike that
    example really was!

Re: < Note 818.252 by CADSYS::RICHARDSON >

If I had to live with a 4% average, I'd recommend something like:

    Paula - 6%
    Paul - 4%
    Poul - 2%

My view is that you're never going to get read of all "inequities" in
one fell swoop, nor should you try to. (There would be massive disruption
if you gave no raises to any Pauls until all Paulas had salaries equal to
Paul's, and no raises to any Pouls until all Pauls and Paulas were at Poul's 
level.)  *Over time*, the salaries of people of roughly equal abilities will 
tend to converge, and those of higher ability will move toward higher salaries.

P.S. When I was a documentation supervisor, I was involved in salary
planning. These are exactly the kinds of issues that supervisors and
managers have to deal with in the planning/negotiation process.

    What I'm beginning to understand from this note and the "thaw" note is
    that the PA rating is taken into consideration when salary planning is
    done?  Is that correct?
    
    I was told (about a year ago) that when planning is being done, that
    Personnel asks the managers to *plan the next performance rating* for
    each employee?!?  Was this true?  Is it still the case?  The manager I
    know who told me this said that he "planned" *each* of his direct
    reports as a "3" since there was no conceivable way to accurately
    predict what an employee's performance would be like over the next 12
    months.
    
    How much of a factor does the PA rating play in salary planning?
    
    Jon

    An interesting sidenote to all this PA/SA stuff is that your PA
    rating actually has nothing to do with your SA. ie go to personnel
    and check your files. Yes it can be done. Youll find a form for
    each increase you have gotten. and you may likely find on it your
    PA rating. Usually its lower than stated on the PA you ,your manager
    and DM signed. Hmmmm Why is that?
    
    As far as predicting what an employee will do in the next year most
    cases are if the employee has performed well in the past he/she
    will do well again. In cases of new employees the learning curve
    explains that.And in the opposite case maybe personnal or work related
    problems expalin the decrease. While the latter is unpredictable
    these are pretty much the case.
    
    	re.252,253,254
    
    I don't believe that percentages really expalin the whole thing.
    If Poul is the highest paid and his performance is as before
    then he should still get the highest raise $wise not percentage.
    Or he should be making what he is in the first place.
    
    If Paula is the lowest paid of the group and her performance is
    as before then she should get a good raise maybe before Paul and
    Poul. 
    
    If Paul is the guy in the middle and his performance is as before
    then he should get a good raise before Poul.
    
    After writing this it sounds awful simplistic.
    
    In reality none of these things are done. 3 and 4 performers get
    bigger %s than 1or 2 performers. Just for the reason to bring them
    up. If they wouldn't get any raises or very low maybe we'd have
    less of the above problems.
    
    I feel for managers, at this time and in the past, but they dug this
    hole we are now all in and someone should now start to pay the price.
    
    Mike
    

    RE: The 4-6% raises .256?

    My wife is a Personnel specialist (No, not with DEC) and she and I have had
    this discussion a number of times.  She feels that % is the way to do
    increases and I feel that $ are the only things that are worth talking
    about. Anyway, lets look at the example.

    				Paula	Paul	Poul
    Original salary		20K	25K	30K
    % increase			6%	5%	%4
    $ amount of increase	1200	1250	1200

    Now you tell me, who got the better increase??  Will Paula who is as good
    as Paul and Poul ever catch up??  Will Paul ever catch Poul??  I have
    strong feelings in this area because I was once in the same salary
    situation as Paula.  My solution was to leave that company who then took
    the Poul person as my replacement!  I contend that this is percent wise and
    dollar foolish.

    FWIW,
    Lee G.

    To those of you who have tried to deal with the situation in .252:

    Now you know why you are not managers at Digital.
    
    The solution to this problem is...
    
    Rate Paula a 4, but give her a 4% raise because, as you tell her,
    she has so much potential and has been an excellent worker in the
    past.  Put lots of emphasis on whatever things kept her from really
    being a 1 and gloss over the good stuff by acknowledging her
    contribution but explaining that such extreme hard work is the norm
    here.
    
    Rate Paul a 3, and give him 4%.  Lightly emphasize the bad stuff
    while de-emphasizing the good.
                    
    Rate Poul as the 2 and give him 4% because, as he knows, he is already
    in the upper echelons of his group.
    
    Now you have successfully:  - Kept them employed (or 'used' as the
                                  case may be)
                                - Kept to your 4% budget without doing
                                  any actual work, like complex math
                                - Not attempted to correct a situation
                                  which was created by someone else
                                  who has probably risen to a better
                                  position than your are in, because
                                  to correct it means admitting it was
                                  incorrect in the first place
                                - Maintained your staff at the overall
                                  3 rating which keeps you in line with
                                  your peers.
    
    Such an easy exercise, and so many examples of how to do it around.
    
    

    re: 259
    
    I agree with you.  The number of dollars is what counts to the person
    getting the raise, not the percentage.  Percentages are NOT equal
    unless they are based on the exact same amount.

    
    REF: Note 818.252 - Paul, Paula and Poul
    
    There is no solution and the way the "system" now works is nutty.
    
    Moreover, it breeds people competing with one another at the expense of
    true teamwork and cooperation for the betterment of the group and
    Digital overall.
    
    Another Digital employee told me of the little rural gas station he
    worked in 40 years ago that sold TONS of gasoline, tires, antifreeze,
    etc.  The owner decided he wanted to make the cornerstone of his
    business based on providing service to satisfy customer wants, first
    and foremost, with the natural consequence of satisfied customers being
    they willingly buy lots and lots, over a long period of time.  It
    worked.
    
    Then, to breed teamwork and cooperation first and foremost in his
    employees, he paid everyone a fixed salary, each different according to
    skills and know-how.  Then he paid everyone a standard commission
    (early form of profit sharing), everyone equal.  No salary raises
    unless everyone got the same dollar increase.  Thus, the only way to
    make more in the short run was to achieve high levels of sales, based
    on service first and foremost.  If sales were high, everyone shared
    equally; if sales were low, everyone shared the lack of commissions
    (profit sharing) equally.
    
    According to this employee, the "salary planning/compensation" program
    in this rural "service" station worked like a charm in nurturing
    cooperation over internal personal competition.  Everyone decided
    amongst themselves (early empowerment) who would do what tasks each
    day, with all rotating in all functions, sharing equally what had to be
    done to get and keep the customers.  All had ownership in building the
    customers, and all had a stake in the team's success -- the profit
    sharing percentage.  There was excitement everyday in going after the
    "winning" of each customer that drove into the station.  Sales soared,
    and so did the incomes of every employee -- doubling!
    
    Digital's numeric rating of employees is manipulative and accomplishes
    nothing in qualitative feedback, when it's needed most (remember
    the ol' three minute manager guidelines -- give feedback, likes,
    dislikes, immediately or not at all).  And it does nothing to create an
    atmosphere of equality of reward based on mutual cooperaton and
    teamwork where we and our company succeed TOGETHER or not at all.
    
    Our compensation system is archaic and should be scrapped for a new one
    that breeds COOPERATION and TOTAL DIGITAL SUCCESS vs. personal success,
    first and foremost.
    
    Such a system offers superior benefits toward building a more
    successful Digital into the decades ahead.  Evidence that COOPERATION
    is SUPERIOR to a philosophy of nurturing internal competition amongst
    employees can be found when examining the success of major corporations
    in Japan.  COOPERATION is first and foremost, where everyone and the
    company succeeds TOGETHER.
    
    If ten DECies in an airplane crashed on a desert island, would they
    compete with one another for food, one getting more than another?  Or
    would they in fact work together in true teamwork, equally sharing the
    work and equally sharing the food, regardless if the performance of one
    employee was a "2" and another a "4" according to someone's SUBJECTIVE
    opinion.  You know all would work together in the true spirit of
    teamwork for all ten DECies would know that only through cooperation,
    first and foremost, would the group survive.  Personal agenda and
    competitiveness at the expense of another would not be tolerated.
    
    Intuitively, we all know that total cooperation is the superior
    philosoply.  Our metrics and salary planning and compensation system
    should be changed to one that nurtures only cooperation.
    

    I applaude the above example as it does exemplify the simplicity
    at solving such problems. If the employees are friends they may discuss
    this in the future and everyone talking %s feels they got a fair shake.
    But looking at the other side of the coin Poul continues to gain on
    everyone else as he should. However a real 4 performer probably will
    make out very well the next raise as they have been suffering due
    to the LOW wages they have been getting and the added burden of taking
    calls that they can't/won't fix. And the 2 performers will have to play
    "Follow me boys" again ie fix the 4 performers stuff and get a smaller
    raise percentage wise and $ wise. 
    
    But .260 really does typify the manager philosophy. .260 I hope you
    aren't a manager. If you are sorry !
    
    	Mike
    

>< Note 818.262 by ODIXIE::CARNELL "DTN 385-2901 David Carnell @ALF" >
    
>    If ten DECies in an airplane crashed on a desert island, would they
>    compete with one another for food, one getting more than another?  Or
>    would they in fact work together in true teamwork, equally sharing the
>    work and equally sharing the food, 

DECcies or not, some would scrounge, hoard, and fight for "enough," and some
would share, cooperate, and even sacrifice for one another.  The prime
determining factor would be the perception of whether there was enough
for all at all.

If you expect to draw this as an analogy to the real-world work environment,
herein lies the fallacy of your example:  1) only ten people, all of whom
can know one another and learn to understand what each can and will do;
2) a desert island scenario, with no place else to go.

Typical compensation schemes are built on personal interest first, other
motivating factors second.  The goal of these schemes is to get people
who are me-firsters to recognize that the good of the team will benefit
each as an individual, but failing that, the goal of the manager is to figure
out how to leverage someone's self-interest so benefit to all is still
a side effect.  

- tom powers]

    
    	The discussion about Paul, Paula and Poul ignores one major factor
    if they are indeed equal in all things except for salary -- the salary
    ranges for the, presumably equal, job classificiations that they have.
    If there is that significant of a pre-raise salary difference, then the
    highest paid of them (Poul?) would probably be near the top of the
    salary range.  A manager in that case might worry about how close to
    the absolute top of the salary range that he/she wants to put Poul at
    which would make the next salary review that much harder.  (Getting too
    close to the top locks the manager into only being able to give Poul a
    raise as the salary range increases.  That puts salary planning out of
    the hands of the manager which he/she would probably try to avoid.)
    
    	My guess is that in the real world, Poul would get less than 4%,
    but not "enough" less to make him upset (especially if the manager is
    good at explaining the effect of being at the top of a salary range),
    the middle person would get 4% and the lowest amongst the three would
    get slightly over 4%.
    
    							-craig

	Of course, in an organization that believed in pay for performance
	the 4% guideline would be a guideline and not a rule. In the 3P
	case the higher paid person would get a nice raise, the middle
	range person would get a very nice raise, and the lower paid person
	would be bouncing off the walls with joy. After all doing less
	would be admitting that the high priced person was being paid too
	much. Now either this is the way DEC would handle this case (some
	how I doubt it) or DEC doesn't believe in pay for performance.

			Alfred

Re:< Note 818.259 by MANFAC::GREENLAW "Your ASSETS at work" >

.259>Now you tell me, who got the better increase??  Will Paula who is as good
.259>as Paul and Poul ever catch up??  Will Paul ever catch Poul??  I have
.259>strong feelings in this area because I was once in the same salary
.259>situation as Paula.  My solution was to leave that company who then took
.259>the Poul person as my replacement!  I contend that this is percent wise and
.259>dollar foolish.
  
I just received mail from someone that worked for DEC for 6 years until
just recently. They became frustrated with making 20% less than other people
with comprable positions within the company so they took a new job outside
DEC so that they could receive a median salary that they had tried for years
to get to (without any success). Actually, they will get about 10% more than
DEC median for the position. This person loved working for DEC but not for
considerably less than others doing the same job. They are now history.

If Digital chooses to replace them with someone from outside DEC will have to
pay considerably more than what the former employee was making. From what I can
tell, this is acceptable practice at DEC.

We could fill several notesfiles with stories of such as this one.

People (not 'resources' or 'headcounts') have been, are currently, and will
continue to be Digitals' greatest assets.

Lee

    Re: .258
    
    Mike,
    
       I've been a manager at Digital for 3.5 years and believe me it is
    not simple to compensate fairly all of the time with the "guidelines"
    (read rules) we have for salary planning. I did not make these
    guidelines, but it is my job to follow them to the best of my ability.
    Most of us managers are human, some of us are terrible at what we get
    paid to do, and still others do a reasonable to great job.- Just like
    everyone else. Someone in one of the previous notes indicated the
    best way to equalize the situation with the three Ps - stagger the
    raises (ie. one at 10 months, one at maybe 12 months, and maybe one
    at 15 months with appropriate % increases.) The goal here is to correct
    any inequity over time since we cannot correct it in one fell swoop
    lest we hurt the innocent employee withual skill.
    
    As to whether the percentage or dollar amount is of more importance, my
    experience has been that ALL employees will discuss their % with their
    peers but NOT the $ amount! I do agree that the bucks count more with
    me but the times I've had disagreements with my direct reports have
    always been over the fact that X got n % more than me.
    
    -Terry {no, it ain't easy but I try my best}

re: the 3P example..

A more creative manager will try to push the salary distribution back up 
to the next rung on the ladder, hoping that with a larger number of employees
to spread the 4% among, there will be some poor performers to offset his/her
good performers, and appropriate pay-for-performance can be achieved.

This has been done successfully in the past.

In general, however, people are at the mercy of their starting salary.
Significant increases are very hard to come by in even the best of times...
in today's market, they are not possible.

That is why it is important to negotiate a proper starting salary, or decline
the job.   There is no "making it up later."

Any increase at Digital will always be based on how well you manager can 
fight for you...  You get paid for his/her performance!

Bob

    I read the 3P scenario and came to the opinion that it in fact
    illustrates two problems that occur in larger companies.  The first is
    the fact that Paula did not in the past get equal pay due to sexual
    discrimination.  Though new hires tend to be hired in at equal pay
    levels, due to the numbers oriented nature of salary review employed,
    this previous discrimination never gets corrected as there is no means
    to correct it.
    
    The second problem is known as tenure creep.  The longer a person stays
    in a company, the further his/her pay lags behind that given to
    new-hires for the same job.  This is due to the fact that it takes an
    increase in pay to entice people away from their other employers in
    most cases.  IMHO, this shows that the value of the job is going up
    faster then the pay that a person receives.
    
    Larry

    What I dislike about the way the 3P scenario is handled by Digital
    is not that it is unfair and involves blatant discrimination against
    women and long-term employees, but that Digital publicly says it
    isn't so.
    
    If you treat your employees as Digital *actually does* then don't
    put blatant lies like "An Equal Opportunity Employer" and miscues
    like "Digital pays for performance" in the ads.  
    
    (I call the second a miscue because Digital does pay for performance,
    but there should be an asterisk to a small-print explanation that
    lets you know the performance we pay for is your non-Digital past
    and your selling job at the interviews.)
    
    The first paragraph of the "Digital Philospohy" is honesty, and
    we do not keep it past the first comma.
      

    Re -1:
    
    Are you implying that DEC pays for non performance? Even if you
    are not, there have been MANY people who have. All this talk about
    "dead weight" that needs to be cut away.
    
    I'm sorry, but I don't see it.  I'm in sales and I've seen my unit
    go from 12 to 5 people over 12 months, mostly due to the corrective 
    action plan because of performance.  We are back up to 8 now, with 
    new hires and transfers. 
    
    I've no experience in other areas, outside of sales, but I can tell
    you that the pressure to sell you budget is more then cosmetic!
    Every year, regardless of what you've done in the past, you are
    faced with a NEW and LARGER budget and not making that budget can
    result in the corrective action plan being started.  
                  
    So, when you imply that DEC is paying for nonperformance or that people
    are just riding along, not doing their job, I think you need to
    be more specific. 
    

Sales does seem to have a way to eliminate dead wood, but the practice
has a rather serious side effect in that it encourages short term goals,
but this is covered under a different topic.

As is true in most of the industry, you can get better increases if you are 
willing to hop from company to company.  This is because comapnies are
willing to pay a premium to attract good people but the put artificail limits on
the amount of increase a person could expect.  Wait a few years (hope you
survive) and see where your pay sits with respect to new hires.  

Larry

RE: < Note 818.272 by HOCUS::RICCIARDI "Mark Ricciardi New York Financial" >
>                 -< In sales, if you don't sell, you're gone! >-
>
>    Re -1:
>    
>    Are you implying that DEC pays for non performance? Even if you
>    are not, there have been MANY people who have. All this talk about
>    "dead weight" that needs to be cut away.
>    
>   I'm sorry, but I don't see it.  I'm in sales and I've seen my unit
>    go from 12 to 5 people over 12 months, mostly due to the corrective 
>    action plan because of performance.  We are back up to 8 now, with 
>    new hires and transfers. 
    
You must realize that DEC is two different companies:  DEC Corporate,
where all those enlightened policies espoused in personnel publications
are practiced and the Field where anything and everything goes.  

You are correct that in the field there is a low percentage of
"dead-wood" because of the $$$ considerations imposed by the MGMT and
because it seems that Sales and Field Circus are the only places people
can get fired from for poor performance.  HOWEVER, once you go up north
it is very clear that there are large numbers of people who have retired
at full pay.  People just show up a couple of hours a day so they can 
collect their check.

Note that the field does have it's share of "dead-wood" especially in
overhead areas.  Why did someone from the N.Y. Area DIS have to make up
a 5 copy form for printer installations? 

John

    Re: .272
    
    My .271 referred not at all to the performance of individuals, rather
    to the performance of the salary 'planning' procedures, and the
    effective attitude of management toward people.
    
    As to performance in your sales group, consider all those who are
    also measured by YOUR success, not theirs.  For example, marketing
    people may be measured on some form of metric concerning their area
    of interest but they need do nothing to make their numbers.  That's
    because x-thousand field-level people have to make that number for
    them.
    
    For example, your manager must make the sum of his people, and so
    on up the chain.  You have noted that your group shrank drastically
    due to non-performance.  Did this non-performance come about because
    the manager hired people unfit for the particular job?  Were the
    non-performers properly trained and led?  Were they motivated by
    management or reduced to a bunch of malcontents?  Have they gone
    on to become homeless winos, or did they find an organization to
    which they were able to contribute?  
    
    Basically, did they fire the manager?  Rate him a 4?  You may not
    have to look too far for someone who is not pulling his weight.
    
     

Re .272

<light candle>

Boy do I remember the "numbers" game.  The creation of "this years" number was
what somebody decided they wanted the one-of(unit/district/...) to make in the
given year.

This was/is true in SWS as well as sales, though the number is associated with
the salesman with who's accounts you were tied to.   It is wonderful to have
my future based on someone who's hardware number is all important and couldn't
be bothered by selling software (or services) because that took work.  (Before
anyone howls, it only takes a few to pull down many).

Also, having your career (as a salesperson) based on the whims of management and
possibly a lousy marker, no matter how good you are, and being "corrected" out
of a job for spending 80-120 hours a week trying to make your number (I saw this
side of sales also) and a SWS person's (or unit's) who is riding on your
coat-tails is blatently not "pay for performance" but "pay only if you do
what I want".

Maybe it is time to reconsider some sort of salary + commission for sales again.
The salary would be minimal, which would keep overhead for comatose wood lower,
but the commission would give that 100 hour plus performer incentive to go
a little bit further, push a software contract, make sure the customer is happy,
sell a 6300 instead of a minimal 6200 (excuse me 6000-300 and 6000-200) if that
makes sense.  Incentive to learn the market better (instead of focusing on the
next call) and the products that fit the market, would come out of this also.

Perhaps tie the commission to more than the total sales such as:

	1) sales value + happy customer + service/software support = f(x)%

	2) mediocer customer ratings, reduce by f(happiness)%

	3) no/little service/software business, reduce by f(non-support)%.

This would make the goal CORPORATE, not just the highest money generating
function and would provide real dollar return for extra effort AND making
customers happy.

This means, making customers unhappy with huge SOFTWARE contracts would be
just as detremental as selling a 9000 to a customer which only needed a
Microvax (thoug the 9000 would still probably contrubute more to the
salesperson's bottom line }8-)}  ).

<blow out candle>

					Bill

    
    
    Why not do something like this:
    
                                  Starting salary 1990
       Widget apprentice 1             2000 cronians
       Widget apprentice 2             2100 cronians
       Widget apprentice 3             2300 cronians
    
       Widget-person  1                2600 cronians
       Widget-person  2                3000 cronians
       Widget-senior                   3500 cronians
       Widget-principal                4200 cronians
       Widget-consultant               5000 cronians
    
    
      Every year, everyone gets a base raise of inflation rate-1%.
      Every 4th year, starting salaries are adjusted to industry standard,
      and everyone gets an adjustment % wise to the new standard.
    
      Those were standard of living adjustments.  now to merit pay.
      A bonus plan should be implemented, where the most productive
      groups get the biggest piece of the profit pie.   Each group's
      share of the pie is then distributed amongst the employees,
      starting with 0 cronians for non performers, to a larger piece
      for excellent performers.  9 to 5 people get about that 1% that
      that they don't get in that cost of living adjustment.  Superstars
      set a larger bonus. 
    
      How do you handle people from the outside?  explain the bonus plan,
      and possibly give them a few hundred cronians "bribe" at the end of
      the first year of employment as well as any bonus that should be
      normally given.  The same goes for college hires.  The "bribe"
      money should be distributed by personnel, and the regular bonus play
      should be handled by the department the person works for.  In this
      way, the department does not know what amount bribe was settled on,
      and thus is free to  give a bonus without regard to that original
      agreement. 
    
      If a person gets a promotion, they move their base pay up to the next
      level automatically.  Although a person may receive bonuses and
      salary in excess of the next base pay level, the increase in person's
      salary would not overlap the next base salary.
    
      This would encourage the group to be extra productive (to get more of
      the pie for the group as a whole) and promote self-motivation    
      (to get more of the individual portions) 
      
    

re: 818.277
    
>      Every year, everyone gets a base raise of inflation rate-1%.
>      Every 4th year, starting salaries are adjusted to industry standard,
>      and everyone gets an adjustment % wise to the new standard.

I have not read the replies to this topic and I do not intend to get further 
involved in this discussion, however, the above caught my eye as it violates
the laws of basic economics.

One of those laws is that firms that do better(worse) than the industry average 
can pay more(less) than the industry average. If DEC only used industry 
averages, some would get discouraged and move elsewhere.

Another law is that local supply-demand conditions for particular jobs affect 
pay, not industry averages. Employees can choose to relocate, if all they care 
about is a higher wage level (which often reflects a higher cost of living).
If adjustments do not take into account local cost of living, then employees 
will move. This is not uncommon.

There is no such thing as THE "inflation rate". The cost of living varies 
significantly geographically.

    
    
    Re .278
    
    
    regional cost of living issues can be factored in...obviously
    metropolitan areas have a higher cost of living than remote areas.
    These numbers are factored into the present system.  
    
    Anyway, like I said in the title,  the more I think about it, the more
    I like our present plan.