IBM needed a new way to pay employees to reflect the focus of the changing Performance Culture of the company as expressed by its leadership and most notably by Lou Gerstner. As Director of Compensation, we needed to drive manager training a “boot camp”- of sorts to get managers thinking about how to deliver pay. Our approach was to convince managers to provide huge increases and stock options to the top performers, while not increasing pay to employees who were already well paid for what they were producing. This didn’t come easy, new tools were required, extensive education to managers, developing more open and transparent statements for employees.
Every General Manager was committed and briefed and helped ensure managers focused on the new approach. The result was larger increases to top performing employees, and the introduction of a broader stock option programs. The best result, however, was that IBM’s attrition rate never exceeded single digits during the most volatile “dot com” gold rush of the late 1990’s. No other “Tech Company” came close.