Do you believe this program is strategic? Why or why not? Should employees salaries be reduced for the time they attend training programs? What other ways might IBM convince the affected employees to update and gain new skills?

Case: IBM Offers Training (and Pay Cuts) to Employees to Learn New Technologies Some employees in IBM's Global Technology Ser vices group received e-mails from the company in- nology Ser only a few hundred employees in the U.S. technology only a few hundred emplos forming them that a recent evaluation had identified services outsourcing business. The purpose of the dentified program is to help om program is to help employees develop key skills in them as an employee who had not kept pace with areas such as cloud ang areas such as cloud and mobile computing and ad- acquiring the necessary skills and expertise needed expertise needed vanced data analytics. Because the program can help to meet changing client needs, technology, and mar- employees in the long employees in the long term to increase their billable kets. As a result, IBM requires them to dedicate one hours with clients, IBM De ts. IBM believes the salary cut is a p to twenty-three total days between co-investment cost shared by both the employees and 014 and March 2015 to focus on training the company. IBM calculated that it will lose one day this time, the employee will take a pay cut of billing clients each week that the employees are in receiving only 90 percent of their base salary. Once Once the training program, which matches the 20 percent the training program, who training is completed, salaries will be restored in of the compensation of the employees involved. So rull. Employees can either take the training or look the 10 percent salary cut actually splits the difference. for job opportunities within IBM that better match Do you believe this program is strategic? Why or their current skill set. why not? Should employees' salaries be reduced for Employees have reacted negatively toward the pro- the time they attend training programs 7 Provide a ra- gram. Some feel the program with its pay cut is unfair tionale for your answer. What other ways might IBM because their work has received positive evaluations convinced the affected employees to update and gain from their managers. Also, employees noted that all new skills? workers in their group were being assigned to the same training program regardless of their individual Sources: P. Thibodeau, "IBM Cuts Pay by 10% for Workers skill levels. A few employees believe that the training Picked for Training," Computerworld (September 15, 2014). program is a cost-cutting exercise that is being pre- Accessed from www.computerworld.com February 12, 2015; sented as a training program. A spokesperson for IBM S. Lohr, "IBM Offers Workers Training and Pay Cuts," New York Times (September 17, 2014). Accessed from http://bits emphasized that the salary cut and retraining program blogs.nytimes.com February 12, 2015; P. Cappelli, "Back to was not standard practice across IBM, but affected the Future at IBM," Human Resource Executive