I have a problem with publicly traded companies...

[Deschodt]

I've worked for 10 years each for 2x Top 100 companies, different sectors, technical management level, company names not important. I've also got friends in many other big companies, and apparently this behavior is widespread, and it's really starting to bug me..

Here's how it goes: (a team of )Someone(s) in a corner office throws a dart at the wall to guesstimate next year's "numbers", I like to call this a "butt number" because sometimes they pull it out of their a$$. I know I'm oversimplifying, there are trends, forecasts, etc... but bear with me : at the end of the day, it's a *guess* and next year's forecast is a butt number... call it an 8% profit hike, whatever metrics you like !

One year later, said company somehow incredibly (in this recession) makes 7.5%, very near that butt number. They made money, gobs of it, paid bonuses, are highly profitable, and increased their overall profit by 7.5% over last year's profit which was already pretty nice. Wow !

Yet, we did not make the "butt number" by 0.5 %, and therefore people *MUST* to lose their jobs ! Not me... Just saying, I've seen it happen for 20 years now, it makes NO SENSE at all to me. Each team must cough up someone ! No rational justification whatsoever, no financial need to do so, but we must please the shareholders and send the right message! Are you effing kidding me ?

As long as you made a profit, any profit, and there is no apparent systemic problem in the company, $%#$%$% why ??? Why not fire the butt number guy instead ? He's easy to find, his fingers stink !!! Sorry, just venting... do non publicly traded shops behave like that too ? I think I'm ripe for a change of career, I'm turning a bit socialist I guess, but I hate seeing good people lose their jobs when there is ZERO need to fire them !

[masraum]

My other favorites. Oh, we didn't hit our goal, so you'll only get 90% of your bonus. Oh, and your yearly review. You're going to be rated on a scale of 1 to 5. You can't actually get a 5 in anything because that would mean that you could never improve. Since you cant get a perfect score,that also mean at you can't get 100% of your bonus. So, we said that you could get a 5% bonus, but then after we take 10% off twice, youre only going to get about 4%.

Or, wow, we killed this years co goal (probably for some unusual set of circumstances that boosted business) so everyone is going to get more than there 5% goal even after we take 10% out because you're not perfect. But we don't want to have to pay out this much in bonuses again, so we're going to set next years bonus unobtainably high. That way we'll make up this years bonus expenditures next year.

[porsche4life]

I work with a guy that got canned at a big company. He worked in maintainance and was such a bad bad employee b/c he would stay longer than his shift if he needed to so he could get a piece of equipment back running ASAP.... Corporate idiots.....

[asphaltgambler]

LMFAO!!! - because it's all true and not only with just public traded co's

[slakjaw]

Originally Posted by masraum

my other favorites. Oh, we didn't hit our goal, so you'll only get 90% of your bonus. Oh, and your yearly review. You're going to be rated on a scale of 1 to 5. You can't actually get a 5 in anything because that would mean that you could never improve. Since you cant get a perfect score,that also mean at you can't get 100% of your bonus. So, we said that you could get a 5% bonus, but then after we take 10% off twice, youre only going to get about 4%.

Or, wow, we killed this years co goal (probably for some unusual set of circumstances that boosted business) so everyone is going to get more than there 5% goal even after we take 10% out because you're not perfect. But we don't want to have to pay out this much in bonuses again, so we're going to set next years bonus unobtainably high. That way we'll make up this years bonus expenditures next year.

+1

[emcon5]

I worked at one who would habitually sandbag their prediction, just so they issue a press release guiding upwards, and then beat their estimate at earnings time.

After a year or so, the market seemed to have figured it out, and the one time we met our prediction, the stock fell sharply.

That company went bankrupt a few years ago.

[sammyg2]

I'll be sitting in on a 1-1/2 hour long presentation this morning from our CEO presenting our finalized 2011 business strategy, both corporate-wide and specific to this plant.
Lots of planning and thinking goes into it, at least at the larger corporations. Very dry, hundreds of slides, hard to stay focused.
Show of hands, how many of us have sat in on a board meeting?

Not sure how it works at your company, but at the companies I've worked for the process is waaaaay more complicated than you describe it. They don't just pull a number out of their butt.
The CEO and directors come up with goals based on feedback they get from major shareholders and investors, like mutual funds etc. They basically make promises to investors to get them to invest in the company. CEO's are basically just salesmen.

So they develop a stategy to increase shareholder value (drive up the stock price) to attract more investors and keep the ones they have happy.
The top brass presents the goals to the VPs and say,
come up with a plan and strategy to make this happen within these guidlines. The VPs do just that, and once the directors buy it they start implimentation.
If the VP's are not very talented they can come up with bad decisions and BS numbers, but usually those guys don't last that long in big corporations.

Now, one thing I do not like about publically traded corporations, the top brass tends to be short-sighted.
They fight to make this year's numbers, or next year's numbers, but there is not that much incentive to look long term into the future. Too often a CEO only has the job for 5 years or less, so they don't worry that much what happens 6 years from now.
That leads to bloated employment numbers in good times and lay-offs in tough times.

[gtc]

Originally Posted by masraum

My other favorites. Oh, we didn't hit our goal, so you'll only get 90% of your bonus. Oh, and your yearly review. You're going to be rated on a scale of 1 to 5. You can't actually get a 5 in anything because that would mean that you could never improve. Since you cant get a perfect score,that also mean at you can't get 100% of your bonus. So, we said that you could get a 5% bonus, but then after we take 10% off twice, youre only going to get about 4%.
...

ha, so typical here, and we aren't even public.

[widebody911]

At my company, the annual employee ranking uses a 5-point scale, which for the sake of simplicity, I'll call A (highest), B, C D E (lowest). A manager is only allowed a certain number of A's, and must have a certain number of E's. Irrespective of how well you performed, you run the risk of being an "E". As you can imagine, this creates a lot of political machinations. To make things even better, each manager is given a pot of bonus money to distribute as he sees fit.

[Deschodt]

Originally Posted by sammyg2

Show of hands, how many of us have sat in on a board meeting? [...] the process is waaaaay more complicated than you describe it. They don't just pull a number out of their butt.

I fully understand the process is more complicated than that... But my point was, at the end of the day, it's a guess... an educated guess, for sure, but a guess nevertheless. It's also a target... unless they have a time machine I don't know of.

My beef is that if you come "oh-so-close" to that "educated butt number" (better? I added educated ;-) and still made tons of money, just maybe 0.5% less than planned, you should not be firing good people. That's asinine...

Now on the flip side, so you don't think I'm a total socialist, last year they could have fired deadwood, and there is plenty, but instead cut everything else like printers, paper, Cofee, first aid kits!!!! and some of the morons are still working here... I guess I object more to the indiscriminate "all teams must cough one person" attitude, especially when come bonus time, you see all those new BMWs in the parking lot... Not much logic there, in my eyes anyway... I guess I should start my own company and do what I please, till then I got no right to complain ! ;-)

[sammyg2]

Originally Posted by Deschodt

I fully understand the process is more complicated than that... But my point was, at the end of the day, it's a guess... an educated guess, for sure, but a guess nevertheless. It's also a target... unless they have a time machine I don't know of.

My beef is that if you come "oh-so-close" to that "educated butt number" (better? I added educated ;-) and still made tons of money, just maybe 0.5% less than planned, you should not be firing good people. That's asinine...

Now on the flip side, so you don't think I'm a total socialist, last year they could have fired deadwood, and there is plenty, but instead cut everything else like printers, paper, Cofee, first aid kits!!!! and some of the morons are still working here... I guess I object more to the indiscriminate "all teams must cough one person" attitude, especially when come bonus time, you see all those new BMWs in the parking lot... Not much logic there, in my eyes anyway... I guess I should start my own company and do what I please, till then I got no right to complain ! ;-)

Points taken.

There's an old saying that goes something like this:
Everyone knows what's wrong with a company except the people who have the power to do something about it.

It;s not unusual to have incompetence in middle management, lots of bad decisions, but upper management is usually too busy covering their backsides to pay attention to it.

The wide brush (every department cuts 10%, or one person, etc) is a pure and blatent sign of incompetent leadership.
That just tells the world they don't have a clue what to cut so they're cutting a little of everything.

But there's one more thing we must always remember: a company doesn't owe us anything.
We can always walk if we don't like it.

[sammyg2]

BTW if you really hate your boss you can call the white house and they'll set you up with a lawyer so you can sue.

Hate Your Boss? Call the Government - FoxBusiness.com

[wdfifteen]

My take on it - large companies exist in their own universe where morality and the laws of logic as we know them don't exist. How else can an executive run his company so badly that he has to beg for government welfare - then hand out bonuses to himself and his fellow execs? (ie: AIG)

[Don Plumley]

I ran a reporting division of a public company. Budgeting was a serious process with simple realities: Deliver, and all is good. Don't deliver, then you have an opportunity to recover. There were few second chances. Fortunately, my division delivered.

While there certainly are poorly run/poorly managed firms out there, trying to lump all companies under this veneer of "this is how public companies are run" is like trying to judge Porsche based on the 924.

To Sammy's point that "CEO's are just salesmen"; well, not in the pejorative sense, but you are right. The real difficulty is translating the goals and vision into operational plans and then insuring that they are done. Read up on Larry Bossidy to see what kind of mind-numbing detail a "real CEO" has to be on top of to get the job done. It looks very glamorous from far away, but up close, it's very hard work.

[AirKuhl]

Originally Posted by sammyg2

That leads to bloated employment numbers in good times and lay-offs in tough times.

...is the answer to......

Originally Posted by Deschodt

My beef is that if you come "oh-so-close" to that "educated butt number" (better? I added educated ;-) and still made tons of money, just maybe 0.5% less than planned, you should not be firing good people. That's asinine...

A good company has a long range look and adjust budgets (headcount) accordingly. A LOT of times, companies that do this get bad reps for working employees too hard even when times are good. But often they don't have to shed as much excess headcount when times are lean. It's a very tough balancing act. Short-horizon, reactive companies tend to over-hire and then over-fire in a constant cycle.

[BlueSkyJaunte]

Originally Posted by Don Plumley

Read up on Larry Bossidy to see what kind of mind-numbing detail a "real CEO" has to be on top of to get the job done. It looks very glamorous from far away, but up close, it's very hard work.

AlliedSignal / Honewell, right? I know lots of former employees of that company. There were lots of interesting games played....like RIFing a bunch of people right before the end of the year to make their numbers, then re-hiring them back in January.

A lady engineer I know who worked there used to have to get sign-off on various design changes like oil line routing. If she didn't show up in a skirt the lead engineer (a former Garrett employee) wouldn't sign off on it.

Sounds like good times...

Thom, yours is not the only tech company that adopts a "forced bell curve" to the review process. It's utterly maddening. And let's not discuss the "under-represented minorities" who require 3x the documentation to HR any time a performance issue arises.

[sammyg2]

Originally Posted by Don Plumley

To Sammy's point that "CEO's are just salesmen"; well, not in the pejorative sense, but you are right. The real difficulty is translating the goals and vision into operational plans and then insuring that they are done. Read up on Larry Bossidy to see what kind of mind-numbing detail a "real CEO" has to be on top of to get the job done. It looks very glamorous from far away, but up close, it's very hard work.

I've known a few CEOs and this is basically a reader's digest version of how they worked (doesn't always work this way):
A CEO comes up with a general business stategy and marketing plan and "sells" it to the board of directors, and they give him the green light to proceed.
He then "sells" it to the big investors, and also "sells" it to the market analysts.

Then he tells his subbordinates to make it happen and follows through to make sure he delivers on his promises to all those people so the stock doesn't tank.
He makes all kinds of appearances, selling himself and his company.
A good CEO is bigger than life.

I also disagee with a previous post by others that corporations are heartless immoral monsters. I've found the opposite to be true of most. There are some that are out of control but most try to be moral and ethical and contribute to the well-being of society, with varying degrees of success.

[nynor]

so, this year, the company i work for announced that we wouldn't be getting a yearly raise (even though we killed it profit-wise last year) due to the economy. we have killed it again this year.

SOOOO..... they keep going on about performance reviews. LOL!!! then, when you get your performance review, there are the SAME comments on them as last year, only your score is 1/2 to a full point higher in every category! LOL again! of course, it means SQUAT FUGGITY because there is no raise this year.

my director had the gall to talk to me about performance reviews. i couldn't help chuckling. it was comedy.

[widgeon13]

God, I'm glad I'm retired and this schit is behind me. For many years I had to write my own evaluation and it was then critiqued by my boss, who happened to be the president of the company. It actually forced some real critical thinking on the part of both parties. The evaluation was the follow-up to earlier established objectives.

Interestingly, I worked for seven (7) different presidents over thirty years, 2 actually retired and 5 left the company. I often wonder how I survived all those years.

[Superman]

Originally Posted by Deschodt

Why not fire the butt number guy.........? !

Butt Number Guy, a.k.a. "The Boss"