IBM Consulting workers told management wants to 'more closely align pay, performance'

At least they're not having to 'justify' recent work or resign

Exclusive IBM Consulting wants employees to know they're not all created equally, a point it intends to reflect in a "closer alignment between pay and performance."

This is according to an internal communication sent to the Consulting team and seen by The Register. Big Blue says it "continuously evolves its performance management systems," and as "our priorities and strategy have shifted to remain competitive in the market, it became clear that our performance experience needed to revolve too."

Via an SAP SuccessFactors tool, IBM intends to hold performance reviews just once at the end of each calendar year, and these will feature "three key dimensions" including business outcomes, skills, and behaviors. Each of these will have a "Met / Not Met" rating.

Based on the scoring systems, 15 percent will be classified as "top performing," 70 percent will be "core" and 15 percent as "low." This will "align with your GDP payout"

"Starting with our 2025 performance year's GDP program, if GDP is funded, top performers will be given 2x GDP funding, core performers 1x GDP funding, and low performers will be skipped," the internal missive added.

GDP refers to IBM's "growth-driven profit" program, which links some incentives and bonuses to both a staffer's performance and the IT giant's own financial performance.

IBM says its data indicates "we haven't done a good enough job of differentiating and rewarding top performers, but now, we have an opportunity to change that.

"These changes are designed to align IBMers' efforts and outputs with the execution of our strategy to be the world's premier asset-based consultancy and bring greater transparency and rewards to IBM's incentives program."

Revenue in the Consulting division was $20.84 billion in IBM's 2024, ended December 31, down 2 percent year-on-year. James Kavanaugh, CFO, said on an earnings call in January:

We continue to see clients re-prioritizing their IT spending towards digital transformation and AI initiatives for cost optimization and operational efficiency.

The profit margin for Consulting was 9.9 percent, down from 10.2 percent in the prior year.

With the bottom line in mind, IBM is looking to find $3.5 billion in productivity initiatives this year, in line with 2024, and it seems inevitable that the "refreshed performance experience" metrics will be used to this end, identifying those that don't cut the mustard. ®