IBM sued again by its own sales staff: IT giant accused of going back on commission payments promise

IBM has been sued by sales manager Mark Briggs for allegedly capping sales commission payments despite a written commitment not to do so, joining dozens of cases claiming Big Blue screws its sales staff. The lawsuit [PDF], filed in a US federal district court in Northern California on Friday, challenges IBM's practice of …

[Snake]

This is becoming way too common

So here I was, discussing corporate double-speak, and IBM attempts to take it to new heights by playing the games in courts of law.

Whilst still hiring new sales recruits on the commission premise all at the same time.

I'd like to meet the villainous scum who pull these stunts, just to see if they are as slimy IRL as their actions make them appear.

[Daedalus]

Exeunt

IBM has failed to note what happened at other companies where the sales droids felt their income in jeopardy - a mad dash for the exits followed by an oddly unexpected decline in sales for the company. Selling is selling, and it's usually easy for the good sellers to take their marbles and play elsewhere. Maybe that's what IBM really want - the mass resignations, not the shrinking sales, of course.

[David 132]

Re: Exeunt

IBM doesn’t seem to want any employees who are aged over 35 or based in high-wage Western countries, so I’m sure they’re not that bothered. I’m also sure it’ll work out very badly for them in the long term as they continue their glide-path into utter irrelevance, increasingly trading on their name and long-passed reputation, but hey, by then the CxOs responsible will have retired and it won’t be their problem.

[Fruit and Nutcase]

Re: Exeunt

On the other hand, if you are a lawyer working for IBM, then, your tenure is assured

[Daedalus]

Re: Exeunt

Yes, just imagine IBM taking pride of place next to Polaroid, on the cheap knock-off shelf in Poundland.

[Julz]

Just

Pay salaries...

[Timbo]

Re: Just

...but then the sales reps might just sit on their back sides, and drink coffee all day long and complain that they cannot generate sales due to Covid-19/unreliable hardware/a competitor discounting/there's an R in the month etc etc

And then the bean counters will see that they are being paid too much (for the sales that they are supposed to be generating) and will seek to reduce their salaries and give them an incentive to earn more by offering a commission. This a known way of cutting overheads in many industries...

And that's where we are. 'Cept Big Blue appears to be reneging on paying the promised commission amounts (alledgedly)...

[Intractable Potsherd]

Re: Just

If people aren't going to do their jobs, then they shouldn't be working. Paying extra for one part of the entire process is inequitable. Put everyone on a salary, and give dividends to everyone based on sales/profit/whatever at the end of the year.

[Julz]

Re: Just

A pretty successful computer firm, DEC, did just that...

[Robert Grant]

Re: Just

Define what "do a job" is in a free market and you're fine. Given you can't, you need to incentivise to figure out the market's state.

[Anonymous Coward]

Re: Just

That worked out really well for communism.... Regardless of how much you may not like it, money motivates people and incentivising sales people generates sales - tying pay to the results of a global monster like IBM is a disincentive as however good you are you have no ability to materially change your take home pay.

As an ex IBMer I saw what happened when they screwed the technical teams on commission ten years or so ago..... Morale plunged through the floor and no one did anything beyond the bare minimum costing to company sales, and delaying new products - some of which were so late to market as to become irrelevant.

This is yet another brilliant case showing how accountants ruin companies such as IBM. They know the cost of everything but understand the value of nothing.

[dinsdale54]

Re: Just

That's a fine way to guarantee you won't have many decent sales people.

Salesfolks are coin operated. This is a feature, not a bug. Take advantage of it by paying generously to people who sell a boatload of stuff.

[Yet Another Anonymous coward]

Re: Just

The ideal salesman is a coke addict with a big car lease and at least 2 ex-wives with support payments.

[ecofeco]

I never get tired of saying it

Fuck IBM.

[FozzyBear]

Re: I never get tired of saying it

I never get tried of hearing it

[Yet Another Anonymous coward]

Re: I never get tired of saying it

>Fuck IBM.

I think that's their new ticker symbol

[oldcomputerguy]

Pay 'em what they are worth !

I never understood this. If a sales person earns $1 million in commissions, how much added revenue did the company get? $100 million? I would kiss the sales peoples feet and honor them as rock stars. If they are that good, why is there any limit on how much they earn? If they earned $100 million in commissions, but brought in $1 billion in revenue, holy moly!!!! What's wrong with these companies ! What IBM is doing is telling their sales force to hit the MINIMUM targets. That's just plain stupid. This is from a company that is slowly dying. Cheat the sales force to hit a quarterly targets to please investors. I would not trust IBM to honor any contract with this nonsense going on.

[Paul Kinsler]

Re: Pay 'em what they are worth !

Or, if they really don't want to pay the same fixed percentage on all sales - which might be considered a reasonable position - just work out a systematic taper scheme where the sales person always gets more for the bigger sale, but just not quite so much more.

[Blank Reg]

Re: Pay 'em what they are worth !

With IBM involved in so many of the world's largest IT disasters, I don't know how they even get any contracts.

If you want an IT mega-project to be over budget and also fail then IBM is the company for you.

[elwe]

Re: Pay 'em what they are worth !

The problem is that commission isn't a fixed percentage across the board. It takes the same amount of work to do a $50,000 sale as a $50m sale and a $5,000 sale. So the commission percentage has to vary.

One place I worked had sales droids partitioned into different categories, with different percentages based on the size of deals they were expected to do. Leads were passed to an appropriate sales droid for the size of the lead. If they went above their targets the percentage commission went up for all the sales $ above target. It was fine, until one guy generally doing $5,000-$15,000 sales generated his own lead on a $10m sale, closed it and was owed 50% commission. While this was a US company, the sales droid was UK based, so they had to pay up. He bought a Ferrari and left the company right after they paid out (but did come in and show off the Ferrari).

[Imhotep]

Re: Pay 'em what they are worth !

The same amount of time maybe, but if you tell a salesman who can bring in a million dollar sale that he will be paid the same as someone who can gring in abthousand dollars - you end up with a company of thousand dollar salesmen.

Good sales people are a special breed. You want to keep them and keep them happy.

[Cliffwilliams44]

Re: Pay 'em what they are worth !

Because "Bean Counter"!

I've seen this time and again in every company that had a sales force. As soon as the sales people start making "real" money management either changes the plan or puts a cap on commissions. Said caps were never in the original agreement.

And yes, what happens? The good sales people LEAVE!

[Anonymous Coward]

Re: Pay 'em what they are worth !

The problem with commissioned sales people is that they're paid based on revenue, not income. I've run into too many cases where our sales guy was fighting to keep an unprofitable customer where the sales guy made 100K, the company "made" a small profit until you calculated overhead and the commission cost.

My suggestion was to pay commission based on something like gross margin. Shot down for "reasons".

[dinsdale54]

Re: Pay 'em what they are worth !

Some companies do pay commission on margin, most don't. However while the salesrep might not be paid on margin you can bet his boss has a margin target. The problem is that the margin changes with the amount you sell. i.e. you sell 3x as much then the %overhead of you being employed has just dropped by 2/3 (OK, oversimplification)

This is why sales plans tend to have big commission multipliers once you have sold over your target. You have covered your costs to the company so it's all upside from there on.

[Imhotep]

Re: Pay 'em what they are worth !

It seems they have a cunning plan to get rid of their top earners and save a lot of money.

Yet to come is a cunning plan on how to replace the revenues lost by their first cunning plan.

[jason_derp]

This won't end

Something tells me IBM will manage not to pay anybody in sales anything they were promised, right up until they quit existing because shareholders realize they do nothing and make nothing that anybody is needing or using.

[DS999]

Malicious compliance

Is what's needed. If IBM wants to cap their commission, once they max it out they should take the rest of the year off. Tell their clients "I'll help you out on January 2nd".

[FozzyBear]

Re: Malicious compliance

was going to say the same thing. Nothing says "Pay me my commissions" like no sales for Q2,3 & 4

[Anonymous Coward]

Carrot and stick

They’re going to need a longer stick!

[Jonathon Green]

Sales Lizards shafted and IBM in court. Sounds like a double win to me!

[Duffaboy]

The thing with sales and commission is

The salesperson is only focused on their pockets and will sell you anything to get some extra wedge. For me that's not looking after the customer, however it's a double edged sword, no commission no sales, but if you do have commission and you have the preverbal selling sand to ....

[Anonymous South African Coward]

Wait, what... so the contract is not enforceable?

So the salesdroids just have to say "eff off guv", not sign it, and get on with their lives?

[Anonymous Coward]

IBM Pay avoidance

IBM have always looked for ways to avoid paying people properly. Back when I was at IBM in the early 2000s, the career progression in pre-sales was wait for the older guys with final salary pensions to retire or go into sales. I tried the sales route. Did 140% of my target but anythj g over 140% needed EMEA sign off so my manager changed my target two weeks before year end.

I went back to presales and left IBM four months later.

[Blackjack]

So... why are people still working for IBM?

Is that hard to get a new job?

[Uncle Ron]

Same, same...

This is certainly not new at IBM. Thirty years ago, I was part of a 3 or 4 person team that sold a huge deal to a university. My share of the commission would have been 10's of thousands. In today's dollars--probably $60 or $70K. I got nothing. The branch manager simply didn't like me. So he cut me out. They didn't give more to the other guys, they just didn't pay me. I didn't fight it because it was a time in my life when I didn't want to lose my job--part of the calculation I'm sure. The quota letters were the same then as now: "Not a promise or a guarantee. Not a contract," and, "at-will employment." I heard many stories of guys earning million dollar commissions that simply weren't paid. They just couldn't stomach the idea of paying a salesman a million dollars. An IBM Director once actually told me, "The product sells itself. We don't really need sales people." I am certain that the IBM Company and it's shareholders have been paying for this attitude for decades.

[Yet Another Anonymous coward]

A cunning and subtle plan

Problem:

Having riffed all the experienced engineers and replaced them with offshore call centres working from a script, IBM has a problem with unhappy customers

Soln:

Get rid of all the sale-persons - so no more customers

Triples and bonuses all round !

[Throatwarbler Mangrove]

Refuse to pay salespeople . . .

. . . pay lawyers instead? It seems like IBM may not have thought their cunning plan all the way through.

[Yet Another Anonymous coward]

Re: Buh Buh Buh Diversity!

>Diversity in leadership ensures a better company, or so we're told.

I hope no-one tells Microsoft, Nvidia, AMD, GOOGLE, ZOOM etc

[a_yank_lurker]

Round Whatever??

Itsy Bitsy Morons seem to like to be court by not paying the sales team their commissions. The manglement is not paying attention. Other than big iron and Red Hat, they do not have a product that is truly competitive and I am not so sure about the big iron. Red Hat is competitive but there are other Linux server distros available that are just as capable. There is one product that a tech savvy person would consider without much coaxing; the rest are also rans.

[xyz123]

Why doesn't an IBM rival simply poach its top salespeople (all of them) and cripple IBM.

IBM is like old yeller anyway, and needs to be t̶a̶k̶e̶n̶ ̶o̶u̶t̶ ̶t̶h̶e̶ ̶b̶a̶c̶k̶ ̶o̶f̶ ̶t̶h̶e̶ ̶w̶o̶o̶d̶ ̶s̶h̶e̶d̶ ̶a̶n̶d̶ ̶s̶h̶o̶t̶ Sent to live on a lovely farm.

[Yet Another Anonymous coward]

Remember nobody ever got hired for working for IBM

[Anonymous Coward]

End of IBM on Dow Jones

What will IBM be removed from the Dow Jones? They are just a shadow of their former self. Their market cap now not much larger than other smaller IT companies who are less than 10 years old. It's really time they are removed and replaced by another company (like they were years ago).

They have squandered their dominance of IT from just a few decades ago. I guess even Jeff Bezos said Amazon will die one day .... “Day Two is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day One,” Bezos answered.

They way they treat their staff is testament to them accelerating their irrelevance and demise.

[Yet Another Anonymous coward]

Re: End of IBM on Dow Jones

Ironic if Lenovo bought IBM just for the stock of old logo'ed laptop bags

[Potemkine!]

Do it the soviet way

"When they will stop pretending they are paying wages, workers will stop pretending they are working"

[SgtPapa]

IBM Senior Sales executives seem to enjoy screwing sales people

As someone that was hosed for a 6 figure commission by IBM I can attest that they will treat you like garbage if they can.