January 08, 2008

Businessperson of the Year !

Business Week names Mark Hurd Business Person of the year !

8 comments:

Anonymous said...

Marilyn

Jan 7, 2008 3:03 PM GMT
Yes, from the Street side, HP looks like it's doing great things, although I find it interesting that BW didn't mention how poorly the server/storage side has been doing. Meanwhile we employees have our benefits reduced to paper-thin, our merit raises eliminated, and our morale is in the toilet. I know many people who have been with the company for 10-20 years, who now say "this isn't the company it used to be - I'll be out of here in six months." There is no consideration for the employee anymore. And regarding the comment about Mark Hurd building up the sales force? HA! He hired a sales VP from Oracle, where the model is "burn 'em out, push 'em out." There was a hiring binge in Jan./Feb. 07 where tons of salespeople were hired. Then in October, hundreds were laid off, mostly folks who'd been there awhile, i.e., with larger base salaries, and they're being replaced with new people with no experience. Way to take care of your employees AND your long term customers, Mark.
Ali

Jan 7, 2008 2:49 PM GMT
Nonintuitively, I think Hurd is actually capitalizing on the much-maligned merger with Compaq that Fiorina envisioned and executed so effectively. You could say that he was lucky to get the company just as the benefits from that merger were kicking in. There is no doubt that his focus on operational efficiently has maximized this benefit. However, how many consecutive years of bottomline growth can you get from cost-cutting? It still remains to be seen whether he has the ability to grow HP sustainably by utilizing its core competence; its history of nurturing engineering talent.

Anonymous said...

LongTermHP

Jan 4, 2008 10:40 PM GMT
I am glad that the "Happy at HP" and "Happy HP Employee" are happy working at HP now. Since they may not know what has been lost over the last 8 years since Carly and Mark have arrived on the scene. Everyone wants to point fingers at HP employees and claim that we are lazy, unmotivated and expecting of bonuses. Nothing could be further from the truth. HP Employees have always been at the forefront of major technology advances, like the handheld calculator, laser and inkjet printers, the laptop computer among many, many others. Profit sharing was instituted by Bill and Dave with the idea that if shareholders benefited, employees should also benefit from the success of the company as well. HP regarded customers, shareholders and employees as all critical to its success. Paying Managers 30% and 40% bonuses when employees are getting 0-8% is unfair and de-motivating. Mark and cronies will pay the piper at some point.

Think Al "Chainsaw" Dunlop

Jan 4, 2008 5:51 PM GMT
If you measure a successful businessperson simply in terms of monetary figures, then Hurd has gotten his due. HP has grown past IBM, and the stock is up since Hurd came. PERIOD. Look deeper BW and find a company which was one of the very most respected in the world. Not today; don't blame it all on Carly. Hurd has focused primarily on one item: expenses. The easy money has been wrung out and he's now squeezing the living life out of any respectable employee and even retirees. Think of Hurd more as Al "Chainsaw" Dunlop and what he did with Sunbeam, more than BW BusinessPerson of the Year. Do employees matter anymore or is it simply $$ and stock options? It's still too early to see, but as the heart and soul of any company, it's workforce is squished under Hurd, a very different HP will result and it won't be proud. By then Hurd will have his own island and he'll never know the difference. BW, dig a little deeper, don't just jump on the band wagon. This is just a sell-out.

Happy at HP; Happy with their products

Jan 4, 2008 5:11 PM GMT
Before I was an HP employee, I bought their products and was happy with performance and customer service. Then I became a happy consultant, then a very happy employee. Both my husband and I have worked for companies that failed to weed out or work with non-performing individuals. That's the TRUE de-motivator for high performers. HP benefits are grand; salaries are more than competitive; many are happy here. Classic "profit-sharing" can breed a sense of entitlement if you get x% bonus every year, even with mediocre or average work. If your manager isn't rewarding your great work, find another. People don't leave a great company; they leave their manager. Vote with your feet. Mark is on the right track.

DJ Belt

Jan 4, 2008 4:19 PM GMT
BW is right on target selecting Mark as a very special manager. I recently retired from HP, coming through the gates of DEC and Compaq, HP is like a great homecoming where the opportunity for anyone can step up and be a part of a very GREAT company. HP is a company like a family. It's the people that make a difference and a leader like Mark creates the environment for excellence.

HP Losing its Charm

Jan 4, 2008 4:01 PM GMT
I definately agree with most of the comments here that HP is losing its charm. Maybe for outside world HP is a great company but for the employees of HP, I don't think so. The Margins have of course increased as well as the share price in the market but all these at the cost of the employees' satisfaction. We don't think that this is really a workable long term strategy. In short term it's fine, but long term HP is going to lose its employees, customers, everyone. We don't think that this is what Dave and Bill have dreamt about HP.. Very Sad for HP :-(

Anonymous said...

HPEmployee

Jan 4, 2008 8:12 AM GMT
Mark Hurd is unethical. He is doing things people of conscience would not do. There comes a point when you have to acknowledge he is so indifferent to his fellow man and come to the conclusion he is a rotten person. When you screw people on raises and bonuses for hard work it says that you don't appreciate other peoples' efforts. What is sad is he is getting rich off the people he screws out of a few thousand bucks a year.

Employee who got nothing where mngmnt took all

Jan 3, 2008 4:36 PM GMT
Yes, I agree with Bob and LongTermHP who reacted earlier. The employees doing the work are the victims and I cannot think this success will last when the workforce is de-motivated.

Ted

Jan 3, 2008 5:35 AM GMT
Jerry, Bill and Dave are not back in town. While HP's stock, profits and marketshare continue to grow, the employees see less and less. Most have not seen a raise in over 24 months, and managers now control the distribution of a company bonus. Each manager gives a big bonus to his/her buddy while top-ranked staff see nothing. It's really sad how things get portrayed outside the company - but at the end of the day it only matters if Wall Street likes what it sees.

Anonymous said...

LongTermHP

Jan 2, 2008 5:54 PM GMT
The success of HP has been excellent since Hurd took over, but it is not without its casualties, namely the employees. HP had a history of innovative and flexible policies that engendered fierce loyalty among an incredibly hard working workforce. And while HP was never the top paying company, the sense of community and the overall benefits were second to none. Now, as Hurd claims to want to be the best IT company on the planet, he is benchmarking the salaries and benefits against other companies to the degree that HP will have the most mediocre workforce in the industry. It's no wonder more than 50% of employees on a recent survey said they would leave HP if they had a comparable job waiting for them. Once the operations have been cut to the bone, and employees are over-worked, underpaid and under-appreciated, what happens then? Or, should we all just be glad we have a job? When the stellar results are not there and Wall Street and BusinessWeek turns against you, what then?

Anonymous said...

From the CPB to the VPB – bonuses and salary increases

As many are aware, in this FY the company will replace the CPB (Company Performance Bonus) with the VPB (Variable Performance Bonus). Last year the company began distributing varying amounts to the business divisions, depending on their performance, and despite the anger of the workforce, intends to continue doing so, and also plans to take it a step further: each employee is to receive an individual bonus determined by the immediate superior. It is uncertain whether this bonus will be decided solely on the basis of the FPR (Focal Point Review).

The result: employees who work in less successful business divisions will be at a disadvantage. And everyone knows that individual performance assessments are a highly subjective undertaking.

According to HP management, future increases to base salaries will generally be small, with the salaries adjusted to market trends mainly through the VPB – which could also mean no adjustment in case of poor business performance.

The company may also terminate the works agreement on salary increases, which states that 25% of the “pool” set aside by the corporation for salary increases must be distributed equally to the entire workforce, with the remaining 75% to be allocated at the management’s discretion. However, the cancellation of the agreement will make little difference, since the €18 increase granted in February was not really an increase at all.

If the works agreement on salary increases is retained, employees would actually be better off if there were no “pool” because they would at least be guaranteed a partial inflation adjustment. Of course a reasonable employer would not want to deprive the workforce of salary increases. However,
the VPB is a clever way of sidestepping the issue, with the top employees to receive most of the increase, the majority only a little and less successful
ones presumably nothing. That is not acceptable !

Turning salary increases into bonuses based on the company’s business success is a way of transferring the business risk to the staff. For the employees, this makes a lottery of personal financial planning. They cannot influence the company’s results; nor can they correct bad management decisions or control the global economy. It is also problematic to link salaries to the annual performance review, since that, too, is affected by factors outside the individual’s control. People who live on wages and salaries have to deal with rising costs and therefore need a minimum increase to avoid incurring a de facto decrease.

Individuals cannot base their financial planning on bonuses determined by the success of the entire company. Such bonuses are also not included in future pension calculations. If business is bad, employees face the double threat of job losses and the non-payment of bonuses. If business is good, it is safe
to assume that the company will distribute only as much of the profits as it deems appropriate in the form of bonuses, with the rest set aside for shareholders or for stock buy-backs. Employees who secure their standard of living by working will suffer an even greater sense of insecurity.

Even the economy as a whole will be impacted : after all, who will
borrow money to buy a house or apartment if they cannot be sure of making the payments ?

A further danger : HP employees will fall behind the overall salary trend in the IT sector. The results are already evident. New hires are generally paid more than long-serving employees – otherwise they would hardly switch to HP. And in areas where the employment market is picking up, HP is seeing higher staff turnover, with many citing the new employer’s salary structure as their reason for leaving.

In the coming weeks the works council and the employer will have to negotiate a sensible and acceptable solution, because the distribution of existing salary pools is subject to codetermination.

However, under the law the amount of money in the pool cannot be negotiated by a works council, but only by a union.

The following basic points must apply :
- At least a cost of living increase must be granted to all employees
- The total of all salaries across the company must increase in line with the IT employment market in Germany.

- Other payments (VPB, incentives and eAwards) must be paid over and above basic increases instead of replacing them. It’s up to the works council. They will decide the shape of compensation guidelines at HP for the next few years. They will be judged by the results!

Anonymous said...

Jan 14, 2008 1:42 AM GMT
Hurd did it by cheating hardworking folks out of their Christmas bonus....thanks BW for worshipping Scrooge!

Jan 8, 2008 6:42 AM GMT
Worked for HP under Carly and Hurd. Carly failed at making a smooth trasition with the Compaq merger but was beefing up the customer services and support side. These groups were receiving dismal ratings from customers so she was hiring more qualified engineers, consultants and support people. Customer ratings and return business was improving before she left. She lacked on the product side though. Hurd's strategy is to beef up sales and purchase or partner other companies' products and sell as HP. Once sold he doesn't care. He's done well with this but maybe the #s are exaggerated due to the cost cutting. He's letting all the Tech consultants, support engineers and services people walk due to his HR strategies. The company is moving towards operating with an overstock of managers, a bloated sales force and no one to implement and support the products or services it sells. Stock price short term success, no long term strength. Hurd will cash out and be long gone. Be prepared.

Anonymous said...

Jan 8, 2008 2:14 AM GMT
Read the HP employee reviews at http://www.proletar.com/By-Employees/HP.html and judge for yourself.

LeRoy

Jan 7, 2008 10:10 PM GMT
From the outside Mark looks like a superstar, but wait till annalists look at how the cost cutting and profit increase is taking place. For a company that touts IT leadership, our IT department's personnel has been cut by 75%. Engineers are forced to repair their own desktop computers. We tell other businesses to put an inkjet on every desk, Made us remove them all because they cost too much to operate. We move our overseas cost to the US to show how profitable our overseas business is. This doesn't even count our 1% pay raise after we make record profits. When will some savvy annalist dig into the HP numbers to see that what is being shown is just smoke and mirrors, HP is doing great now, on paper. Wait 2 years; see where we are then

hpwf said...

US employee testimony ( I have to cut, I do not want this bog to be closed by Corp) :

HP just cut our severance packages yet again. Last time they did it they talked about coming in line with "industry standards". This time, no reason. We get 1% or zero raises. Hiring freezes. They only hire consultants and not real employees. They are moving everything they can to China and India. Goodbye American innovation. Give it all to the Indians and Chinese.
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This company and this CEO disrespects us at every turn.
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Morale is at an all time low. Most would leave if they could. Many interview and look around in case something better comes along. I know that I do.

Even when numbers are good and you division does well and you work hard, you expect to get laid off. The cuts are constant and you never have ANY sort of feeling that you belong, that this is "your" company. They treat us like we are all temp workers and let's face it they will eventually WFR all of us so that they can just hire temps and contractors and not pay any benefits. That's the new model.

Pensions? Gone. Stock options? They don't seem to be giving them to anyone but people like Hurd. There is only an incentive to work enough to not get fired and to look for something better outside HP.

There are no water coolers you have to bring in your own bottled water to drink. They took away the flavored teas. No dairy for coffee or tea. They still offer coffee and tea but with that non dairy garbage. Why bother?

They are selling off all their real estate and renting in small buildings and even then it's not enough. They are always squeezing more and more. They invest thousands in moving an office to a smaller one only to try to close that too.

Internal service is terrible.
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You get what you pay for, Hurd. So much lost productivity in frustration and red tape, all to save a few dimes.
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He is in the board room and not in the trenches doing REAL WORK. He's just an accountant.

Oh, even our employee discounts suck.
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There is no HPWAY. It's over and done.
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