2020 Salary Adjustment Announcement
Boeing’s announcement of the 2020 Salary Adjustment Funds is a new low for Company leadership currently mired in a series of scandals of their own making. Under the terms of your collective bargaining agreement, you are entitled to a 5% lump sum payment PLUS any additional raise pools the Company decides to supplement that with. The raise fund amounts announced by the Company today were contrived by management, so no individual is guaranteed to receive anything beyond the artificially reduced lump sum. You deserve better than this from your Company leadership.
The annual salary exercise for SPEEA-represented Professional and Technical employees has two components.
The first component is the three performance evaluations required to be performed in the beginning, middle and end of the calendar year. The initial Performance Management (PM) meeting is to set goals and expectations for the upcoming year. The Interim PM is for the employee to receive guidance from their manager on what they are doing well and where they need to improve. The final Closeout PM is where the manager evaluates the year’s performance of each individual receiving a score. The Performance Management scores coupled with an individual’s compa-ratio initially determine what percentage of the Salary Adjustment Fund each employee is entitled to receive as a base-salary increase.
The second component of the salary exercise is the size of the Salary Adjustment Fund itself. The concept here is to make sure SPEEA-represented employees are always paid at a premium to the comparable market for their skills. The comparable market rate is determined for each job code using the Boeing, along with 200+ other high-tech companies across the nation representing more than 780,000 employees submit salary data to Mercer each spring. Mercer aggregates the data and produces the US Mercer SIRS® – High Technology Benchmark Survey each fall.
After receiving numerous complaints from members about problems with their PMs, SPEEA began an audit of the 2019 Performance Management results. This audit was hampered by Boeing management’s inability/unwillingness to provide a complete data set for SPEEA’s review. What we were able to discern shows a wholesale failure of Boeing leadership to competently conduct the 2019 Performance Management process. Based upon data the Company did provide SPEEA, at least 10% of our members never received their Interim PM.
Using focus group sampling, we documented multiple examples of employees who never received ANY of the three required Performance Management sessions. It’s unclear how large this group is but it appears to be 5-10% of SPEEA members. Additionally, our sampling indicates that at least 30% of SPEEA members had a defective Performance Management process. Examples of defective PMs include having the Define, Interim and Closeout all performed ON THE SAME DAY for certain employees. Other employees had Interim and Final PMs performed in December. These defects completely undermine the point of Performance Management.
You cannot have a fair performance-based compensation system when there was no actual or meaningful measurement of performance.
Boeing receives the US Mercer SIRS® – High Technology Benchmark Survey each fall and invites SPEEA staff to audit Boeing’s calculations. For the first 3 years, SPEEA was able to audit Boeing’s math used to determine the “market reference” and independently verify SPEEA salaries used for market comparison. To date, Boeing did not make a mathematical error and we were able to validate the SPEEA salaries used by Boeing.
This year, however, Boeing provided SPEEA more data than it had in previous years. This additional data made it obvious that Boeing was using a proprietary subset of the US Mercer SIRS® – High Technology Benchmark Survey, rather than the entire Survey. Many represented individuals suspected prior years’ data had been manipulated to arrive at a predetermined result, but SPEEA now has indisputable proof the company engaged in misconduct. Boeing’s use of a proprietary subset of the Survey is a direct violation of the SPEEA Side Letter, which documents precisely which Mercer SIRS dataset to use and exactly how to use it. The entire US High Technology Benchmark Survey should include employees from all companies, including Boeing.
If Boeing correctly used the entire US Mercer SIRS® – High Technology Benchmark Survey, it would be impossible to have more individuals in any matched SPEEA job codes than the entire national High-Tech Market. To this day, Boeing refuses to tell SPEEA if the US Mercer SIRS® – High Technology Benchmark Survey is manipulated by Boeing to create the proprietary subset or if the proprietary subset is created by Mercer at Boeing’s request. SPEEA has additional concerns about significant variations in participation from year to year and seemingly unexplainable decreases in average market salaries for a significant number of job codes. These changes may be attributed to the SPEEA vs. Market job matching process. SPEEA officially requested the job-matching/mapping criterion from SPEEA job codes to the publicly available Mercer SIRS job codes. Unfortunately, Boeing refuses to provide this information.
The full impact this data manipulation had is not clear. But Boeing’s stonewalling creates the reasonable inference that Chicago artificially suppressed the size of the Salary Adjustment Funds, likely for every year since we adopted this system.
In a related matter, SPEEA caught Boeing skimming promotional funds from previous Tech Salary Adjustment Funds. The Company then distributed the skimmed funds to interns. Boeing already admitted to this misconduct and pledged to refund the money by increasing the Tech bargaining unit raise pool during the 2020 raise exercise. Yet, there is no mention of that in today’s announcement.
SPEEA approached Boeing leadership on a number of occasions with a wide variety of proposals for how to resolve the impending crisis of a 2020 raise exercise based upon a profoundly defective Performance Management process and a market reference dataset with which SPEEA subject matter experts had lost confidence. Boeing leadership rejected every SPEEA proposal.
Four years ago, SPEEA embarked upon an experiment. We attempted a different relationship with Boeing leaders. We negotiated a collective bargaining agreement that on key provisions relied upon the company to act in good faith. We patiently worked problems rather than immediately resorting to litigation. The promise of this new approach was that Boeing would reciprocate. Instead of expending resources fighting SPEEA and our members, Boeing would redeploy those resources for the betterment of our membership. Instead of constantly acting in CYA mode, Boeing would collaboratively problem solve issues in a data-rich environment.
That experiment appears to be over.
On this, David Calhoun’s first day as Boeing’s new CEO, we have yet another self-inflicted crisis embroiling the Company. Today’s message announcing the purported 2020 Salary Adjustment Funds is a stunningly cynical act by Boeing leaders focused upon image over substance, covering up mistakes rather than correcting them, bulldozing over stakeholders rather than respecting them. This confluence of bad data and bad process has now been joined by bad faith.
Litigation will resolve this, but it doesn’t have to be this way.
Today is Mr. Calhoun’s first test as CEO. We all received his message this morning pledging to roll up his sleeves and get the Company back on track. If Company leadership wishes to regain the confidence of their own employees, let alone customers, regulators and the flying public, it’s time to clean house of the executives responsible for this mess. Moreover, we call upon Boeing to place the raw, unmanipulated US Mercer SIRS® – High Technology Benchmark Survey data for the past four years on a Company server where SPEEA members can access it and review the data for themselves.
The Company cannot keep lurching from self-inflicted crisis to self-inflicted crisis, papering over problems with falsified data and spinning increasingly improbable public relations fantasies. It wasn’t that long ago when The Boeing Company was one of the most respected and admired in the world. Employees were proud to say they worked at Boeing. Customers had confidence in company leaders. The flying public had confidence in our products, helping popularize the phrase: “If it ain’t Boeing, I’m not going.”
We have the opportunity to restore the Company to its rightful position. The open question is whether Company leaders have the will to do so? Are Boeing’s Core Values – including its promise of transparency – window dressing for corporate reports or a value system the Company holds itself accountable to? That is Mr. Calhoun’s question to answer.