FINAL COMMUNICATION PLAN REPORT

Jack Morgan
Johnny Wilson
Jonathan Quinn
Marianna Martinez
Shujuan Lyu

October 17th, 2017

BCOM 314R: Business Communications, Sec. 003
Professor Marchesseault

Table of Contents
 IBM Final Communication Plan Report BCOM 314R

I. Table of Contents .............pg.

II. Executive Summary............................pg. 2

III. Introduction..................pg. 3

IV. Situation........................pg. 3

V. Background & Analysis..................pg. 3

A. Key Issue..........pg. 3

B. Challenge & Problem..................pg. 4

C. Opportunity......pg. 5

D. Key Stakeholders........pg. 5

VI. Recommendations................pg. 6

A. Justification of Lay Offs........pg. 6

B. Communication of New Opportunities..........pg. 7

C. Repurposing our U.S. Career Webpage................pg.

D. Potential Changes to Enhance our Communication Plan......pg. 8

VII. Response................pg. 8

A. Procurement.pg. 8

B. Projected Budget...............pg. 9

C. ROI.............pg. 10

D. Timeline for Implementation.............pg. 11

VIII. Conclusion...............pg. 11

IX. References............pg. 12

X. Appendices...........pg. 14

Executive Summary

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This report will outline the key issue within IBM that has arisen from the disconnect between
internal and external narratives. The disconnect is derived from how the public perceives us and
how we wish to portray ourselves to the public. Currently, we are seen as a company with a
harsh work environment that lacks empathy for our employees. However, we want to help mend
this poor representation of our culture to let people firmly understand that IBM cares about its
employees. This document will help outline our key issue and our solutions to overcome this
challenge.

Our Stakeholders
Domestic prospective employees, domestic short-term employees, and domestic long-term
employees make up our three biggest stakeholders surrounding this issue. Prospective employees
are classified as those who are actively searching for employment. Short-term Employees
represent those employees who have recently been hired by IBM, but have not yet become
experienced enough to be considered tenured employees. Long-term Employees can best be
described as employees who have been with IBM for a long period of time and are close to the
end of their tenure with IBM. These three selected groups represent the future of our company
and are the key to generating high profits as we continue to grow.

Communication Plan
Our solution to this problem involves improving our transparency with employees when they are
being laid off. By producing a more concise plan that outlines to our employees the reasons for
their layoffs, we can provide sincere explanations when talking with those employees. Providing
our employees a justification for layoffs will help improve our companys image. Another
solution to this issue would be to repurpose our U.S Career Webpage to show the benefits that
we offer to employees. This solution will not only improve our applicant pool by showing the
benefits we offer to our potential applicants, but will also serve to emphasize our company
values.

This communication plan will allow IBM to reduce negative publicity around our employee
turnover rate, fix the disconnect between the internal and external perspectives, and allow IBM
to grow. We strongly urge you to implement this communication plan to help improve our
workplace environment and the morale of our employees. Please reference our response section
for more details on our communication plan and how this will affect IBM in the future.

Introduction
Per request, our team has researched the disconnect between IBMs internal and external
narratives regarding the treatment of its domestic employees. This disconnect is significant as the

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issue is causing a divide within our company pertaining to IBMs strongest asset, its employees.
This information is valuable as it can be utilized to enhance the perception of our company. With
the use of our research and communication plan, we can help improve the morale of IBMs
domestic workforce and potentially increase IBMs revenue. The purpose of this communication
plan report is to outline the causations of the disruption between our message and the perception
of our companys management, and explain how this affects our company and its employees.
Moreover, this report will give you a communication plan that, if enforced, can improve our
domestic employees relationship with the company. We also explain the procurement, costs,
and return on investment associated with this communication plan.

Situation
IBM is currently facing a disconnect between our internal narrative and how the public actually
perceives us, in regards to the treatment of our domestic employees. The internal narrative IBMs
statement that we take care of our employees, so much so that we wish to provide them with a
job for life. However, the external narrative has revealed that many employees feel as though
IBM has a cut-throat workplace environment. This feeling has contributed to a continuous fear
that an employees job is at risk. This disconnect between our message and how the public
perceives us has proven to be particularly damaging, especially when considering that IBM
markets our employees as our most valuable product. In the background and analysis section, we
will further contextualize the narratives themselves, the disconnect between them, and the
resulting effect on our major stakeholders.

Background & Analysis

Key Issue
First of all, our companys key issue stems from IBMs perception of value towards its domestic
stakeholders versus our stakeholders perception as to how they are actually being valued. IBM
sends a message that it takes care of its employees, but the public does not believe we abide by
this message. A shift in the number of employees hired for IBMs domestic offices to global
offices in Bangalore, India, contribute to the disconnect between our company and our
stakeholders. Our company currently employs approximately 130,000 employees in India, which
constitutes for more than a third of our entire workforce. In 2002, IBM reported around 6,000
people were employed in India, far fewer than todays current numbers. Based on this
information, we can deduce that roughly 8,000 employees are being hired per year in Bangalore,
India.

IBM is not only criticized for contracting more foreign employees than domestic employees, but
has also gained a reputation of using waves of layoffs in order to shrink its domestic workforce.
Along with these periodic layoffs, there are also buyout programs in domestics offices. IBM has
turned to reducing the number of layoffs by incorporating voluntary buyout plans. These buyout
programs are considered to be major job-reduction plans in an attempt to downsize the number
of domestic employees. Consequently, this causes the elimination of the older portion of highly
paid employees, whose output can be replaced with new hires in India. The buyouts provide a
type of exchange for the employee's claims of age discrimination. These activities are going
against our internal narrative, ultimately concerning our stakeholders as there is a lack of job

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security. Likewise, this issue is affecting our companys image while costing us financially. In
the next section we will discuss how this issue has proven to be problematic for IBM.

Chart outlining the number of outsourced jobs per company to India:

This chart outlines the percentage of employees being outsourced to India relative to their total
workforce. IBM is the clear leader in this category, where almost 35% of their entire workforce
resides in India.

Challenge and Problem

IBM has run into a challenge due to the publics belief that we do not treat employees as we say
we do. Specifically, IBM promises that we provide a job for life. On the contrary, our
company had an employee turnover number that exceeded over 70,000 in 2015. This has caused
a lack of confidence in our ability to keep our promise. A significant portion of our challenge
arises from IBMs efforts to expand and continually change its business sectors, while
maintaining a positive and supportive workplace for its current and prospective employees. IBM
is continually expanding its business scope, in the last two years alone we have moved 6% of all
our consultant positions aboard. With global business initiatives such as this and our example of
IBM in India, it is difficult to avoid turning over 70,000 employees. On the other hand, this
turnover and its portrayal can be costly, not only in terms of finances, but in terms of
organizational commitment.

Additionally, employee data page Zane Benefits indicates the cost to replace one salary
employee can be upwards of $8,000. These large amounts of turnover have proven to be costly,
for example, when applying the previously estimated cost to replace an employee to IBMs 2015
turnover, the cost would be upwards of $560,000,000. Being that this current quarter is our 22nd
quarter of revenue decline (see Figure 1), employee expenses staggering over $560 million will
undoubtedly affect our profitability. As mentioned above, this turnover is unavoidable if IBM
continues to diversify our workforce and expand into global markets. This turnover can be seen
as an opportunity for expansion or an investment justifying the expense. The absence of
communicating this as an opportunity has proven to be a crucial factor in the publics perception
of our employee treatment.

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To emphasize, turnover is a prevalent issue within our company that is negatively impacting our
corporate culture and job satisfaction. When considering the internal impact of turnover, it is
crucial to consider the social influence model. This model shows that when an employee within
another employee's professional network gets laid off or quits, the employee that is still at the
company is far more likely to leave. In 2015, IBM lost 70,000 employees, meaning 1 in every
100 employees were fired during this year. Consider this amount of turnover in the context of the
social influence model, there is a high chance that the cut of 70,000 employees contributed to far
more unintentional turnover as a result. This model is partially responsible for our stakeholders
continually believing they are at risk of losing their job, a major contingency of our key issue.
With turnover affecting our employees workplace moral, it is important to communicate the
justification of these layoffs.

Opportunity
Notably, IBMs sheer size serves as a huge opportunity to reach a wide audience through a
strong communication plan. According to Forbes, in terms of market capitalization, IBM is the
24th largest company in the world. At a market share of $162.46 billion, it is important to realize
our presence as a catalyst to implement change. Being aware that a communication plan would
not go unnoticed by the public, this inherently adds value to such plan. However, it is just as
important to see this scope as a potential risk, as an inefficient communication plan is likely to be
viewed by a large audience. IBMs market presence will prove crucial when implementing an
effective plan, as mass public exposure will contribute significantly to absolving the external
narrative disconnect IBM faces. We will further discuss how this challenge is affecting our key
stakeholders.

Key Stakeholders
Prospective and Short-term Employees
Two of the most prevalent stakeholders of IBM are prospective employees and short-term
employees. Prospective employees of IBM prove difficult to target because they are not currently
employed by IBM, so there is little information on them available to us. Therefore, they are the
hardest stakeholder to reach. Based on research from Indeed, reviews from both current and
former employees have a heavy influence on prospective employees. Per Glassdoor, there were a
number of reviews about how IBM is known to lay people off without remorse. This damages
the reputation of IBM, a key concern for prospective employees when pursuing a career. We
need to find an effective way to create a transition away from this damaging reputation. If we are
not able to do this, our potential to be sought after by potential employees will decline.

Short-term employees are different in a few ways from prospective employees. This difference
lies in the fact that these employees have been hired by IBM, but are not necessarily considered
to be future employees. According to the Bureau of Labor Statistics, the generation of baby
boomers (those born between 1957-1964) held an average of approximately 12 jobs over the
course of their careers, and 27% of those surveyed had reported having 15 or more jobs. This
statistic is relevant because it highlights the constant career changes that employees seemingly
go through during their respective careers. These short-term employees may become
complainant with their jobs and this may lead to low job satisfaction and poor work quality. If

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we want these short-term employees to become long-term employees with IBM, we should look
towards a rotational program that allows them to work within other areas of the business.

Long-term Employees
Also, another key stakeholder group affected by our key issue are our long-term employees. The
employees are charged with maintaining and controlling the internal environment of the
company. Notably, the relationship that the company should have with these employees is
mutual; they address the employees needs through talent development and sufficient payment,
while the employees also make their contributions through improved input. However, this has
not been the case as the company has been laying off many of these employees.

One of the factors of concern is that IBM has strategically reduced its number of employees by
laying off individuals, mainly from the United States. Although, getting employed by the firm
was once considered as the peak of ones career in the information technology field, this is no
longer true. It is also unfortunate that the firm has enacted retirement offers that require
employees to reduce their working hours by nearly 40% and their salaries by 30% The offer
targets senior employees who are highly paid. If they fail to abide by this offer, they face the risk
of early retirement. Even if the offer appears to be poor, some employees have considered it as a
better alternative to being dismissed.

By presenting the retirement offer above, the company has created a platform for exploitation of
its senior employees. Despite the pay cuts, they are still expected to deliver high performances.
In essence, this procedure is important because the long-term employees share their skills and
knowledge before opting for retirement. The layoff strategy targets the recruitment of cheaper
labor as replacement for the experienced staff. In this sense, the company has developed the
inclination to recruit internationally for the fact that they are willing to work for minimal
compensation. Besides that reason, by continued recruitment of younger and cheaper staff, the
company has managed to increase the level of competition among staff members for positions.
This makes it possible for the staff to easily accept the heavy workload despite a lack of job
security. We will further discuss our recommendations on how overcome this challenge and help
our stakeholders.

Recommendations: Communication Plan

Justification of Lay Offs
IBM needs to better communicate the reasons behind their layoffs and the opportunities that
employees have after being laid off. IBM has been trying to adapt their company towards
cognitive business and away from such departments as hardware and global technology services.
Our company sees this as a necessary move in order to remain one of the most successful
companies in the world. We need to communicate this clearly to our current employees. Layoffs
are bound to happen due to IBMs direction, its a matter of clearly explaining why this is
happening. If IBM is sincere when removing employees from their workplace and being
informative about it, the reputation surrounding the companys work environment is likely to
improve.

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A multitude of studies shown in Organizational Behavior: Improving Performance and

Commitment in the Workplace, has indicated that morale in the workplace is significantly higher
post layoff periods when sincere explanations were given. In the past, IBM has simply given
short and impersonal explanations. In the future, we need to more thoroughly explain why
someone is being laid off and the importance of our direction into cognitive business. Employees
will not feel as though they were cast in the dark if there is clear communication with employees
about the direction of the company and the steps that need to be taken. Also seen in
Organizational Behavior: Improving Performance and Commitment in the Workplace (figure: 2
in the appendices), employees trust in their company has had a strong correlation with high
organizational commitment. Through our message, we need to be open with our employees to
gain their trust and improve overall commitment to our company.

Communication of New Opportunities

Although 70,000 employees left IBM in 2015, we also hired that same amount of employees for
the company. A large portion of those layoffs included employees leaving the company on their
own terms and we need to better communicate this. In addition, a Business Insider article noted
that we currently have more than 25,000 open positions at IBM. We need to exploit these
positions to the employees of departments that will no longer be apart of IBM in the future. In
this case, employees at IBM will have the opportunity to remain with the company by applying
to a different position.

Repurposing our U.S. Career Webpage

As IBM continues the search for quality domestic employees, maintaining a U.S. career webpage
that is not only concise, but emphasizes our desired narrative is imperative. If a potential
employee were to visit our U.S. career webpage, the first thing that would attract their eyes is the
bold heading, What can you do with the power of IBM?. As this is great for emphasizing
IBMs product capabilities, it lacks the ideal that IBM will support its employees. If we want to
actively portray that IBM prioritizes its employees first, we need to affirm the benefits of
working at IBM as the first point of attention. Such points that should be identified are providing
employees with adequate benefits and that we are focused on maintaining high levels of job
satisfaction. Instead of leading with What can you do with the power of IBM?, we should
utilize a more employee-centric statement emphasizing the word you, for example: What can
the power of IBM do for you?. This would prove to be more effective in communicating our
internal value to our employees as they are asked what IBM can do for them.

Another area for growth is the fact that it takes three full-page scrolls on this webpage to get to
the employee benefits portion. Moreover, it is a small portioned box on the left-hand side,
seeming somewhat disregarded. Simply moving this portion of the website to one scroll away,
will help portray that care for our employees is a top priority. It remains pertinent that we
maintain consistency in communicating the value of our employees, repurposing this website is
one crucial component to achieving this.

Potential Changes to Enhance our Communication Plan

A significant reason behind the public viewpoint that IBM doesnt take care of its employees is
because of our weak severance packages. The media have proven to be very critical of the lack
of support from our severance packages. As reported by Business Insider, this criticism stems

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from the fact that we grant one month severance to any employee, whether they were employed
for one month or ten years. If no funds are available to enhance said severance packages, we
need to communicate the availability of severance to any employee. This will be particularly
effective in the recruitment efforts of our potential stakeholders.

It would be ideal to give more severance pay to those who have held a position at IBM for a long
period of time. Upon doing this, IBM would be considered as more of an empathetic company
and not as brutal as the media makes us out to be. The message that our company cares for its
long term employees will be hard to spread if we do not improve our severance packages.
However, if we are not able to allocate resources to improved severance packages, we plan to
communicate our one month severance package to only our potential employees.

Moreover, we should implement a program to help current employees transfer their talents over
to another department. We lay off a lot of employees based on a change in IBMs company
direction rendering their respective department obsolete. For those valuable employees, we
should train them to attain cross-departmental skills, allowing IBM to relocate these employees
to one of growing departments instead of letting them go. Through the retainment of these
employees, we could could communicate a higher degree of care for our employees.

Response
Procurement
1) IBM releases an employee centric communications report, December 31st of each year.
This report will elaborate on the direction of the company, including which departments
will receive the most resources, and departments that will see a decline in allocated
resources. These reports will also outline how many layoffs and hires are expected for
each department and location. This report will give a thorough explanation of the
direction we are going so that no employee feels like they werent informed. This will
enable us to have greater transparency within the company.
2) IBM delivers training to its managers to be able to lay off their employees
empathetically. Many of our managers have not been asked to personally lay off their
employees, meaning this step will be crucial to execute our communication plan. Every
employee that is let go will receive a sincere and reasonable explanation for why IBM no
longer needs them. If we do not train our employees we can hire a human resources firm
for termination assistance.
3) In case of potential layoffs, managers will be informed of the job opening in other
departments and expected to communicate these opening to their employees. Employees
will most likely recognize the fact that they may be let go soon but will have the
opportunity to apply for a position in advance.
4) We will allocate a portion of our R&D budget, currently $1.12 billion, to repurpose our
U.S. Career Webpage. Altering our main point of focus from What can you do with the
power of IBM?, to a more employee-centric statement ,What can the power of IBM do
for you?, as well as moving our employee benefit portion of the webpage reachable
within one scroll, will effectively communicate emphasized employee value. These
efforts will enhance public perception by alternate means of communication.

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5) Allocate a portion of our budget to go towards stronger severance packages. If this is

enacted, we can then create publicity surrounding our actions to improve severance
packages.
6) Implement training programs for 500 employees to move to more prosperous
departments and stay with the company.

Projected Budget
Implementing the severance packages proposed above will serve as a major expense in our
budget. For employees of 10 or more years, we were planning on adding a week of pay for every
additional two years worked after 10 years. The conditional cost we are expecting per year would
increase the commitment to our employees grows.

In order to maintain a strong reputation of the company and keep valuable employees in IBM,
we are planning to launch training programs for current top talent employees in underperforming
departments. After severance packages, conducting the training program would be the single
biggest cost for company under this communication plan, since we would train our employees in
full-scale dimensions through various training methods. This is to ensure that we get high
performances from these employees when they are transferred to another growing department,
such as cognitive business. The training would involve team training, computer-based training,
department specific training, and simulations to develop their behavioral and cognitive skills.
These training sessions would facilitate the process of adapting to the working conditions in the
new department. Additionally, this is an essential phase in the process of training current
valuable employees because it would reduce the costs of recruiting, selecting, and training the
new employees.

Chart outlining Marketable Securities from this past fiscal year:

This pie chart using data from Mergent Online Database shows how much money we had in
Marketable Securities during the 2016 fiscal year. From this dollar value, we wish to use a mere
3% of these securities to help fund the repurposing of our career webpage. For the rest of our
expenditures, we plan to take a portion of the budget from our R & D expenditures.

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ROI
From the proposed budget and specific recommendations above, we expect to see several direct
returns on our investment. The first return on investment would be a greater reputation regarding
the treatment of our employees. With this prestige, we will be able to shrink the disconnect
between our internal and external narratives. As a result, potential employees will be more
inclined to apply for a job at IBM. This would be due to the fact that the public would be more
aware of what we are doing to take care of our employees. On a similar note, repurposing our
website to emphasize what IBM can and will do for employees will increase the amount of
qualified potential employee applications. Additionally, we anticipate there will be benefits to
reducing the negative connotation of IBMs high turnover rate. The public and our employee will
be more aware of the justification behind our actions. This will further enhance our reputation
and reduce the negative impacts of the social influence model. In like manner, the improvement
of severance packages and transitional department training will further support our message that
we care deeply for our employees. Likewise, these developments will help cater to an overall
positive shift in job satisfaction and organizational commitment.

Timeline for Implementation

Conclusion
IBMs key issue dealt with the conflicting views of our internal and external narratives between
our company and our key stakeholder groups. The key issue is the disconnect found between
IBMs perception of value towards its domestic stakeholders versus our stakeholder's perception
regarding how they are actually being valued within our company. The major challenge and
problem we are facing revolves around the negative image the public has of our company. High

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rates of unavoidable turnover and the negative connotation that comes with that, contributes to
the public belief IBM does not treat its employees the way we have promised to do so, more
specifically guaranteeing them a job for life.

Our key stakeholders are divided into three major groups, our prospective employees, our short-
term employees and our long-term employees. As our stakeholders have growing concerns
about job security, implementing our recommendations and delivering a more detailed
communication plan for our stakeholders, will be valuable in reducing such concerns. Not only
this but the communication plan purposed will enhance our companys public image and provide
a better corporate culture within our company.

Based on our analysis, we suggest moving forward to implement our recommendations to

eliminate the disconnect between our internal and external narratives and to resolve the
conflicting views of our stakeholders. If you have any questions or would like further
information on this report, please feel free to contact our research team leader Johnny Wilson at
johnny27wilson@email.arizona.edu.

References
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Many, Too. Business
Insider. Retrieved from
http://www.businessinsider.com/ibm-added-and-lost-70000-people-2016-2

Bort, J. (2012, March 19). IBM Increases U.S. Layoffs: 1,790 Jobs Cut In 2012 So Far, Group
Says. Business
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group-says-2012-3
?IR=T#ixzz1sPq34KrD

Colquitt, J., LePine, J. A., & Wesson, M. J. (2017). Organizational behavior: Improving
Performance and
Commitment in the Workplace (5th ed.). New York: McGraw-Hill Education.

Dividend Channel. (2014, November 14). International Business Machines Now #24 Largest
Company, Surpassing
Citigroup. Forbes. Retrieved from

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https://www.forbes.com/sites/dividendchannel/2014/11/14/international-business-
machines-now-24-largest-company-surpassing-citigroup/#288ad1657380

Dunn, J. (2017, July 19). Its Now Been 21 Straight Quarters of Declining Revenue for Tech
Giant IBM. Business
Insider. Retrieved from
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decline-chart-2017-7

Glassdoor Inc. (2017, October 11). IBM Reviews. Retrieved October 11, 2017, from
https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm

Glassdoor Inc. (2017, October 11). IBM Reviews. Retrieved October 11, 2017, from
https://www.glassdoor.com/Reviews/Employee-Review-IBM-RVW159807.htm

Goel,V. (2017, September 28). IBM Now Has More Employees in India than in the U.S. New
York Times. Retrieved from
https://www.nytimes.com/2017/09/28/technology/ibm-india.html

Goel,V. (2017, October 8). IBM Shifts Center of Gravity Half a World Away, To India. Seattle
Times. Retrieved from
https://www.seattletimes.com/business/ibm-shifts-center-of-gravity-half-a-world-away-
to-india/

IBM Research and Development Expense (Quarterly):. (n.d.). Retrieved October 14, 2017, from
https://ycharts.com/companies/IBM/r_and_d_expense

Indeed Inc. (2017). IBM. Retrieved October 11, 2017, from

https://www.indeed.com/cmp/IBM/reviews

Mergent Online Database. (2017, October 15). Annual Reported Balance Sheet. Retrieved from
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mpnumber=4427

Merhar, C. (2016, February 4). Employee Retention - The Real Cost of Losing an Employee.
Zane Benefits. Retrieved from
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losing-an-employee

(n.d.). Retrieved October 14, 2017, from https://www.sec.gov/cgi-

bin/viewer?action=view&cik=51143&accession_number=0001047469-17-
001061&xbrl_type=v#

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Ohnesorge, L. (2013, August). How IBM May Have Lost a $170M Contract Because of
Turnover. Triangle Business
Journal. Retrieved from
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contract.html

U.S. Bureau of Labor Statistics. (2017, May 12). NLS FAQs. Retrieved October 11, 2017, from
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Appendices

Figure 1: Current Revenue Declination

Figure 2: The Effects of Trust on Job Performance and Commitment

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