Mip Factor Announced

[jeepguy63]

This is tough to swallow. The MIP was changed from a profit sharing plan to a performance plan last year. The parameters layed out are fairly clear and distinct...but the weighting of each is purposely vague.
The management committee continues to whack away at the "partnership" and the trust factor. They want the trust factor in all who bleed brown to be there when the going gets tough in the fox hole...but on all other fronts (benefits, starting pay, MIP, Pension, retirement age, etc, etc) they want UPS to look like any other company.
If they keep at it for the next several year....they'll get what they are trying to accomplish..... A large conglomerate (like GE) that has employees who move in and move out, have no length of service, and could care-a-less about the organization as long as they get their monthy checks.
Without the partnership and the hard work of the front line hourly and management....this company (under the current business model) is doomed to fail under the weight of its hourly wage rates and benefits rates.
The mangement committee is being told by many different groups only what they want to hear......Well by God....the emperor has no clothes....Get the hell out of Atlanta and talk to employees who don't know who you are so you can be told the truth. Turn the dang corporate filters off so that you can be told this is a stinky, hot, pile of crap....not that this is a "correct dosage of aromatic fertilizer."

If readers of this board have not already sold.....you better be hedged. We'll be lucky if the stock price is over $80 three years from now!

 

[UPSer in Florida]

MIP stands for management insentive program.
Since last year when UPS mentioned they were going to change the program and that the board of directors was going announce the MIP factor. I new then we were in trouble. How can a company make record profits in 2006 and state that we are not doing well and give us an MIP factor of 1.6. It's proves one thing for certian, the people in Atlanta don't know what they are doing. The stock took a hit a few months ago but it has since rebounded. It seems every little even is followed by UPS over reacting and causing more problems. Setting the MIP to 1.6 will only cause more harm then anything else. Are you as a UPS partner motivated after a 1.6 announcement? Maybe motivated to find another job....

This really doesn't make sense. A big increase in profits and a big decrease in MIP. The 15% of net profit was easy to understand. Now the factor is hidden and is difficult to understand on how it's determined. How do they decide the factor? What is the business rule they use? Make 6 elements and its a 3? Four and its a 2.4? Roll some dice?

Like someone said in another post, this will do much more harm than good. Short term thinking will give you bad long term results.

You really have to question on how this will change managment's thinking and expectations? Especially the supervisors working 12-15 hour days? They just took a pay cut of about $6k+ more. Or what about our young managers? Who will want to work these insane hours and be at the beckon call to make whatever service happen? In the end they will not be motivated to. UPS was all about each person wanting to make it happen for our customers every single day. For those who have been here for a while do you think that has changed?

If this continues, this will start to change the managment culture in a a bad way because at the end of the day, it will be the WIFM. The problem is the culture is in of need change but not this kind. MIP had a small but positive motivational impact on our managment team.

Why doesn't the organization really address the issue of upper mid-level management and higher not performing? Or move to a true meritocracy for bonuses and pay? You have too many people at this level making excuses instead of executing.

The partnership is one of the strongest pillars of the organization and they consistenty have been hammering that for the last several years. You can try to putty up the chipping but it won't be the same. It's a huge mistake that sends a wrong message to the entire organization.

The other question is why in the first place did they feel they needed to do this? That's the question everyone should be asking? Why? What is the short term gain and why? Why was this so necessary at this time? With everything supposedly looking good, why would the organization do this? It doesn't make sense does it? The six element reason is no reason or excuse for this and this is the question every one needs to be asking over and over. What is it they know that you do not know that forced them to make this change?

What will happen next year at this time? Does MIP go back to a 2.5? But then you'd see a significant large payroll and operating charge. Would that not affect the earnings per share negatively? So would the organization raise it back to the 2.5 level knowing it would have an adverse eps impact that Wall Street so dearly loves? I think not. I think you have just seen your new MIP base. Although I do remember in the mid 90's when it was around 1.

How many will leave because of this (maybe this was their intent). The best and brightest will be the first to think about it. The young ones will be the first to act on it. In the end in a few years if this continues, you will have dead wood in the management drifting all over the place. And it's pretty bad now with that from districts to the region to the managment committee.

 

[ups79]

Looks like this thread brought out a lot of the "lookers". Could all of these posters actually be management? Should we as employees actually care what the mip factor is? Will management get worst because of this?

 

[CTOTH]

Looks like this thread brought out a lot of the "lookers". Could all of these posters actually be management? Should we as employees actually care what the mip factor is? Will management get worst because of this?

If they end up quitting then I can only see things getting better. no management = smooth operations and good customer service.

 

[Thebrowntruth]

The rich get richer (17% raise in corp) and the poor get poorer (less MIP, increase in benefits cost). Thanks for the strong leadership Atlanta. You guys rock....or have brains made there of....

 

[brownISer]

UPS79---isn't this a place for ALL UPSers??? Not just non-management??? ....we DO care about the MIP!! And I sure do hope things don't get WORST---

 

[Cezanne]

These actions and rumors going about management's compensation can only provide information to the concerned employee about how the company is cutting cost to look good on wall street. Bottom line is the partner concept that most management has been brought up with is a thing of the past, or lip service at it's best. Upper management wants results so you lower types are expendable, expect more cuts in certain levels of management as far as pension, health and welfare and stock options. Wall street loves when companies put dedicated employees on the street to save costs, why should management be exempt from this kind of corporate thinking. The whole Jim Casey attitude about loyality and dedication is considered dated by most corporations in today's dog eat dog market place. Maybe corporate UPS has bought into this kind of thinking, beside with contract talks going on and the concentration on the pension and health and welfare issues with the union employees are they providing a more level playing field between the compensation of it's employees union and non-union. Afterall you have to admit that over the years management has enjoyed most of the perks with company service compared with their union counterparts.

Can see the resentment that the younger manager and supervision workforce might have to their older and much more compensated partners. The prospect of the younger management employee ever obtaining the same perks with their years of service as their current bosses are dwindling. The discovery of how to use the part time supervisor positions and the non union OMS workforce who are in the short term and long term alot cheaper to maintain than the full time management employee might be coming into play here. What could be happening also is that everybody in management is scared of losing their positions and are starting to make decisions that justify their worth to the company, one big pecking order.

Best of luck to our non union workforce

 

[Mipped Off]

The rich get richer (17% raise in corp) and the poor get poorer (less MIP, increase in benefits cost). Thanks for the strong leadership Atlanta. You guys rock....or have brains made there of....

17% Raise in Corp????? Where do you get your facts?

I was shocked to hear the MIP announcement. I'm in agreement that things seem a little off when we announce the earnings we did and than cut back on incentives to employees. The big question we had was how are the elements weighted. As someone else mentioned, it doesn't seem like there's an answer for that. In my opinion, it's a way of making cut backs and padding the bottom line to make UPS look better to Wall Street while making the employees feel like it's our fault because we failed to reach these "elements".

There is a big push to bring in new, younger employees right out of college to "rejuvenate" and one day run some departments in IS. I know three that have already left because of the demanding hours, high expectations and low pay. The MIP has been an incentive that has kept many people here. Last years changes were hard to swallow (holding back 50% of your award) but at least you would eventually get it, so it became tolerable. Arbitrarily deciding that it's time to cut into award with no clear explanation other than "we didn't meet the elements" is not going to cut it.

Anybody that works in IS knows that you can make more money at most other companies but UPS has always had the angle on job security, benefits and long term financial comfort. Well now there's layoffs, consolidations, higher costs for benefits and obviously the financial outlook has become cloudy at best.

How can they recruit the best employees if all they'll be able to offer is average pay and benefits? I've got about 10 years under my belt here and have begun researching opportunities elsewhere. I've always said it's a great company and proud to say I'm a UPSer. I expected to be here until I got the gold watch on my 20th anniversary along with the nice plaque. By time I get to my 20th year, I bet the watch has been changed to a firm handshake and the plaque changed to an e-mail that you have to print out at home to conserve money on paper.

 

[YEEES]

i see alot of crying. does anyone bother reading the MIP elements & how they weren't met?? obviously increase in profit yes, does anyone think to read operating costs, etc?? suck it up!!

 

[oldpaddy]

My deepest apologies if this sounds the slightest bit insincere...
HAHAHAHAHAHAHAHAAAAHAHAHAHAA

 

[ups79]

brownisher-let me quote you, "some folks that post to this site are just not happy working at UPS, but they won't leave for some reason."

 

[Anonymous Supervisor]

Just remember that we didn't meet three of the six elements this year. Though they are not weighted, it appears that the three that we missed did have a great impact on MIP. In addition, when they made the change last year, we made 5 out of six elements. Start looking at the five elements for 2007 and get out there and get the volume. Maybe our profit margin will be better than 9.8%

OMFG! I presume this is Mike Eskew posting? I knew this was coming when they announced the '6 factors' oh BTW, the way they are measured is confidential so that you just have to take our word for it. They are going to tell us its our own fault, however, many of the 'measures' are so strategic, me as a crappy little Dispatch Supervisor, oh yeah, I'm going to go integrate the crap out of some aquisitions today! It is BS, and I for one will let my feet do the talking. This is the third year in row, I've worked more hours and gotten paid less. As a FT supervisor with 8 years, assumeing that I work 10 hours a day (which is on the low side) and have 3 weeks of vacation, and don't qualify for overtime. I make 26 dollars an hour GROSS! Our average driver wage is SIGNIFICANTLY higher than that.

Ahhh...I feel much better having vented, I still am looking for a new job though.

 

[CTOTH]

i see alot of crying. does anyone bother reading the MIP elements & how they weren't met?? obviously increase in profit yes, does anyone think to read operating costs, etc?? suck it up!!

Profit = Revenue - Operating Costs
Accounting 101

 

[YEEEESS]

Profit = Revenue - Operating Costs
Accounting 101

operating costs, ETC = salaries & whatever else is paid out duh. look @ all the extra costs we had in '06 with aquiring companies & the gigantic loss of SCS.

 

[rngri4]

OMFG! I presume this is Mike Eskew posting? I knew this was coming when they announced the '6 factors' oh BTW, the way they are measured is confidential so that you just have to take our word for it. They are going to tell us its our own fault, however, many of the 'measures' are so strategic, me as a crappy little Dispatch Supervisor, oh yeah, I'm going to go integrate the crap out of some aquisitions today! It is BS, and I for one will let my feet do the talking. This is the third year in row, I've worked more hours and gotten paid less. As a FT supervisor with 8 years, assumeing that I work 10 hours a day (which is on the low side) and have 3 weeks of vacation, and don't qualify for overtime. I make 26 dollars an hour GROSS! Our average driver wage is SIGNIFICANTLY higher than that.

Ahhh...I feel much better having vented, I still am looking for a new job though.

Ok you and I share the same job, so I am figuring, your 26 dollars an hour you say...are you dividing that by the time you work, or the eight hours you get paid for? That is a good salary, good luck finding another job, because I for one wont complain about MIP, and I have a feeling you had little time with the company before you were promoted. I make a signifigant larger amount than you for the same job....go find a new one, and when you find one that pays the same amount, and gives you the few thousand in stock every year....let us know.

 

[rngri4]

OMFG! I presume this is Mike Eskew posting? I knew this was coming when they announced the '6 factors' oh BTW, the way they are measured is confidential so that you just have to take our word for it. They are going to tell us its our own fault, however, many of the 'measures' are so strategic, me as a crappy little Dispatch Supervisor, oh yeah, I'm going to go integrate the crap out of some aquisitions today! It is BS, and I for one will let my feet do the talking. This is the third year in row, I've worked more hours and gotten paid less. As a FT supervisor with 8 years, assumeing that I work 10 hours a day (which is on the low side) and have 3 weeks of vacation, and don't qualify for overtime. I make 26 dollars an hour GROSS! Our average driver wage is SIGNIFICANTLY higher than that.

Ahhh...I feel much better having vented, I still am looking for a new job though.

And no....in most areas of the country....driver top pay is not higher than 26 an hour....let me ask are you a supervisor or a specialist?

 

[bmdoubleu]

Yes it is Managment Incentive Program

 

[nhguy]

Mr. Florida UPSER, You speak a lot of truths in what you say. The change to the whole RSU'S was nothing more than a way for the company to hold onto 50% of your incentive and give it back to you over a five year period. When you look at the MIP change, the continuing cost of health care, the pay raises , there is a loud and clear picture here. I could be completely off base, but it is my feeling that once again management is paying for the new pilots contract, the mechanics contract which is currently being negotiated, the upcoming new teamster contract. It's the only place they can get away with giving less. I also believe it is all part of our miserable record in dealing with wall street. We can't cut our cost anywhere else, so who's left? The guys with the ties. This is truly discouraging to all UPS management. The new elements are not quantifably measurable, with the old system it was very plain to see, 15% of pretax profits. It's really ashame, there are 370,000 hard working employees who bust their tail everyday and yet a handful who sit in the Ivory Tower who are losing touch daily make all the decisions that affect us all! I'm glad my time is getting short, although the pension and age are probably the next to be cut! Frustrated and Disappointed!

 

[bigdog]

Rumor has it there is a big meeting in the corporate office on Wednesday and Thursday. Expect aa annoucement to the non-union pension plan this week. With a 1.6 factor and a pension change announcement, you can expect friday's price set for the MIP to be high (which will mean even less shares awarded).

We should all be worried if we start losing alot of management talent. We all have to admit there are some good management who get the job done and treat employees fairly. If we lose enough talent we can lose customers and the ball starts rolling downhill from there.

 

[WetFeetGal]

Three questions for the board:

1. Could the the outstanding profit increase be directly related to the slash in MIP? UPS beat the analyst's estimates by raiding the MIP slush fund. If this is the case, the pattern will repeat whenever convenient for the board to beat estimates.

2. Why has corporate neglected to officially announce the MIP factor? The 1.6 factor could be a rumor.

3. How does one stay motivated if benefit costs are shifted to the employee's shoulders and the financial piece continues to dwindle?