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Enron Mail |
Steve the comment compilation is a laundry list. I think that some of them= are completely out of sync and unjustified but others are real and many re= peat themselves. Many of the comments are with respect to salary. There i= s also the theory that only the unhappy or bitter or unsuccessful take the = time to answer. The happy ones might just have passed on this one. =20 I hope you find them relevant and/or useful. =20 I was told that William Lemons of the associate program saw this list a cou= ple of months ago and reacted positively. A raise is being studied for cur= rent associates and the offers were higher for this year ?s summer associat= es. Best, Ricardo -----Original Message----- From: =09Balmaceda, Andres =20 Sent:=09Friday, August 17, 2001 3:06 PM To:=09Charvel, Ricardo Subject:=09FW: Comments Compilation The comments are below. They are also in the attached word document below.= Thank you to the people who took the time and energy to step up and respo= nd. We had a high response rate. =20 Everyone is not going to agree with all the comments but Billy is going to = get them exactly the way they were written. The note is long - consider pr= inting it. =20 Vikas =20 Comments from MBA Class 2000 1.=09We need to reconcile the difference between ENE's salaries vs competit= ors' and other Houston companies. 2.=09We need better guidance in the rotation selection (I've seen lot of go= od people being screwed because choosing a bad area to work due to lack of = information). 3.=09Regardless of whether you like your rotation or not, the Program itsel= f is staffed in a very amateur manner. There are a few really good people = but for the most part it is just not professionally run. Calls unanswered,= lots of passing the buck, and general disorganization. 4.=09If they have resources, they do a poor job of communicating them. Whi= le we do have a responsibility to find info ourselves, there should be an a= ctive effort to point us to those resources. 5.=09Compensation. The bonus part is certainly not communicated as being l= ocked into a fixed range and independent of business unit performance. At = the very least, this is a serious oversight. =20 6.=09PRC. Really doesn't work. Not an apple to apples comparison. Heavil= y dependent on when/where you rotated. 7.=09I could care less about Enron's reputation. I tried paying my student= loans with "reputation" but they only accepted cash. How much money can I= make at this place assuming the stock price doesn't double every few month= s, in effect preventing Enron from getting the public equity markets to pay= my compensation? =20 8.=09Also there has been a significant change on the acceptable cut in term= s of the PRC, where before Enron was penalizing the "have issues" classific= ation of the PRC, now it feels like they are trying to get rid of 20% of th= e pool. Reinforcing the first paragraph. 9.=09Offer of salary is cloaked and we don't know where we can end up. 10.=09I believe there is a big disconnect between recruiting team and the h= ead office. As a result, the sales pitch given to recruits leads to false e= xpectations. And obviously when those expectations are not met, we all know= the consequences. 11.=09The rest of the downtown Houston Energy concerns are paying much high= er base 12.=09Can we have a list of companies we benchmark compensation against? I= s it really Wall Street and consulting? If so, I'd like to see the names o= f the firms. New York is not that expensive that the "well they're in New = York" excuse covers all discrepancies. It feels like we must be benchmarki= ng against second or third tier MBA recruiters. 13.=09There's a feeling among the Associate pool that you need to be in a s= ecure, established, money making division in order to guarantee a average o= r above PRC for the end of the year and therefore not be in the two bottom = brackets and not be fired. That goes against the long- term reputation of = Enron as a company where you are rewarded for taking risks.=20 14.=09Attempting to get into rotation and expect competition from others ro= tating but do not expect to get displaced by a 1st rotation associate that = is placed by the AA pool. 15.=09Assignment of 1st rotation was chosen for me and the job function was= more of an analyst function than it was an associate function. Why can't = alumni from your school help to find a rotation to match the desires of the= in coming candidate? 16.=09Manage expectations...don't need to hear about 26 year old trader and= Louise Kitchen's rise to fame with Enron Online...creates an expectation t= hat those are more common occurrences than they really are. 17.=09It doesn't feel like there's a lot to do in all areas, nonetheless so= mething between 60 and 100 new associates coming in these fall: First, why = that many? Second, do they know what they are getting into? 18.=09The main issues have to do with compensation being well below market = - we have always been assured that the bonus and options more than made up = for the disparity, but given the declining stock value, lack of meaningful = rotations and decrease in the overall level of satisfaction with the progra= m this is becoming a much bigger issue. 19.=09Enron is so secretive about salaries that Associates have no idea wha= t the upside looks like. Working for beans in year 1 is ok if years 2-5 ar= e excellent. We really have no idea what to expect for salary or bonus aft= er the program is over. 20.=09Salary well below market (base salary and value of options/bonus) - e= ven if they bring us up to the 2001 offers (which are rumored to be under m= arket), we have 1 year or more experience with the class coming in and will= be paid the same amount? 21.=09Lack of quality rotations (cuts in EBS, EES, ect...) 22.=09Level of responsibility is well below expectations/maturity level 23.=09Compensation for Associates is at the bottom of the pay scale for Top= B-Schools. Not only in comparison to IB and Consulting, but also compared= to specialties (brand management, etc.) that are at the lower end of the M= BA scale. It is cheaper to live in Houston but our student loans are not i= ndexed by location. Other energy companies here in town even pay more. =20 24.=09The Enron contract is designed to retain employees with sticks and no= t carrots. There is no other company I know that expects full repayment of= a signing bonus 18 months after the start date. If the Program is truly s= pecial people should not be forced to repay anything-Enron should deliver w= hat they advertise and people will stay. The 18-month lock up period sugge= sts a concern with retention that is being met with a penalty to the Associ= ate and not an improvement in the Program.=20 25.=09How much do managers make assuming certain business and individual pe= rformance levels? I've got no clue but I'm wondering why it such a big sec= ret?=20 26.=09The PRC process does not encourage people to experiment in their rota= tions as Enron implies. For example, if you take a rotation in an area you= know nothing about, you will lose in the PRC because you are still learnin= g the job. Similarly, if you were a trader and go to a trading rotation, y= ou will be rewarded a PRC time. 27.=09There are too many associates and too few analysts. Too many associ= ate rotations become exercises in finding something to do. Too often, asso= ciates think to themselves, I remember doing this several years ago as an u= ndergrad, why am I doing this again. 28.=09They should present the program for what it is -an internal labor poo= l where Associates find their own rotations depending on what is available = and who they know. The Program does not match people with jobs and should = make it clear that you will be interviewing for jobs, etc upon entry into t= he program. This is not because they want Associates to have choice, but r= ather because they have no proven record of placing people in the rotations= . =20 29.=09If we are not going to be competitive with Wall Street and consulting= , we should at least be competitive with our energy competitors. I don't k= now what companies we are benchmarking against but I guarantee we are not k= eeping up. Small differences can create a lot animosity towards the progra= m. When a person who didn't get into Enron but got into a competitor makes= materially more money from the start, people start believing they have jus= t been sold a lot of hype. 30.=09Not enough development during rotations - even associates who end up = learning a lot don't necessarily enjoy their rotations because they don't f= eel part of the team 31.=09Not getting to pick your rotations or at least interview for your fir= st rotation is a moral buster as well. Additionally, it can waste a lot of= time in the case that someone is forced into a group or position they have= no interest in. 32.=09Compensation - many gave up lucrative offers elsewhere for a lower ba= se and bonus package from Enron because the stock price movement promised l= arge equity based compensation. Also, it was very difficult to find out wh= at full first year bonuses were during the recruiting process. Most wrongl= y believed that this indicated that the bonuses were competitive versus oth= er leading MBA avenues. How much money do people at Enron make assuming th= e stock price performs1. Great 2. Okay, 3. Poor? =20 33.=09Responsibility - when you are getting recruited you always here the L= ouise Kitchen, John Arnold, and Greg Whalley examples as if that is normal.= We need to stop doing that. Enron's slowing growth rate and failure in e= verything outside of gas and power trading will super fast promotions as we= look more and more like a large corporation. =20 34.=09The program is designed to bring in too many associates and then let = them compete with each other until the weaker associates are driven out. I= f this is true, why not spend more time and money recruiting and bring in f= ewer, higher quality associates from the start - the process of weeding out= leaves everyone with a bad feeling. More importantly, you probably lose m= ore good people then you realize. 35.=09Trading, trading, trading. On MBA campus visits, Enron gives the imp= ression that there are lots of corporate development & M&A, finance, and ot= her similar assignments available at Enron. The reality seems that if you = are not interested in trading for a living, you are not on the company's ma= in commercial track any longer. 36.=09Finding a Rotation: Information difficult to get; it is all networkin= g. This is fine, but I don't consider the A/A progrram a resource in this a= rea at all. If no one else does, we should cut any expenses they are incurr= ing for "rotation placement". 37.=09The skew on associate bonuses hurts morale. You can reward the high = performers without penalizing the good performers. Recently, the word has = gotten around =09that the top 5% and the next 15% of the PRC group got very= large bonuses while everyone below that level got very poor bonuses? This= distribution creates a small number of very happy people and a larger numb= er of unhappy people. 38.=09"I find it interesting that Enron chooses to 1- adopt a business mode= l based upon free-market economics, and 2- pride itself on its intellectual= capital in an era in which the company moves toward being a financial serv= ices player rather than a firm with a tremendous physical presence. In sel= ecting an employer this was a HUGE selling point. I find it paradoxical, h= owever, that we have chosen to adopt a pay grade that could at best be desc= ribed as socialistic, and below market. In a labor market where intellectu= al capital is portable and our chief competitors have seen our competitive = advantage in the form of this asset, I can only believe that Enron is posit= ioning itself to fall short in the years to come when J. Aron, Morgan Stanl= ey, Dynegy, El Paso, etc. decide that the cheapest way to gain ground on En= ron is to higher this intellectual capital. Without griping, I feel if not= hing else, workers at Enron would like to be paid market rate for the talen= ts we possess. In our "sales pitch" we are told that Enron benchmarks pay = against our energy competitors as well as comparable jobs on Wall Street. = I can say from experience that our compensation packages cannot hold a cand= le to the potential for a Wall Street style pay package, which leaves me bi= tter that the sales pitch was shallow, fell short, or was deliberately misg= uided. Part of the problem, from an Associates perspective, stems from Enr= on promising the moon and then falling short on delivery. Like a company t= hat fails to deliver on earnings in a tough market, punishment for such a s= hortfall is swift and severe. I truly believe Enron is setting itself up f= or such a fall unless this matter is addressed swiftly. 39.=09In an extension of the contradiction between free market economics an= d socialistic patronage, I have come to notice that more and more departmen= ts are positioning themselves to hire Associates under the guise that the A= ssociate promise to stay more than the required and desired six months. Fu= rther, many desks, once happy with the performance of the Associate, ask fo= r the "option" to retain the Associate. However, no effort is made to comp= ensate the Associate for essentially giving up the "optionality" embedded i= n a rotational program. In fact, many choosing to stay within a group have= made their experiences explicitly known to others that come PRC time, they= have actually been slighted for cutting short their rotation and instead o= pting to join a unit full time. By removing the ability of business units = to promote a worker until conclusion of the 18-24 month period, hard workin= g, good-fit Associates miss the opportunity to capitalize on what would see= m to be a natural fit for a full-time position, and the chance to alleviate= a significant source of discontent-COMPENSATION- which could be addressed = through the immediate promotion to the Manager level. By allowing for prom= otion, Associates could earn enhanced compensation, and department heads co= uld address hiring needs. Rather, Associates leave a unit disgruntled, fee= ling they are marking time in other units, potentially passing up an altern= ative that may be of great interest. Additionally, a number of Commercial = units have even gone so far as refusing to hire Associates unless they are = in their third or fourth rotation, so as to retain a "call option" on an em= ployee that has run out of rotation alternatives. This practice CANNOT be = in the best interest of the Desks, the Program, or for that matter Enron. = By pigeonholing employees in this matter, the significance and importance o= f rotations is greatly diminished, as is our work experience. This is just= ludicrous! Department heads aren't looking to hire externally because of = the salary shortfall and our forced pay grade. Rather, they are trying to = plug a Manager level position with an Associate salary. Again, rather than= pay a competitive, performance-based wage, Enron has adopted a tight-fiste= d, socialistic pay grade to better serve expenses. Ultimately, this will l= ead to people seeking to "rotate" out of Enron for the compensation the mar= ket will bare. =20 40.=09I think A/A provides an excellent opportunity to find the department = that you would like to work in through rotations and if you do a good job, = chances of advancing are much better for analysts and associates, than for = regular employees. 41.=09We get solid commercial responsibility from the get go - I doubt many= of the guys who went to NY had this. 42.=09We get lots of freedom to manage my own business as long as I produce= . 43.=09Salaries: Not in line with market. 44.=09Mentors: Not encouraged throughout the organization.=20 45.=09Recruiting: Disorganized, not enough student focus, trying to compete= with the IBanks but not willing to offer the salaries, sometimes unprofess= ional conduct (rejection letters to students contained spelling errors and = gave message 'you are not good enough'). 46.=09Summer Intern Program: Not well coordinated.=20 47.=09Rotation Length: Keep flexibility. 6 mos sometimes too short (other t= imes too long); disincents management to include Associates in longer term/= meatier projects. 48.=09When is the issue of salary increases going to be revisited? 49.=09Overall, Enron has a great group of people to work with. 50.=09Enron has an excellent diversity of backgrounds, ethnicity, and natio= nalities within the company. 51.=09Enron has an excellent overall atmosphere 52.=09Overall, Enron has an excellent overall company image 53.=09I do not have too many comments. My main problem with the last team w= as that they were extremely rigid - rigid start date, rigidity in assigning= groups, etc. Old group did one-way dialogues, they would not even listen. = The new group appears flexible and is willing to listen - these are two thi= ngs I feel are most important in running such program. 54.=09Three months ago I talked with Althea Gordon about a couple of friend= s that graduated with me from my business school. They wanted (still want)= to work for Enron. I sent her their resumes and am still waiting for a res= ponse (I believe she left Enron). I then contacted Patricia Payton. Several= emails, phone calls and still haven't heard from her. It's frustrating dea= ling with the HR dept. 55.=09PRC is not a trusted mechanism. Few people in the program understand= it fully, no one knows exactly what occurs in the meetings, and no one bel= ieves the results are truly equitable. Politics appears to play as much of= a role as performance, if not more so, in determining rankings. Further, = groups are not obligated to tell people in the pool where they ultimately r= anked people. For as much as individuals' success depends upon this rankin= g, and for as open and honest as the process is supposed to be, that policy= is incredibly inconsistent. 56.=09We are under market for compensation - everyone knows this, regardles= s of what the program people say. It is common knowledge that at least Rel= iant and El Paso are paying their program participants more in salary and b= onus. The decision to increase sign on bonuses and not salaries to incomin= g participants slighted existing program members by keeping our salaries fl= at and was not well received (obviously). 57.=09Rotation placement service is not very useful. The best way to find = a good rotation remains through networking. 58.=09The experience, talent, and character of the associate pool continue = to be excellent. 59.=09Cooperation and support within the associate class is very good with = virtually no known instances of undermining or backstabbing. Comeraderie a= mong the class is widespread and genuine. 60.=09The efforts to solicit feedback and foster communication by the new A= /A program administration is appreciated and a positive step in the right d= irection. 61.=09Historically there has been at best a poor effort to both maintain in= ternal communication and networking within each associate class and to crea= te new networks between individual associate classes. Efforts by individua= l associates to affect this have not been supported. 62.=09Mixers with business unit management should be continuously offered, = particularly as rotation time approaches. This would facilitate informal d= iscussion about opportunities and business unit activity. Additionally it = would be a good format for associates to exchange information on their rota= tions and introduce those interested to potential future managers. 63.=09Compensation is clearly an issue. Whether the compensation gap exist= s in reality or it only exists in perception, there is a widespread belief = that Enron is under-compensating associates relative to both other firms in= the industry and to a broader set of companies where the same skill sets a= re employed. This is exasperated by the collapsing stock price and severel= y underwater options. Base salary should be addressed. 64.=09Again, whether perception or reality, associates are concerned about = selecting rotations in groups that are not making money. The belief is tha= t bonus levels rise and fall with the profitability of business units. The= refore, it is an extreme disincentive to rotate through an unprofitable gro= up, regardless of the skill development it may offer. 65.=09The mandatory eighteen-month service period before eligibility for pr= omotion is arbitrary and penalizes the best performers. 66.=09What happened to the A/A publication? 67.=09There is no source available that provides a history of individual as= sociates who have rotated through specific jobs. It would be very benefici= al to have a directory of associates who could be contacted for first-hand = information on business units of interest. 68.=09My assessment of the program thus far is that I think there are a lot= of instances where the interviewing group is not upfront about the respons= ibilities that they plan to assign to the Associates before they get into t= he group. Once in, I know of several people including myself that get a wh= ole lot of very ridiculous work that was not a part of the set expectations= prior to joining that group. Furthermore, I believe that Associates get w= ork that is more suitable for a clerk than for someone with a graduate degr= ee. This is very frustrating because once your in, your in and you can't g= et out for 6 months. On top of that, you get PRC reviews based on work tha= t was not challenging and I do not believe that a fair and equitable assess= ment can be made. =20 69.=09Now I understand that this line of thinking does not apply to everyon= e. But the point is that much of this would never happen if people were up= front with their expectations prior to hiring on an Associate. In addition= , it bothers me that Associates are many times treated very, very poorly by= their new groups. This has not been the case for me, but I know people th= at have voiced these thoughts and opinions - so I am speaking for them inca= se they are too nervous to put it into writing. 70.=09That is about it. I would like to see some education come out of the= Associate Program as to new groups that start within Enron, as well as som= e greater insight to particular groups and the expectations. 71.=09When Enron recruited us, it was so different from what it is now. So= many diverse opportunities were out there. Now, Enron is heading towards = a pure trading house. It is getting harder and harder to get a decent rota= tion out of trading. But you don't need an MBA to be a trader! In fact, A= ssociates often work for analysts on the trading side, and we don't have an= y special attention or cultivation from management to progress on the tradi= ng side. It is not a surprise some of us are thinking about "getting the n= ext rotation at El Paso". 72.=09A lot of business units think Associates come and go too quickly, and= six months is not enough for us to climb up the learning curve first, and = then make meaningful contributions. Some people think it is worthwhile to = groom Associates, even less worthwhile than to cultivate Analysts, who are = supposed to be there longer. It is sometimes difficult for Associates to g= et meaningful assignments if management holds such a perception against us. 73.=09Compensation level needs to be adjusted to match up with our competit= ors. 74.=09The company's direction has changed drastically from the one I interv= iewed for in November 2000, some of these strategies seem shortsighted and = in my opinion could make it more difficult for the company to compete in th= e energy business in the long term; specifically: 75.=09The stated strategy of exiting all generation, exploration, and trans= portation assets in my mind endangers the competitive position of the compa= ny and earns us a banking multiple on the street. Also, with additional pl= ayers entering the gas and power markets in a major way, how can we expect = to continue to grow and maintain our current market share? 76.=09Along with our success there have been many failed business ventures;= including Azurix, Enron International, Dabhol, EBS, and EES. The failures= of EES and EBS have still not been fully resolved and appear to have not b= een totally priced in to our stock price. Bottom line; there does not appe= ar to be any large areas of growth within the company. 77.=09Pay! When the firms right up the street offers you anywhere from 25,0= 00 to 40,000 dollars more to do the same job; it doesn't make you feel very= intelligent to be working here. Additionally, when I accepted this positi= on I was never told and have yet to be told what the official limits on and= what the determinants are of the annual bonus. What I have heard through = the grapevine is that it is significantly lower than what I was led to beli= eve during recruiting. Not having any assistance and having attended a top= East coast school, I am almost $100,000 dollars in debt. I was counting o= n the annual bonus to allow me to remove this albatross from around my neck= , but in reality after my debt service I am barely better off than when I w= orked as an engineer in manufacturing. 78.=09I don't see much difference in the kind of assignments between Analys= ts and Associates. It seems unfair for Analysts since they get lower salari= es, but it is also a waste of "years of experience" in the case of Associat= es. It is probably the number of Associates hired every year through the P= rogram gives the idea of a cheap resource for the business units. Be certai= n the position requires some degree of expertise before assigning an Associ= ate. 79.=09If you look at A/A as human capital, we at Enron are very long in bac= kground, experience and knowledge. The A/A Program is "Regulation" using En= ron terminology: from rotation assignments, to payments. I see pretty logic= al the consequences: a lot of inefficiencies, waste of energy, the lack of = objectivity, poor motivation or even frustration, in general performance is= far away from excellent. Add some flexibility to the Program: let the peop= le choose their rotations and move without restrictions. Let them also nego= tiate working conditions, salaries, and career path with the business unit. 80.=09PRC is unfair. I consider offensive writing in a maximum of 5 lines 6= months of accomplishments. I don't think a PRC Committee can better assess= the performance than the business unit. 360-degree evaluations, and peers = review are ok. Re-think the need of a committee and a ranking of A/A assig= ned to so different business units. 81.=09I feel free to choose for a second rotation. I like the way you can a= pproach a new business unit, introduce yourself, have an interview and gath= ered information about the business and your position. Things may change af= ter that and you get stacked in that place for at least 6 months. Keep allo= wing people to search and move freely from HR. 82.=09Make staff more accountable. Online based. Much like the IT departm= ent, where when I call it initiates a request that I must approval closure = of with any comments. 83.=09Tell people up front that bonuses are pretty fixed until you make Man= ager. Not communicated at all. 84.=09Tell people that their first rotations are assigned. Also not commun= icated. 85.=09I wish I had a PRC suggestion, but I need to think about it. 86.=09Don't insult my intelligence by giving incoming Associates more money= but putting it in a bonus so you don't have to give us raises. If you wan= t to do that, give me the courtesy of being up front about it. 87.=09Some kind of database (maybe there is one that I don't know about) of= openings. Would be pretty cool. 88.=09Raise compensation so it is at a premium to our competitors - at the = least so it is equal. 89.=09Make the development and support of associates a more important crite= rion in the PRC process for both directors and Vice Presidents. The commer= cial stress is so high right now that development is ignored completely 90.=09Reduce the size of each incoming class - make the program special aga= in. Right now, I can't believe the broad spread in ability and experience = in the associate class. I guarantee the spread is not that high in other t= op tier firms that hire MBAs. 91.=09With the smaller size, assign a lead commercial person to a group of = 5 associates. The lead commercial person (a director or VP) would keep in = touch with and help out his group of associates to make sure they make the = most of their rotations and Enron gets the most out of them 92.=09Make sure the program stays in touch with commercial groups so these = groups know when they need a clerk, analyst, or associate. Too often we tr= eat analysts, clerks, and 30-year-old associates with 6-8 years of experien= ce the same. This happens way too much. 93.=09The program should work with the incoming associates a little closer = to help them understand what kinds of job or what kind of career path they = want to take and design a plan on how to get them there.
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