if you talk to anyone in compensation design systems, they will tell you unequivocally that this system was designed for SHORT TERM use only, and that its implementation over a longer period results in exactly the dysfunctional cultural manifestations that we have at Merck. All of this data has been available for a long time, Merck had access to it, it was completely predicateble.
Here is what is most telling: In light of all the available evidence that this system results in creating a highly toxic culture, in light of all the experts, papers, commentary and understanding within the compensation world, Merck's decided to ignore it and continue to use it.
This pretty clearly says to all us "We know that this one aspect of how we conduct ourselves leads to a highly dysfunctional culture, and we know we have options, and we know we have almost UNIVERSAL support to change this one aspect, and we know that the chances are pretty good that if we took this ONE step, it would probably result in a massive cultural shift in a positive direction, yet we - the leaders - have made a conscious decision to ignore all the available data and forge ahead knowing that we employ a system that encourages exactly the kind of behavior we publicly state we are trying to change".
they know culture eats strategy for lunch every day, and those of you who paid attention to Mark Timeny at the meeting in Feb, when this question was answered, he very clearly said, yeah we know this forced ranking system is leading to all kinds of negative outcomes for the organization, but we are not changing it.
so folks, just in case you think maybe there is a chance that one one gets it, they get it. they understand completely what they are doing, they have the ability to change it and they are making a very conscious decision NOT to change it.
that should pretty much tell you everything you need to know about how committed to changing the culture the leadership really is.