Question: As noted earlier in this chapter, IBM fell on hard times during the 1980s and ultimately abandoned its no-layoffs policy in the 1990s, while also taking other cost-cutting initiatives. Its "Hundred Percent Club," however, remained in existence to reward superior salespeople with luxurious vacations that also included some company business. Consultants suggested that IBM could save millions by eliminating the practice, but IBM's management refused to do so.
a. If you ran IBM how would you explain to shareholders why you chose to retain the Hundred Percent Club?
b. Under what circumstances might you choose to reduce or eliminate it?