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 repeat themselves.  Many of the comments are with respect to salary.  There is 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.  

I hope you find them relevant and/or useful.  

I was told that William Lemons of the associate program saw this list a couple of months ago and reacted positively.  A raise is being studied for current associates and the offers were higher for this year ?s summer associates.

Best,

Ricardo
 -----Original Message-----
From: 	Balmaceda, Andres  
Sent:	Friday, August 17, 2001 3:06 PM
To:	Charvel, Ricardo
Subject:	FW: 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 respond.  We had a high response rate.  

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 printing it.  

Vikas



 

Comments from MBA Class 2000

1.	We need to reconcile the difference between ENE's salaries vs competitors' and other Houston companies.

2.	We need better guidance in the rotation selection (I've seen lot of good people being screwed because choosing a bad area to work due to lack of information).

3.	Regardless of whether you like your rotation or not, the Program itself 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.	If they have resources, they do a poor job of communicating them.  While we do have a responsibility to find info ourselves, there should be an active effort to point us to those resources.

5.	Compensation.  The bonus part is certainly not communicated as being locked into a fixed range and independent of business unit performance.  At the very least, this is a serious oversight.  

6.	PRC.  Really doesn't work.  Not an apple to apples comparison.  Heavily dependent on when/where you rotated.

7.	I 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 months, in effect preventing Enron from getting the public equity markets to pay my compensation?  

8.	Also there has been a significant change on the acceptable cut in terms of the PRC, where before Enron was penalizing the "have issues" classification of the PRC, now it feels like they are trying to get rid of 20% of the pool. Reinforcing the first paragraph.

9.	Offer of salary is cloaked and we don't know where we can end up.

10.	I believe there is a big disconnect between recruiting team and the head office. As a result, the sales pitch given to recruits leads to false expectations. And obviously when those expectations are not met, we all know the consequences.

11.	The rest of the downtown Houston Energy concerns are paying much higher base

12.	Can we have a list of companies we benchmark compensation against?  Is it really Wall Street and consulting?  If so, I'd like to see the names of 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 benchmarking against second or third tier MBA recruiters.

13.	There's a feeling among the Associate pool that you need to be in a secure, established, money making division in order to guarantee a average or 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. 

14.	Attempting to get into rotation and expect competition from others rotating but do not expect to get displaced by a 1st rotation associate that is placed by the AA pool.

15.	Assignment 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.	Manage expectations...don't need to hear about 26 year old trader and Louise Kitchen's rise to fame with Enron Online...creates an expectation that those are more common occurrences than they really are.

17.	It doesn't feel like there's a lot to do in all areas, nonetheless something between 60 and 100 new associates coming in these fall: First, why that many?  Second, do they know what they are getting into?

18.	The 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 program this is becoming a much bigger issue.

19.	Enron is so secretive about salaries that Associates have no idea what the upside looks like.  Working for beans in year 1 is ok if years 2-5 are excellent.  We really have no idea what to expect for salary or bonus after the program is over.

20.	Salary well below market (base salary and value of options/bonus) - even if they bring us up to the 2001 offers (which are rumored to be under market), we have 1 year or more experience with the class coming in and will be paid the same amount?

21.	Lack of quality rotations (cuts in EBS, EES, ect...)

22.	Level of responsibility is well below expectations/maturity level

23.	Compensation 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 MBA scale.  It is cheaper to live in Houston but our student loans are not indexed by location.  Other energy companies here in town even pay more.  

24.	The Enron contract is designed to retain employees with sticks and not 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 special people should not be forced to repay anything-Enron should deliver what they advertise and people will stay.  The 18-month lock up period suggests a concern with retention that is being met with a penalty to the Associate and not an improvement in the Program. 

25.	How much do managers make assuming certain business and individual performance levels?  I've got no clue but I'm wondering why it such a big secret? 

26.	The PRC process does not encourage people to experiment in their rotations 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 learning the job.  Similarly, if you were a trader and go to a trading rotation, you will be rewarded a PRC time.

27.	There are too many associates and too few analysts.   Too many associate rotations become exercises in finding something to do.  Too often, associates think to themselves, I remember doing this several years ago as an undergrad, why am I doing this again.

28.	They should present the program for what it is -an internal labor pool 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 the program.  This is not because they want Associates to have choice, but rather because they have no proven record of placing people in the rotations.  

29.	If 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 know what companies we are benchmarking against but I guarantee we are not keeping up.  Small differences can create a lot animosity towards the program.  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 just been sold a lot of hype.

30.	Not enough development during rotations - even associates who end up learning a lot don't necessarily enjoy their rotations because they don't feel part of the team

31.	Not getting to pick your rotations or at least interview for your first 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.	Compensation - many gave up lucrative offers elsewhere for a lower base and bonus package from Enron because the stock price movement promised large equity based compensation.  Also, it was very difficult to find out what full first year bonuses were during the recruiting process.  Most wrongly believed that this indicated that the bonuses were competitive versus other leading MBA avenues.  How much money do people at Enron make assuming the stock price performs1. Great 2. Okay, 3. Poor?  

33.	Responsibility - when you are getting recruited you always here the Louise 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 everything outside of gas and power trading will super fast promotions as we look more and more like a large corporation.  

34.	The program is designed to bring in too many associates and then let them compete with each other until the weaker associates are driven out.  If this is true, why not spend more time and money recruiting and bring in fewer, higher quality associates from the start - the process of weeding out leaves everyone with a bad feeling.  More importantly, you probably lose more good people then you realize.

35.	Trading, trading, trading.  On MBA campus visits, Enron gives the impression that there are lots of corporate development & M&A, finance, and other 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 main commercial track any longer.

36.	Finding a Rotation: Information difficult to get; it is all networking. This is fine, but I don't consider the A/A progrram a resource in this area at all. If no one else does, we should cut any expenses they are incurring for "rotation placement".

37.	The skew on associate bonuses hurts morale.  You can reward the high performers without penalizing the good performers.  Recently, the word has gotten around 	that 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 number of unhappy people.

38.	"I find it interesting that Enron chooses to 1- adopt a business model 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 services player rather than a firm with a tremendous physical presence.  In selecting an employer this was a HUGE selling point.  I find it paradoxical, however, that we have chosen to adopt a pay grade that could at best be described as socialistic, and below market.  In a labor market where intellectual 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 positioning itself to fall short in the years to come when J. Aron, Morgan Stanley, Dynegy, El Paso, etc. decide that the cheapest way to gain ground on Enron is to higher this intellectual capital.  Without griping, I feel if nothing else, workers at Enron would like to be paid market rate for the talents 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 candle to the potential for a Wall Street style pay package, which leaves me bitter that the sales pitch was shallow, fell short, or was deliberately misguided.  Part of the problem, from an Associates perspective, stems from Enron promising the moon and then falling short on delivery.  Like a company that fails to deliver on earnings in a tough market, punishment for such a shortfall is swift and severe.  I truly believe Enron is setting itself up for such a fall unless this matter is addressed swiftly.

39.	In an extension of the contradiction between free market economics and socialistic patronage, I have come to notice that more and more departments are positioning themselves to hire Associates under the guise that the Associate promise to stay more than the required and desired six months.  Further, many desks, once happy with the performance of the Associate, ask for the "option" to retain the Associate.  However, no effort is made to compensate the Associate for essentially giving up the "optionality" embedded in 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 opting 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 working, good-fit Associates miss the opportunity to capitalize on what would seem 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 promotion, Associates could earn enhanced compensation, and department heads could address hiring needs.  Rather, Associates leave a unit disgruntled, feeling they are marking time in other units, potentially passing up an alternative 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 employee 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 of 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-fisted, socialistic pay grade to better serve expenses.  Ultimately, this will lead to people seeking to "rotate" out of Enron for the compensation the market will bare.   

40.	I 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.	We get solid commercial responsibility from the get go - I doubt many of the guys who went to NY had this.

42.	We get lots of freedom to manage my own business as long as I produce.

43.	Salaries: Not in line with market.

44.	Mentors: Not encouraged throughout the organization. 

45.	Recruiting: Disorganized, not enough student focus, trying to compete with the IBanks but not willing to offer the salaries, sometimes unprofessional conduct (rejection letters to students contained spelling errors and gave message 'you are not good enough').

46.	Summer Intern Program: Not well coordinated. 

47.	Rotation Length: Keep flexibility. 6 mos sometimes too short (other times too long); disincents management to include Associates in longer term/meatier projects.

48.	When is the issue of salary increases going to be revisited?

49.	Overall, Enron has a great group of people to work with.

50.	Enron has an excellent diversity of backgrounds, ethnicity, and nationalities within the company.

51.	Enron has an excellent overall atmosphere

52.	Overall, Enron has an excellent overall company image

53.	I do not have too many comments. My main problem with the last team was 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 things I feel are most important in running such program.

54.	Three months ago I talked with Althea Gordon about a couple of friends 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 response (I believe she left Enron). I then contacted Patricia Payton. Several emails, phone calls and still haven't heard from her. It's frustrating dealing with the HR dept.

55.	PRC 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 believes 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 ranked people.  For as much as individuals' success depends upon this ranking, and for as open and honest as the process is supposed to be, that policy is incredibly inconsistent.

56.	We are under market for compensation - everyone knows this, regardless of what the program people say.  It is common knowledge that at least Reliant and El Paso are paying their program participants more in salary and bonus.  The decision to increase sign on bonuses and not salaries to incoming participants slighted existing program members by keeping our salaries flat and was not well received (obviously).

57.	Rotation placement service is not very useful.  The best way to find a good rotation remains through networking.

58.	The experience, talent, and character of the associate pool continue to be excellent.

59.	Cooperation and support within the associate class is very good with virtually no known instances of undermining or backstabbing.  Comeraderie among the class is widespread and genuine.

60.	The efforts to solicit feedback and foster communication by the new A/A program administration is appreciated and a positive step in the right direction.


61.	Historically there has been at best a poor effort to both maintain internal communication and networking within each associate class and to create new networks between individual associate classes.  Efforts by individual associates to affect this have not been supported.

62.	Mixers with business unit management should be continuously offered, particularly as rotation time approaches.  This would facilitate informal discussion about opportunities and business unit activity.  Additionally it would be a good format for associates to exchange information on their rotations and introduce those interested to potential future managers.

63.	Compensation is clearly an issue.  Whether the compensation gap exists 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 are employed.  This is exasperated by the collapsing stock price and severely underwater options.  Base salary should be addressed.

64.	Again, whether perception or reality, associates are concerned about selecting rotations in groups that are not making money.  The belief is that bonus levels rise and fall with the profitability of business units.  Therefore, it is an extreme disincentive to rotate through an unprofitable group, regardless of the skill development it may offer.

65.	The mandatory eighteen-month service period before eligibility for promotion is arbitrary and penalizes the best performers.

66.	What happened to the A/A publication?

67.	There is no source available that provides a history of individual associates who have rotated through specific jobs.  It would be very beneficial to have a directory of associates who could be contacted for first-hand information on business units of interest.

68.	My 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 responsibilities that they plan to assign to the Associates before they get into the group.  Once in, I know of several people including myself that get a whole 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 work that is more suitable for a clerk than for someone with a graduate degree.  This is very frustrating because once your in, your in and you can't get out for 6 months.  On top of that, you get PRC reviews based on work that was not challenging and I do not believe that a fair and equitable assessment can be made.  

69.	Now I understand that this line of thinking does not apply to everyone.  But the point is that much of this would never happen if people were upfront 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 that have voiced these thoughts and opinions - so I am speaking for them incase they are too nervous to put it into writing.

70.	That 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 some greater insight to particular groups and the expectations.

71.	When 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 rotation out of trading.  But you don't need an MBA to be a trader!  In fact, Associates often work for analysts on the trading side, and we don't have any special attention or cultivation from management to progress on the trading side.  It is not a surprise some of us are thinking about "getting the next rotation at El Paso".

72.	A 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 get meaningful assignments if management holds such a perception against us.

73.	Compensation level needs to be adjusted to match up with our competitors.

74.	The company's direction has changed drastically from the one I interviewed 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 the energy business in the long term; specifically:

75.	The stated strategy of exiting all generation, exploration, and transportation assets in my mind endangers the competitive position of the company and earns us a banking multiple on the street.  Also, with additional players 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.	Along 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 been totally priced in to our stock price.  Bottom line; there does not appear to be any large areas of growth within the company.

77.	Pay! When the firms right up the street offers you anywhere from 25,000 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 position 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 believe 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 on 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 worked as an engineer in manufacturing.

78.	I don't see much difference in the kind of assignments between Analysts and Associates. It seems unfair for Analysts since they get lower salaries, but it is also a waste of "years of experience" in the case of Associates.  It is probably the number of Associates hired every year through the Program gives the idea of a cheap resource for the business units. Be certain the position requires some degree of expertise before assigning an Associate.

79.	If you look at A/A as human capital, we at Enron are very long in background, experience and knowledge. The A/A Program is "Regulation" using Enron terminology: from rotation assignments, to payments. I see pretty logical 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 people choose their rotations and move without restrictions. Let them also negotiate working conditions, salaries, and career path with the business unit.

80.	PRC 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 assigned to so different business units.

81.	I feel free to choose for a second rotation. I like the way you can approach a new business unit, introduce yourself, have an interview and gathered information about the business and your position. Things may change after that and you get stacked in that place for at least 6 months. Keep allowing people to search and move freely from HR.


82.	Make staff more accountable.  Online based.  Much like the IT department, where when I call it initiates a request that I must approval closure of with any comments.

83.	Tell people up front that bonuses are pretty fixed until you make Manager.  Not communicated at all.

84.	Tell people that their first rotations are assigned.  Also not communicated.

85.	I wish I had a PRC suggestion, but I need to think about it.

86.	Don'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 want to do that, give me the courtesy of being up front about it.

87.	Some kind of database (maybe there is one that I don't know about) of openings.  Would be pretty cool.

88.	Raise compensation so it is at a premium to our competitors - at the least so it is equal.

89.	Make the development and support of associates a more important criterion in the PRC process for both directors and Vice Presidents.  The commercial stress is so high right now that development is ignored completely

90.	Reduce the size of each incoming class - make the program special again.  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 top tier firms that hire MBAs.

91.	With 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.	Make sure the program stays in touch with commercial groups so these groups know when they need a clerk, analyst, or associate.  Too often we treat analysts, clerks, and 30-year-old associates with 6-8 years of experience the same.  This happens way too much.

93.	The 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.