IBM recently sent a memo to select employees in Global Technology Services that some of them "have not kept pace with acquiring the skills and expertise needed to address changing client needs, technology, and market requirements," according to a memo to select employees obtained by Computerworld. What's more, they were told they must attend required training one day a week for 23 weeks, during which time — wait for it — their pay would be cut by 10 percent.
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1. Exactly why is this disturbing? IBM has every right to make such a decision, yet something about it feels wrong. For one thing, this action seems to violate an implicit pact between employers and employees regarding skill development.
Simply stated, companies are generally expected to provide the training required to keep basic competencies up-to-date. Nurses will be taught to use electronic records. Lawyers will attend annual seminars on legal changes. Auto repair techs will learn to service heavily computerized cars.
But not in the GTS division, where a technician making $60,000 a year will now be required to sacrifice about $3,000 for training "to address changing client needs, technology, and market requirements." Since this helps IBM compete, shouldn't the company foot the bill?
2. Why pick on these folks? So far, no one has explained why only these 100 employees must take a pay cut to get trained. In anonymous comments on the Computerworld article, some have described the move as a cost-cutting exercise. But that explanation doesn't fly, because this is truly chump change for IBM.
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A spokesperson tried to downplay the decision by saying "this involves a very small number of people" and is by no means standard practice across the company.
If this is not an accepted practice, why is it being done?
3. How about executives? And the board? The GTS group is being retrained in CAMSS — cloud, analytics, mobile, security, and social — IBM spokeswoman Trink Guarino is quoted as saying in the Computerworld article. Given that many IBMer's have been with the company for decades, odds are that other folks have also lacked expertise in these areas.
For example, those technologies certainly weren't around when CEO Ginni Rometty joined IBM 33 years ago. So, did she give up 10 percent of her salary while going through that learning curve? And how about the board? With an average age of 64, they surely required some technical updating – but did they pay for it with a cut to their $250,000 annual fee?
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4. What does this say about IBM's values? IBM has historically claimed to be guided by core values, one of which is "trust and personal responsibility in all relationships." So, just how is employee trust being affected by this decision? To be informed via email that your skills are outdated and your pay is being arbitrarily reduced by 10 percent would certainly erode trust for most of us.
5. Is IBM misleading their customers? In advertising materials, IBM describes GTS as having "highly skilled technical consultants" who "deliver the combination of deep technological expertise and rich industry insight." Really? According to the pay-cut email, many employees "have not kept pace with acquiring the skills and expertise needed to address changing client needs, technology, and market requirements." So, be careful, GTS customers.
6. Is IBM misleading job applicants? IBM entices potential recruits with invitations to "deepen your expertise" and "re-invent yourself without ever leaving the company," stating that "few places offer as many opportunities as IBM to gain knowledge in your field". The pitch fails to mention, however, that you could be required to subsidize your training with a surprise pay cut. Anyone receiving an offer from IBM might want to ask about that.
7. How is Ginni Rometty involved in this? Considering where the buck stops, one wonders about CEO Rometty's role in these events. Perhaps some random GTS executive simply made a boneheaded move without informing anyone. If so, that will hopefully be on the agenda at performance-review time.
On the other hand, Ms. Rometty might be using this small group of guinea pigs to try out a new HR strategy. In that case, the other 400,000 IBM employees need to pay attention.
All in all, it's hard to determine the broader implications of this decision. Nevertheless, here are a few suggestions for the IBM executive team: 1) Develop and enforce training policies consistent with IBM values, 2) Do not make employees pay for education required by the company, 3) never tell people about pay cuts or performance problems in an email, and 4) Don't be jerks.
Commentary by Marie McIntyre, a career coach (www.yourofficecoach.com) and the author of "Secrets to Winning at Office Politics." Follow her on Twitter @officecoach.