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Workforce Management highlighted another company where top execs are taking a hit along with others in an article titled: "Caterpillar to Bulldoze Top Exec' Incentive Comp." Here's a key quote.

"Just a few days after laying off roughly 800 workers, executives at heavy-equipment maker Caterpillar revealed its top officers will see a substantial reduction in their compensation next year. Executives will earn as much as 50 percent less in 2009, according to a statement issued Monday, December 22, by the maker of construction and mining equipment. In addition, senior managers at Caterpillar will take pay cuts of anywhere from 5 to 35 percent next year compared with their salaries from 2008. Details of the plan were not disclosed, but Caterpillar noted the lower levels of compensation would result largely from 'reductions in the company’s incentive compensation program and equity-based compensation.'"

I applaud the executives atCaterpillar for being part of the solution with something besides a press release. But the Caterpillar plan doesn't interest me as much as the way Cat's approach to layoffs is just one more part of the company's people-valuing culture.

Back in the early 80s, things looked bleak for Cat. Japanese competition, specifically from Komatsu, was strong. The company looked a lot like the Detroit 3 automakers look today.

A succession of CEOs and good decisions changed that. Costs were cut. The company outlasted the UAW in an 18 month strike.

Caterpillar adopted Six Sigma practices worldwide. They developed a new engine technology, ACERT. They decentralized and began involving people throughout the organization in decision-making and re-shaping the company.

In 1998 a team studying how to become more customer-centric recommended that Caterpillar become a "learning organization" following the model laid out by Peter Senge in The Fifth Discipline. . Further pursuit of that goal led to the creation of Caterpillar University in 2001.

Caterpillar University (CU) has become one of the most respected corporate universities. But there's more to this story.

CU has done the traditional corporate university things. It has developed courses and leadership development programs. It uses both classroom learning and technology-based learning platforms.

But CU has gone beyond most corporate universities in important ways. They've provided training to all job classes in the company. They've put together one of the best training programs for frontline supervisors, people who get almost no training in most companies.

And yet that's all back-story for this post. The important thing is that CU has become the core of a system that helps people develop. That system includes clear corporate goals and Six Sigma techniques.

At Caterpillar there are individual learning plans tied designed for both individual growth and improved performance. It's an important part of a corporate culture that values people and believes that leaders should be teachers.

Over the last quarter century Caterpillar developed a culture that values people. They've put resources and training in place to support that idea. .

Management thinker Chris Argyris distinguished between an organization's "Espoused Theory" and its "Theory-in-Use." Many companies espouse the theory that people are the most important thing.

Espousing is not enough. What you say doesn't speak nearly as loudly as what you do. Especially when times get tough.

So far the theory in use at Caterpillar is that people are valuable. They talk the talk. They provide training and resources. They spend time developing people.

Now those values will be tested. So far, Cat is doing a good job.