BANKERS’ BONUSES

The bankers’ bonuses polemic has got me thinking. I have been grappling with my thoughts about the Monopoly money bonus figures of the erstwhile bosses and what a bonus means for people on the ground.

I am not writing in defence of the bonus culture, far from it. This issue though, does hit the lower level staff in the guts, the majority of them do not get the high wages their boardroom and senior bosses have been used to acquiring. A meeting with a Royal Bank of Scotland teller last year, keeps jumping to mind every time I hear a discussion on this matter. The meeting was well before the October banking crisis news broke.

The teller was a part time employee. There had been sickness, people on courses and holidays. She had been asked to stay longer at work than her salaried hours and work extra days, for which, when I met with her, she had just been told she would not be remunerated in cash, as the branch had reached its budget limits. She would have to find hours or days to have time in lieu, when it suited the branch’s staffing needs. Her goodwill had totally evaporated. Payments would have been welcome as this was a single parent with two children (through marital breakdown). A bonus in this case, would have been worked for and deserved.

There is so much focus on the immoral aspects of the ‘bonus culture’ as it is called, that you lose sight of the human element, the place where the majority ordinary employees are to be found.

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0 thoughts on “BANKERS’ BONUSES

  1. Yes, but her primary reward should have been a proper hourly rate for all hours worked. Only if she then contributed extra value should she receive a bonus.

    When, in my early days, I worked for various firms, we got two sorts of bonus. The first being a yearly one based on the firms profit and our efforts contributing to that. The second a Christmas bonus which was based on ones rank in the firm.

    When I started employing staff of my own, I paid a weekly incentive bonus based on productivity, paid as a percent of the ‘firsts’ quality goods produced (this was to encourage good practice in avoiding the sorts of slap-dash work the lead to good becoming ‘seconds’,) and two seasonal bonuses of fixed amounts, one at the Christmas break (a week off with pay) and the other just before the summer break (also a week off with pay). People effectively got double time for the break weeks, but no productivity bonus those weeks, but it was not really a ‘bonus’ – we merely divided their yearly salary (paid weekly) into 54 parts instead of 52. This system worked brilliantly in keeping the lads and lasses happy. We had no ‘fat-cat’ executives and as CEO I was constantly complaining to myself that there was no point in me getting paid as I had to work so hard I would never have time to spend it…. 😉

  2. First para; I agree wholeheartedly.

    Your other points relate to a paragraph I deleted about the bonuses that various workers get paid actually being part of what they would have earned and not being new money. However, I decided not to ‘muddy the waters’ with additional features in my blog.

  3. Yes, your points are valid Rubychoo. I am well aware that it is how these matters are calculated, even in such echelons as the civil service,let alone small companies or banks. It is never new money, but it becomes money not calculable for pension and so forth. An incentive payment that is a dis-benefit, if you like.

  4. It is nothing new, the Chinese are practising what many employers have been doing in a variety of ways the world over. Undoubtedly, none of it would be ‘new money’ the allocated salary calculation would take care of that, prior to actual salaries paid.

  5. Bonuses paid to bankers have attracted hysterical abuse not only by an aggrieved public but also by journalistic comments.

    Now let’s get real. bonuses. Big bonuses paid to directors and departmental heads should be forgone. The chiefs are at fault not the Indians as they are paid to carry out orders and deliver. They are incentivised to perform and over-perform and they of course should be rewarded. When I educate directors and managers on the subject of incentives and performance enhancement I start by laying the foundation “you will get more of whatever you reward and recognise” so be careful in what you do recognise and reward. If you reward or recognise long hours of work you will get people doing just that but not necessarily enhanced performance.

    A few years ago I was asked to sort out a problem with a major parcel carrier. They were experiencing a high level of customer complaint of non-delivery with too many parcels returned to the depots. A bright young executive put in an incentive programme for the drivers. If the parcels were not returned to the depot – the drivers earned more money. You can guess what happened – a good incentive but rewarding the wrong result

    This is exactly what has happened to the chiefs in the banking fraternity. The right incentive but for the wrong result. The vast majority of the Indians who have performed well and who have had little or no impact on the mess that the banks are now in should be getting their bonuses.

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