A Suggestion to Banks

[drplokta]

Take all of your employees' base salaries, and add on the maximum bonus currently achievable. Make these the new quoted base salaries, with graduated penalties imposed on everyone but the absolute star performers. Start saying things like, "We paid no bonuses this year, but we clawed back £5 billion in penalties for failure to meet performance targets." Problem solved.

Comments

[voidampersand.livejournal.com]

Great idea! Don't be surprised when the clawbacks strangely fail to materialize.

[ms-cataclysm.livejournal.com]

I think it's a herd behaviour and games theory thing, like when all the big accountancy firms tried not to be the first to have a redundancy programme.

If you don't step out of the crowd, the general oppobrium is shared by the entire industry and no competitive disadvantage is suffered.

If you do decide to cut and either all those awful things your lawyers say about the bonuses now being implied terms of the contract turn out to be true or your top people do skedaddle (according to our friendly local headhunter,Generation Z thinks recessions only happen to other people), then you're stuffed.

If none of these bad things happen, all the competition follows suit and your bank is back in the same position as before as regards competitive advantage .

No one wants to be the first bank caught trimming bonuses, but if one bank does it and the sky doesn't fall in, then things might be a bit different.

Or is that too simplistic?

[billyabbott.livejournal.com]

At least roll the "guaranteed bonus" into the salary and make the rest of it truly performance based. Clawing back cash after the fact is dangerous in a place where the people are highly paid, litigious and have no company loyalty :)

[were-gopher.livejournal.com]

I think I've seen that idea in an Alex cartoon.

[alexmc.livejournal.com]

I have two identical copies of "Alex" in paperback. One was a bonus.


PS - If anyone actually hears of this being applied anywhere, do tell me and I'll go apply to them.