30 March 2009

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Bonuses are just for Bankers!

With the regular disclosure of ‘obscenely’ high bonus payments being made to Bankers’ despite their seemingly ‘obvious’ incompetence and irregardless of their actual performance, the public outcry against bonuses as a whole has grown to a deafening crescendo……or so the tabloids would have you believe.

Bonuses have become a dirty word, but need that be the case?
We all know that the Financial Industry must completely overhaul it’s payment regulations but does this mean all roles that have a bonus are wrong? The IT industry is rife with Performance (company, team and individual) related bonus schemes which can become very complex. Would those schemes all seem ‘morally right’ under investigation?

There are those in the financial industry who have lost their purely performance related bonuses due to cost cutting exercises by the banks. Imagine being a low level employee on a £14k base and losing your anticipated £5k bonus despite having your most productive year!

Alastair Darling is quoted as saying “The party is over when it comes to bonuses,”
New international rules are set to be introduced to curb the bonus culture. Companies will have to review the way their bonuses are paid and how they relate to individual and team performances. It is hoped this will bring about greater transparency and reduce some of the complexities which we can currently see.

This all seems to be steps in the right direction but the fear is it will go to far. Reward and recognition go a long way to help drive this country and indeed the Western worlds workforce and we must be careful not to squash that system.  However if we can encourage companies not to put a big bonus at the centre of their employee retention strategy for 2009 and beyond then hopefully we should see the loyal staff being rewarded with other non financial rewards such as extra training courses etc.

In all Industries the Reward by bonus culture has been allowed to get out of control and for those who are “only in it for the money” I predict some tough times ahead!

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