The row over inappropriate bonuses rumbles on (don’t even mention pensions…), with attempts to clawback past payments that now seem (even more) horribly obscene given how events have unfolded. Some people are now starting to question the need for bonuses at all:
People are paid wages and salaries for doing what they are expected to do. If they don’t live up to expectations they should get the sack…
The vast majority of real workers do not receive any sort of bonus; our reward for good work is our wage at the end of the week.
The Observer’s concise article explains that it is not actually money that motivates many people to do a good job, rather it is the challenge of completing meaningful work. It says:
[Bonuses] seem to result in higher performance, [but they are] death to the co-operation and teamwork on which overall organizational performance depends. From sports teams and university departments to publicly quoted companies, the greater the pay inequalities the worse the results, whether in terms of collaboration, productivity, financial performance or product quality.
So maybe the answer for the new bank executives (and other new chiefs in companies of all shapes and sizes) is to take relatively well paid positions that do not include bonuses based on performance. A few years down the line there will be a few individuals who are recognised as doing a good job of getting their companies back on their feet. Reputation alone will boost their position in their respective industries – and that’s the best dividend on offer for the foreseeable future.
• The Observer: However good the pay, it doesn’t buy results