The subject of bankers and their bonuses has raised its ugly head again this week. Yes, it is getting kind of boring. If only because nothing new ever comes out of these media-driven examinations. All we really get is a platform for the ‘public’ (or sections of the public) to express their disgust. What is there new to say? Well, one or two thoughts spring to my mind (albeit not necessarily new).
First, the mass demonization of everyone who works in the banking industry is unhelpful and unfair. Indeed, a sizeable majority of those who work for the bank in the news this week, operate a long way (both physically and financially) from the lofty heights of the “City Bonuses” often quoted by the press. The people who work at the front desks of the provincial banks up and down the high streets, or in the call centres around the world, or in the admin departments at HQ, are not earning big bucks, and in the main, will never see a bonus no matter how good a job they do.
Second, the bonus system (not just in banking), one of the key incentivisation tools at the very heart of capitalism, is profoundly broken.
Let’s assume for a moment that monetary bonuses do have some merit as a means of incentivising staff to do a better job than they otherwise would do. At the very least, one would expect that the measure of success used to decide whether the bonus should be paid, would be one that resulted in a direct improvement for the customer. That may be in the form of better value (financially), better quality or better service, but it should be something that is tangible and agreed (externally) as having resulted in that improvement.
What has become all too prevalent in the crazy ‘bonus-driven culture’ of our businesses and organisations, is an industry of internally-driven, inward-looking, process improvement measures, which have little or no relevance to the end customer, or recipient of the service. Internal departments, in order to prove their value and viability, concoct complicated measures, based on process efficiency, productivity enhancements, employee engagement and so on. All worthwhile activities, no doubt, but irrelevant if the end customer experience is not impacted and does not improve. Despite this, great effort is expended in agreeing annual goals and targets, and even greater effort in gathering evidence to prove they have been achieved, regardless of whether the end customer is receiving improved service, value or product innovation. The system has lost its way, and lost touch with its original purpose.
Ah, original purpose. What was that anyway? Continue reading