I know that this will cause an argument, as I was having this very argument myself, but I cannot let the opportunity pass to report a conversation I was having about City bonuses.
The media have a blast every time there’s a rumour of a bonus being paid in a bank, but here’s the rub: bankers deserve their bonuses.
Put it in context.
You go out for a meal and have great service – do you purposefully not tip the waiter or waitress, just because you happen to know that the restaurant is making losses?
You are a branch teller. You sit there every day smiling and chatting with customers, counting money, behaving honestly and doing a good job. Do you not deserve to be paid for meeting objectives, as per your job contract, even though the bank is losing money?
You’re working in a bank call centre. You work really hard every day, taking abuse over the phone. You are voted the best call centre worker of the year, and achieve all of your targets. Do you not deserve the holiday in the Canary Islands for the Best Call Centre Worker of the Year Award?
You see what gets me, taking the examples above, is that everyone in society from the highest to the lowest, from the meekest to the mildest, from the most arrogant to the most humble, would probably agree that – given the way you are employed and rewarded – you deserve your two-penneth worth.
If you agree that you would be a Scrooge if you go to a restaurant and hotel and don’t tip for good service, then surely you agree that if you employ a branch or call centre worker, and don’t pay them for achieving their annual objectives, you are behaving badly too.
If you were working in an I.T. firm, retail store or similar operation, would you not pay staff bonuses to call centre and store workers, even if the firm as a whole made a loss?
You probably would if you could.
So now we get on to the fact that we are talking about banks.
Just because the bank’s management and investment managers screwed up, does it really mean that every worker in a branch or call centre should be punished?
Shouldn't staff be rewarded if they achieved their targets and worked honestly and hard, with dedication and conscientiousness?
So now you may be getting a little convinced that yes, some of these folks deserve their £2,000 annual reward for good service or holiday in the Canary Islands … if you’re not convinced, then why not? Surely it is the bank’s management that should be punished, not the dedicated staff who worked hard for them and had no idea what a SIV, CDO, MBA, CDS and the rest was all about.
So now to the really contentious part.
If a waiter in a restaurant deserves their tip, even if the restaurant is losing money; if the housekeeper in the hotel deserves their few pounds that you left for them, even though the hotel is losing money; then the call centre worker and branch teller deserve theirs.
If you would reward the call centre worker in a retail business, even when the retailer is making losses, then you should reward the bank call centre worker.
So what’s the difference between that, and the investment banker who made the bank £10 billion profit last year?
Why should the investment banker lose their bonus of £20 million, when they achieved all of their objectives, worked hard and in a dedicated fashion?
Oh yes, because the bank is losing billions and is being bailed out by the government.
Oh yes, because the investment bankers are all greedy bastards, and should be flagellated in public.
Well, I’m sorry, none of that makes sense because didn’t you just agree that the call centre worker deserved their reward for achieving objectives?
What’s the difference between the call centre worker and the investment banker?
They both worked hard and in a dedicated fashion; they both achieved their objectives; they both had an expectation that was met and even exceeded; so why are you being so mean and saying they don’t deserve it?
Oh yes, because the investment banker is being paid £20 million whilst the call centre worker is being paid £2,000.
So it’s just a matter of scale is it?
That doesn't work then.
Do you think the £2 tip versus the £2,000 reward for meeting objectives versus the £20 million bonus for producing profits should really be changed, just because you don't like the size of the last figure?
Well the investment banker generated £10 billion in profitability for the bank, and is getting a £20 million bonus, so that’s 0.2% of profit.
0.2% of profit is the banker’s bonus on the profit he or she personally delivered.
The call centre worker?
£2,000 for achieving objectives in the call centre role that delivers … good service? Smiling customers? No profit or, at least, a profit you cannot measure?
So now you’ve been convinced to give someone a reward for delivering nothing but smiles, whilst arguing not to reward someone who delivered millions in profitability.
Just because the bank lost billions elsewhere wasn’t their fault.
Just because the bank’s management is incompetent isn’t their fault.
Just because the bank had to be bailed out by the government with taxpayer’s money isn’t their fault.
The fact is that they were employed to do a job and deliver specific result, which they delivered above and beyond expectations.
And, even in today’s current hostile climate, if you feel a waiter or housekeeper deserves their tip, that a call centre worker in a retail business deserves their annual bonus for achieving objectives, then you also agree that a branch teller deserves their reward, as does the investment banker.
Just because the scale of these things is massively different, is no argument to deny someone their due.
Just because the bank’s management is incompetent, is no excuse to break someone’s employment contract.
And just because the taxpayer is shelling out to pay for such incompetence is no reason to go on a witch hunt of those people who did their jobs with honesty, dedication and tenacity.
So stop whinging about bank bonuses and start focusing upon who should be made to pay.
Who’s that again?
Oh yes … the management.