Wednesday, 30 July 2008
The Poison of Bonuses
I worked in the financial services sector of the City for nearly 40 years, and from the 1980s onwards was increasingly astonished at the offering of US-style bonuses for doing an honest day's work. Such bonuses serve to skew individuals' performance towards a particular easily identified course of action - usually involving more risk - but more importantly are likely to erode people's personal values. Our work is performed as our duty to ourselves, our families and our colleagues and we should discharge it to the best of our ability at all times. We should not need the carrot of more money to do a difficult job; we do it because it is our job. Sometimes one just happens to be in the hot seat at the relevant time; if we weren't any good, we wouldn't be there. The chap at Barclays said to be getting additional compensation for finding outside capital is also just doing his job, and should need no more of shareholders' funds than his normal pay for doing it. To offer people large bonuses is to insult peoples' characters.