tag:blogger.com,1999:blog-4169740113013066976.post5801079423046829368..comments2024-02-10T12:12:06.028+00:00Comments on The Real Blog: It isn't just bankers' bonuses - it's ALL bonusesDavid Boylehttp://www.blogger.com/profile/11410159311875228620noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-4169740113013066976.post-62739052872678567482013-10-19T12:29:45.144+01:002013-10-19T12:29:45.144+01:00...or simply the science of the negative feedback ......or simply the science of the negative feedback loop.<br /><br />You can't buck the 'math' [sic].<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-46181390124757746722013-10-19T11:22:15.141+01:002013-10-19T11:22:15.141+01:00Compromiser!Compromiser!David Boylehttps://www.blogger.com/profile/11410159311875228620noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-61567041833266304482013-10-18T21:28:51.301+01:002013-10-18T21:28:51.301+01:00That exchange sums up the problem. How do you ince...That exchange sums up the problem. How do you incentivise staff and reward performance, while avoiding distorting the business for the worse. <br /><br />Soviet communism demonstrated the dangers of removing all incentives. Bankers bonuses demonstrated the other extreme. <br /><br />Simply paying by job description is neither effective nor fair, just as paying teachers for being old rather than good is an outrageous anachronism the current coalition might finally end. <br /><br />All judgements in the real world benefit from a subjective element, if only as a sanity check. Bonus formulae typically lack that. <br /><br />Even if you do have a subjective element built into to your business decisions, if those in a position to make those judgements benefit from going along with the game, all is lost. <br /><br />The systemic problem of the UK banking system in the 21st century is surely shortism. When the motivation for short term profits goes all the way back to the shareholders, it is hard to it changing substantially in the near future. <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-75996905604125311012013-10-18T15:12:52.502+01:002013-10-18T15:12:52.502+01:00Oh, and what about commission? Is that to be ruled...Oh, and what about commission? Is that to be ruled out too?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-33787491675481061292013-10-18T15:08:04.014+01:002013-10-18T15:08:04.014+01:00But 'different pay grades' are just perfor...But 'different pay grades' are just performance-related pay, which you said you are against. <br /><br />So are you fine with performance-related pay (and, by extension, bonuses) as long as it's based on some sort of fuzzy assessment by a manager of 'how good someone is', instead of numbers?<br /><br />Is your real issue not with bonuses, but with using numbers for measurement, on the grounds that any numerical value can be gamed (which is true)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-28018437612800157272013-10-18T15:00:09.690+01:002013-10-18T15:00:09.690+01:00I don't see any problem with having different ...I don't see any problem with having different pay grades. The problem is how you evaluate who should be in them. If it is based on numerical approximations then you will skew the result.David Boylehttps://www.blogger.com/profile/11410159311875228620noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-60268727827223601482013-10-18T14:44:21.562+01:002013-10-18T14:44:21.562+01:00Okay. So how do you stop someone who is better tha...Okay. So how do you stop someone who is better than their colleagues leaving for a higher-paid job at some other company, if you're not allowed to increase their pay to reflect their better performance?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-21302173184385707052013-10-18T14:22:01.527+01:002013-10-18T14:22:01.527+01:00That's right. Performance related pay is unfa...That's right. Performance related pay is unfair at the bottom and simply distracting and, at worse, subverting, at the top.David Boylehttps://www.blogger.com/profile/11410159311875228620noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-27912273581468644082013-10-18T13:03:07.934+01:002013-10-18T13:03:07.934+01:00Bonuses are just performance-related pay. I assume...Bonuses are just performance-related pay. I assume you're against all forms of performance-related pay, then (as from what you write you think that measuring performance is impossible)?Anonymousnoreply@blogger.com