Following numerous debates surrounding bankers ‘huge’ bonuses, EU regulations banning banks from paying employees bonuses of more than 100 per cent their annual salary came into effect on the 1 January. However, these bonuses still appear to be a hot topic.
Although bankers deserve to be rewarded for their hard work, it is a common belief that the sheer amount they are being rewarded is unnecessary and could be put towards better use. Banks justify the figures with claims that the individuals being rewarded are playing a major role to the growth of the UK economy but it was high City pay that triggered the financial crisis in 2008 and if this is the case why aren’t other major contributors such as SMEs, retailers and tourist destinations receiving the same reward?
It appears the banks actually have an ulterior motive. The reason they are so concerned with the amount of money their staff receive in bonuses is because they feel they have to match their competitors to avoid losing them to banks further afield. Maybe it could therefore be argued that bank bosses are more concerned with the success of their firm than the progression of our economy meaning their bonuses are based on greed.
Another set of bonuses were in the news last week, this time in the retail sector, with the announcement that John Lewis and Waitrose were to give all 90,000 of their workers a 15 per cent bonus, which is equivalent to eight weeks of their pay. So the question stands, is this okay?
Firstly, the workers are receiving an extremely reasonable sum of 15 per cent of their salary, a figure that most bankers would turn their nose up at and secondly every single member of staff, regardless of their position, is receiving the same percentage, unlike the hierarchical structure of city bonuses.
In addition to this, the bonuses have come as a total surprise to the John Lewis and Waitrose staff, making it highly likely that they will boost staff morale, motivation and therefore productivity which can only have a positive impact on the company’s figures. Bankers’ bonuses are now somewhat expected and are less likely to have this effect.
There is absolutely nothing wrong with a company wanting to share its success with its staff, in fact this spirit is a great one to have and one that should be seen more often in businesses celebrating a rise in profits. Although it is clear to say that John Lewis and Waitrose have made a very savvy PR move here, with the news likely to attract more people to the firm.
When it comes to bonuses and their PR perception it’s safe to say that the John Lewis example confirms industry and bonus size play a significant role in whether you will be praised or scorned.