A very suitable line for all the bankers who've survived the recession because they were bailed out by the Government. What's more they seem to be echoing the refrain and,as the Irving Berlin song goes on to say, "Lets face the music and dance", they seem to be doing exactly that. In the face of massive criticism some of the banks are awarding huge utterly inappropriate bonuses forgetting entirely that the reason they've returned to profit has little to do with performance and everything to do with the shareholder funds that have been put at risk.
Profit always was about generating a return on investment - for - wait for it, the investors! Performance related pay has always been a very iffy incentive. ANYBODY who has read Herzberg knows that money is not a motivator at all! (read it, lack of money is a demotivator). Sales staff work best of all when facing realistic targets and with incentives that encourage the long term view. Sometimes up to 10 or 15% of income may be tied to performance when it can be directly attributable. Any more is in fact counter productive.
The same goes for fundraising investment. It's a no to performance related pay but a big yes to appropriate incentives to reward genuine effort, creativity, effectiveness and carefully assessed risk taking.
You heard it here first. The world is, I'm convinced, about to rediscover Frederick Herzberg (http://en.wikipedia.org/wiki/Motivator-Hygiene_theory for a quick and dirty explanation).
No comments:
Post a Comment