Thursday, October 1, 2009
1 On what grounds might one justify a large bonus?
2 To whom might one offer a justification?
Firstly, one could argue that the size of the bonus itself, or even a larger sum, had already been earned for the employer. This could then be seen by the employer as a "no cost" expense. The employer already had the bonus, because of the past actions of the employee.
There are many problems with this justification. Even if the employee had "earned" the bonus, many of his/her colleagues, including the office cleaners, had contributed to this earning. Put differently it is a mistake to see this earning as simply an individuals achievement. Further, it is unlikely that the many colleagues will get the same level of bonus if they a lower in the firms hierarchy. Indeed the cleaners may get nothing above the minimum wage.
From the employers point of view the past monies brought in by the employee, may be less salient than the size of the firms bank loans. Where these bank loans cannot be repaid, the paying of large bonuses may hasten bankruptcy, and consequent unemployment.
Secondly, it is very unclear to whom one should justify these large bonuses. To ones family, ones colleagues, ones employer, ones friends; the list can be extended.
In the case of the family the increase in wealth may lead to increased expenditure on leisure , private health education etc.. Should this years bonus not be repeated in future years this can cause much family distress and argument.
Justifying to ones colleagues may not be possible if there is a Prohibition on disclosing this information to colleagues. And if one does disclose, it may cause resentment, and affect the team culture.
Justifying to ones employer may, or may not, be necessary. These meetings may well be confidential, and hide what can be quite acrimonious discussions.
Justifying publicly may require public relations firms, and their costs.
All these difficulties and more, do no stop large bonuses
What will? Alastair Darlings imposition of Pittsburgh Agreements?