We must abolish the evil bonus culture!

It\’s appalling isn\’t it? This expectation that people have for a bonus, simply for doing their job? Why can\’t they understand that they simply get paid a wage to do it? And we all know that the bonus culture is what has led to the wrack and ruin of our economy.

No, I\’m with Polly. We must indeed wipe out this foul practice, we must indeed make sure that bonuses are forever wiped from our country and economy:

The annual bonus paid to John Lewis\’s 70,000 staff has shrunk by almost a third after profits at the partnership were hit by the recession.

But staff still cheered the news that they will receive a bonus of nearly seven weeks\’ pay, down from 10 weeks\’ pay a year ago.

Because John Lewis is owned by its staff, every one of them – from the boardroom to the shop floor – receives the same percentage payout. This year it is equal to 13% of basic salary for staff at the Waitrose supermarket chain and John Lewis department stores.

God forbid that such evil should spread to other areas of the nation.

6 comments on “We must abolish the evil bonus culture!

  1. The JL bonus is a dividend for JL’s shareholders, not a cash reward paid out to employees for short-term performance.

    I’m not saying Polly understands the difference – just that it’s entirely consistent to think financial services bonuses are bad because of the perverse incentives they created for managers, while supporting the JL bonuses.

  2. But the size of the John Lewis bonus is related to profits, isn’t it, John B? It’s therfore a reward for performance in the previous year. And a year, in accounting terms, is the short term – long-term liabilities are those falling due after more than a year. The JL bonus is indeed ‘a cash reward paid out to employees for short-term performance.’ And richly deserved, too.

  3. Oh, and fairly obviously, since it’s a payment to employees, it’s, er, a payment to employees. The fact that they’re also the owners doesn’t mean that they’re not also employees.

  4. For me the issue is what bonuses are paid for, not the existence of bonuses per se.
    They are paid for meeting targets of all kinds.

    The problem is that setting the correct targets is impossible and leads to unintended consequences.
    (see “Systems thinking in the public sector” by John Seddon)

  5. Seeing as bonuses are a transfer of wealth from the owners of capital to the workers, I fail to see why lefties hate them so much.

  6. Chris – but the value of the stream of future dividends is more important, whereas that’s not the case for the banker. JL management have an incentive not to take risky short-term bets that run the institution into the ground…

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