It would appear that Very Large Bonuses Attract – Very Greedy People. Now if experience tells us this is so (and certainly Alfie Kohn’s research showed that one thing that bonuses and other rewards don’t do is to lead to long-term improvement) how should we read the statements that have been made by the top British Institutions that if they don’t pay large bonuses their top earners will go and work for European or American Companies. Put these two ideas together (Greedy People and Go Elsewhere) and a super strategy for British Companies would be to – wait for it – stop paying bonuses. Bonuses might attract top earners but experience (with the credit crunch etc) is telling us that these top earners do not benefit their organisations IN THE LONG TERM (and therefore do not benefit any of their stakeholders in the long term either).So are there some British Companies out there brave enough to stop paying ‘performance related’ bonuses and to see what happens? The consequences could be very good! Not a loss at all but a gain. All the greedy earners who don’t care a stuff about the customers, will go to the competitors (hooray I hear from all those people who have suffered from all this miss-selling), leaving space for a new type of entrepreneur to take up these jobs within companies – (those with an innerpreneur mindset). Would not it be good for the long-term success of financial institutions for example if all the work was done by employees wanting to do the very best they can to give good service for past, current and future customers. Unfortunately as Kohn showed many years ago, big ‘carrots’ move the focus away from the service. The focus in the bonus culture is “what do I need to do today to make my carrot bigger (and also give me bragging rights to the biggest carrot)”. The focus should be of course be “what do I need to do today to really help my customer?”So should not our politicians be suggesting that bonuses simply STOP in order to make our Institutions better? This then leaves one question. If such an organisation goes on to make increased profit in a ‘no bonus for performance’ model, how do all the employees get to share in this success as an intended consequence? (Answers not on a postcard, but please post your suggestions here) What is a fair way to keep the focus on customer service, and to share in the benefits that accrue from being a truly long-term customer-focussed (as opposed to a bonus-focussed) company?
