From Martin van Raay
Cheating bankers always prosper, says Mark Buchanan (19 March, p 30). One reason for this is that they control their own bonuses – a privilege most employees don’t have. A solution might be to give every employee the right to decide their own salary and bonus.
Inevitably, everyone would want to award themselves top dollar, but before long they would realise this was impossible. Then they would all get together and determine what they could spend on salaries without hurting the company, and how this should be divided among the various jobs.
Toyota negotiates with its suppliers this way, and it seems to work.
From Bryn Glover
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I applaud Buchanan’s attempt to find new ways of controlling our greedy bankers, but I suspect his ideas will merely present them with new challenges to circumvent. I prefer a more radical solution, but one for which there is already a long-established and successful precedent in the UK’s National Health Service.
More than 60 years ago, in the teeth of virulent opposition from the medical profession and at a time when our national debt was in real terms about three times what it is now (we had just fought a war), Clement Attlee’s government overrode all opposition and established the NHS based on principles of access which have never been seriously challenged. I propose an equivalent National Banking Service, in which all the banks are taken fully into public ownership.
Bankers would be placed on civil service pay scales, and bonuses would be completely abolished. The encouragement to perform well would be the same as that in the NHS: the sense of satisfaction of a job well done, coupled with the threat of disciplinary action or dismissal hanging over those who performed badly.
The main argument against the idea is exactly the same as the one that was levelled at Attlee’s minister of health, Nye Bevan: if you impose such a monstrous regime, all the best people will leave and practise elsewhere. Bevan’s response was simple. He called their bluff by stating that if the top-level practitioners left there were many others equally competent who would be willing to step up to take their place.
His high-risk tactic worked. Within a few weeks, the British Medical Association recognised the fallibility of its resistance.
Cracoe, North Yorkshire, UK
From John Gledhill
Performance-related bonuses only really work for jobs such as sales or income-generation with quantifiable outcomes (9 April, p 40). For general management the concept is perverse.
Until it was abolished, the performance-related bonus system where I worked was totally counterproductive. Targets were set a year in advance, with points attached to each. This meant that by about the mid-point of the year, I and others ended up doing tasks that were no longer relevant or even desirable, just to ensure that we wouldn’t miss out on the available points and therefore get a lower bonus. Any new tasks, however urgent and necessary, that had arisen since the target list was agreed were relegated to low priority, as they conveyed no financial benefits.
This created tensions for everyone. It was a stupid system, but not at all unusual. Needless to say it was devised by management experts.
Wellesbourne, Warwickshire, UK
Culemborg, The Netherlands
