I want a bonus!!

It's probably the hottest topic in the world at the moment and particularly in my office. Bonuses!! Should we get them? This topic is a politicians dream, they can show anger and parade like a performing seal to their audience with no fear of retribution. Or can they? We've seen in recent weeks the anger of Obama and Brown over bonuses given at semi-nationalised companies like AIG, Lloyds, RBS and co. The thesauruses have been working over time with adjectives like disgusting, disgraceful, disrespectful.

I agree to a certain extent. I mean, why should they get a bonus, some of the executives obviously didn't do their job well. However, as with all things, it's not really that black and white. We see in the papers talk of millions and billions and I know I personally can't really put it in to context.

This isn't want I wanted to bring up though. The headlines would have you believe that all this money is going to big time executives (AIG haven't yet released where theres is going) but the truth is somewhat different. Lloyds for example, the executives had all ready given up their bonuses long before the government 'bail-out' and the pay out was for frontline staff earning not much more than the minimum wage. I'm sure in this time of recession they were very grateful of the hyped headlines which cost them there little extra in a time of need.

The underlying problem of this is that there is no fairness in the system. I think if you fail to meet you're targets then you should get nothing, no matter your level. However, if you make all your targets then you should get your bonus. Whether it's government owned shouldn't be an issue. I'll give an example, If I was the managing director of Lloyds retail at this moment I'd be pretty dejected. In a tough year they managed to make a £3bn profit (got lost in the healines). They did everything asked of them and more. Why shouldn't they get their bonus? That's how incentives work.

This brings my last point. People work in banking essentially for the monetary incentives they can get. So when you take away the incentive, they will either leave to find a new incentive or reduce their level of performance. Either way you lose a potentially skilled resource. This is why alot of government projects are so ineffective. The majority of the really skilled people in society work in the private sector.
If the governments really wants comapnies like AIG, RBS and Lloyds to be profitable you have got to run them like a private company and bonuses are an unfortunate side effect of this. Yes, try and stop bonuses going to specific indviduals who don't perform. Yes, take out legal obligations to bonuses (is this a bonus or pay). Don't punish everyone and drum up public hype of the issue.

Before I get a pile of comments, I didn't lose my bonus because I wasn't eligible for one this year.