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-{{a|hr|}}{{d|{{PAGENAME}}|ˈlɔɪəlti ˈdɪskaʊnt |n|}}The great falsification of the [[human resources]] dogma.
+{{a|hr|{{image|Loyalty Discount|png|}}}}{{dpn|/ˈlɔɪəlti ˈdɪskaʊnt/ |n|}}{{Quote|“Our people are our most valuable asset.”
+— Every [[human resources]] department ever.}}For the miscellany of the [[HR]] military-industrial complex — salary bands, [[forced ranking]], gerrymandered [[performance appraisal]] system — all militate ''against'' the idea that staff are are a precious resource. These are lined up to ensure that, through time, an employee’s [[Compensation|pay]] will decouple from, and then trail, the value she offers her firm.
-For the strictures of salary bands, [[forced ranking]], gerrymandered [[performance appraisal]] system — all the great apocrypha of the HR canon — mean that through time a given employee’s [[compensation]] will decouple from whatever value she offers the firm, however meagre.<ref>As we have remarked elsewhere,we take it is more or less axiomatic that all employees contribute some positive value to their organisation. Except for those ones who manage to remain on the payroll despite extended leaves of absence.</ref>
+That is, loyalty to the firm is progressively ''penalised''. If they get pay rises at all, they are anaemic. Accompanying protests of iniquity are shrugged off with the two-way optionality that HR managers know they are long.
-Over time, those who remain loyal to the firm are ''penalised''. The only way to correct this — to [[mark-to-market|mark yourself to market]] — is to [[lateral quitter|join a competitor]].
+“As part of infrastructure, you don’t share in the ''upside'', but you’re protected in a down year” [[Human resources|HR]] will say, in a good year.
-To be sure, salaries may drift upwards, decade by decade, courtesy of HR’s finely honed calculus, which 8s predicated on abstract value: a director is worth more than an associate director; a good associate director should be paid more than a bad one. All true, and fair, in the abstract, but this is to impose the tyranny of the average on everyone.
+In a bad one, they will tell you, “we’ve managed to minimise the [[RIF]], but we’re still under a 15% [[cost challenge]], so — just to manage your expectations, you’ll do well to be flat”.
-The managed world loves its archetypes. Just as the common law has its reasonable person, economics its rational one, the boxwallahs of personnel have their average employee.
+Now none of this is to defend, much less justify, city pay levels. Should we shed tears about relative disfavour among a group as systematically overcompensated as city drones? We should not. And we do not. But still, we should understand the [[systemantic]] forces at play.
+Fundamentally, the allocation of financial capital — which is the sum total of what the financial services machine, at its most basic level, does — is a risky, important and therefore valuable thing. Markets that most effectively allocate capital do best. In any case, those who are good at it stand to make a lot of money. This will not change. Effective capital allocation is worth paying for.
-But there is no average employee. It is an emergent property of an unstable group. It includes the young savant, who will be catapulted out of the cohort to bigger, brighter things, and the [[weak gazelle]] who should insh’Allah, be torpedoed from it. Neither will be there in a year's time. Yet [[HR]] insists on drawing an average from these varying trajectories and holding everyone to it.. No single employee at any time has both characteristics. -one at the firm operates in the abstract
+The [[JC’|JC’s]] operating premise is that those who do get to do it do ''not'' do nearly as good a job of it as they should. Our [[roll of honour]] refers.
-{{Sa}}
+If the system rewarded excellence, not mediocrity, perhaps fewer shitstorms would happen. So — with the caveat that, sure, everyone gets paid too much — we ask here a different question: how do we allocate pay more effectively? Resource allocation is, after all, what the industry is meant to be best at.
+===Mediocrity drift===
+The longer good staff stay, the worse, generally, they are treated. Their only means to correct this — to [[mark-to-market|mark yourself to market]] — is to [[lateral quitter|leave]]. This seems a bit mad.
+To be sure, salaries may drift upwards, decade by decade, courtesy of [[HR]]’s finely honed calculus, predicated as it is on abstract, but unshakable logic: a director is worth more than an associate director; a good associate director worth more than a bad one, and so on. All true, and fair, in ''the abstract'', but here is the thing. Employees don’t ''work'' in the abstract. Only [[averagism|averages]] do.
+But the [[Modernist|modern]] world ''loves'' its archetypes. Just as the [[common law]] has its [[reasonable person]], economics its rational one, the boxwallahs of [[personnel]] have their average employee.
+But ''there is no average employee''. This abstract average is an emergent property of an unstable group.
+It includes the young savant, who with rude haste will be catapulted out of the cohort to bigger, brighter things, and the [[weak gazelle]] who should, insh’Allah, be torpedoed from it in the next [[RIF]]. Neither will be there in a year’s time. Those who mulch around the median have different skills, different attributes, bring different sets of tools to the table.<ref>Well, ''theoretically'' they should. Whether they ''do'' the firm’s recruiting methodology allows this is another question. If you only [[Diversity|hire]] Russell Group grads and laterals with [[magic circle]] experience, we are talking about you.</ref> Yet [[HR]] insists on drawing an average from these varying trajectories and holding everyone to it. This average is a blended emulsion that reflects nothing about any of them.
+To fit individual performance to an average — this is what forced ranking does — rather regarding it as an individual pathway, is a kind of [[ergodicity|ergodic switch]]. Each of those individuals has its own life history: a vapour trail, a trajectory, a unique collection of skills, foibles and attributes which the individual sorts, tests, burnishes and rejects. The individual who stays at the organisation adapts to it in a way an abstract average can’t.
+{{sa}}
+*[[Employment derivatives]]
+*[[Ergodicity]]
 *[[Lateral hire]]
 *[[Lateral quitter]]
 *[[Mediocrity drift]]
 {{Ref}}