Loyalty discount: Difference between revisions

{{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.

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.

“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.

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”.

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.

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.

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.

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.