Employment derivatives: Difference between revisions
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{{a|myth|{{image|Ironmountain1|jpg|}}}}{{d| | {{a|myth|{{image|Ironmountain1|jpg|}}}}{{d|employment derivatives|/ɪmˈplɔɪmənt dɪˈrɪvətɪvz/|n|}}A financial instrument developed in the early part of this millennium by derivatives pioneer and perennial boiler of pots, {{author|Hunter Barkley}}. | ||
A financial instrument developed in the early part of this millennium by derivatives pioneer and perennial boiler of pots, {{author|Hunter Barkley}}. | |||
When midway through his customary annual rant about the meaningless of his life and meagreness of his pay packet, it struck Barkley — an amateur [[fi-fi]] novelist and financial services naturalist — that just as the variable cost of his own employment was a material, unhedged contingency in his own life — Barkley believed himself, rightly, to be short a very ugly [[option]] to the Man — so too was everyone else’s in including, on the other side of the trade and at far greater scale, his employer’s. | |||
A good-sized bank, he reasoned, would have an annual ''variance'' in employee compensation, without accounting for any ''changes'' in employment, in the billions of dollars.<ref>The maths was like so: assume 40,000 people at an average total compensation of about $300,000, with a ratio of discretionary to fixed of between 20% and 50%</ref> | A good-sized bank, he reasoned, would have an annual ''variance'' in employee compensation, without accounting for any ''changes'' in employment, in the billions of dollars.<ref>The maths was like so: assume 40,000 people at an average total compensation of about $300,000, with a ratio of discretionary to fixed of between 20% and 50%</ref> | ||
This ''variable'' cost of employment had little to do with the bank’s own performance, let alone that of its employees, and a lot to with ''everyone else’s'' performance. A firm having a bad year while its competitors feasted had no option but to hike pay to stop flush rivals piratically raiding its meagre stocks of [[human capital]]. By the same token, a firm that was knocking the ball out of the park while its competitors floundered, did not need to pay its own staff outsized bonuses. Where were they going to go? | This ''variable'' cost of employment had little to do with the bank’s own performance, let alone that of its employees, and a lot to with ''everyone else’s'' performance. The ''market''. Hence [[Human resources|human capital management]] staff are apt to talk about “benchmarking”, as if there is some indexed rate. | ||
''Perhaps there should be'', reasoned Barkley. | |||
A firm having a bad year while its competitors feasted had no option but to hike pay to stop flush rivals piratically raiding its meagre stocks of [[human capital]]. By the same token, a firm that was knocking the ball out of the park while its competitors floundered, did not need to pay its own staff outsized bonuses. Where were they going to go? | |||
Legend has it, upon being timorously asked for a raise, the [[Vampire Squid]]’s fearsome [[GC]] would theatrically throw open a draw with all the unsolicited CVs she had collected in the last week. “I am sure we’ll find someone to do your job if you’re too good for it.” | Legend has it, upon being timorously asked for a raise, the [[Vampire Squid]]’s fearsome [[GC]] would theatrically throw open a draw with all the unsolicited CVs she had collected in the last week. “I am sure we’ll find someone to do your job if you’re too good for it.” | ||