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The cost of capital being what it is, the lower one can make that commitment cost base, the better. | The cost of capital being what it is, the lower one can make that commitment cost base, the better. | ||
All of these desired outcomes arrive at the same conclusion: keep basic pay as low as possible, and reward people with a big fat annual bonus. Financial services bonuses can be three, four, five, or ten times the size of the basic pay. | |||
This is excellent news for Randian raw-meat eating cannibal types, but has its downsides too. | |||
You can always offer staff the carrot of annual pay rises, but this has a ratchet effect: a servant whose work quality declines over time cannot really have her pay reduced — employment regulation makes this procedurally difficult. So payrises tend to be anaemic, hedged about by concern for the firm’s cost base should the business environment deteriorate. | You can always offer staff the carrot of annual pay rises, but this has a ratchet effect: a servant whose work quality declines over time cannot really have her pay reduced — employment regulation makes this procedurally difficult. So payrises tend to be anaemic, hedged about by concern for the firm’s cost base should the business environment deteriorate. |