Compensation: Difference between revisions

{{def|Compensation|/ˌkɒmpɛnˈseɪʃən/|n|}}Investment banks are equally good at hyperbole and euphemism, the latter being a sort of inverted hyperbole, [[calculated]] to make the unseemly seem chaste; the trivial important, the quotidian grandiloquent and the ignoble dignified. Bankers are at their creative best when discussing their own pay. Of their number, none are more given to euphemism, and indeed hyperbole, than the good people of [[personnel]] or, as they like to think of themselves, ''[[human capital management]]''. You see? They can’t help it.

But ''is'' it? Every [[agent]], however devoted to its [[principal]], has against it the same, aligned, common interest: that, whatever happens, it should continue to be ''needed'', and therefore ''paid''. Do not forget that such a fellow, like the one who hotly insists on imposing gardening leave upon departing colleagues, is, at one remove, talking {{sex|his}} own book. This is the [[agency]] problem.

And plenty of organisational psychologists have identified better, more plausible drivers for optimised productivity and excellent performance than the discretionary bonus. {{author|Daniel Pink}} has made a fair bit of his own compensation making this very point. Superficially, it is easy to understand why this might be so: the simple amount of energy, infrastructure and human ''effort'' that goes into figuring out, down to the dollar, who gets what in itself occupies a month or more of the collective assembled’s time. Here is the proof of the [[AI]] pudding by the way: if you think a banker would entrust ''any'' part of the compensation allocation process to an algorithm, you have profoundly misunderstood the nature of the beast. And nor can the obsessive secrecy that surrounds compensation be in anyone’s interest. Nor is it consonant, really, with the loudly professed commitment to [[diversity]] of pay and conditions.

There is an irony here: you should not underestimate the care and precision with which pay is allocated and promotions are managed at an investment bank. Fastidious does not begin to describe it. Every detail is benchmarked, cross-checked, cross-ruffed, socialised, graded, forced to a curve, scatter-analysed, pivoted, double-blind tested and haggled over. And over this, [[Personnel]] and its paramilitary wing the office for [[diversity and inclusion]] preside. They run this process, with an iron fist. They are utterly fundamental to it, and always have been. From the perspective of natural justice, procedural fairness, human rights, equal opportunity — it is quite unimpeachable.