A summer of discontent for Middle East bankers disappointed by bonuses
Bonuses were a source of sadness and frustration for almost half of Middle Eastern finance employees last year, a survey has found.
About 45 per cent of those interviewed by eFinancialCareers, a job site, said that their bonus failed to meet their expectations, compared with only 9 per cent who received bonuses greater than they anticipated.
But this comes as no surprise to Martin McGuigan, the head of reward consulting at Aon Hewitt Middle East.
“I have yet to meet a client or employee who is paid what they think they’re worth,” said Mr McGuigan. “It’s plain old human nature to be expect to make more than you are actually worth.”
Given that the average salary in the Middle East for analysts in an entry-level investment banking role ranges between US$70,500 and $102,250, according to the employment consultancy Robert Half, why are so many bankers so unhappy with their earnings?
“A well-run system should leave some people unhappy,” said Mr McGuigan. “There should always be people who are at the bottom end of the scale – the whole point of an incentive structure is to differentiate between high-performing employees who should be paid more, and those who need to be sent a signal that they need to improve their performance.”
It is also unsurprising that money motivates those in finance more than the rest of us.
“Variable pay has more of an impact on [employee retention] in the financial industry than other sectors. People who are disappointed [with their bonuses] are more likely to get a career change in order to get [the pay] that they want,” said Mr McGuigan.
Bonuses are also a way to compensate for life in the financial sector’s major disadvantages.
“[Banks] are ruthless in terms of performance delivery,” said Mr McGuigan. “You have no job security. If you’re not bringing in the numbers or pulling clients in, you won’t have a job in a few months. So there is a risk-return game there – less well-paid jobs will have much more security.”
If you are working every hour, have no family life and do not get a bonus that reflects the effort you feel you have put in, it is easy to see what that would be disappointing, he said.
An insight into this mindset can be found in Liar’s Poker, the 1989 memoir of the financial journalist Michael Lewis, in which he describes life at Salomon Brothers, a now-defunct Wall Street bond trading firm.
“Being paid was sheer misery for many,” wrote Mr Lewis. “The amount of money you were paid … was the final summing up.”
“People responded in one of three ways when they heard how much richer they were – with relief, with joy, and with anger. Most felt some blend of the three. A few felt all three distinctly – relief when told, joy when it occurred to them what to buy, and anger when they heard that others of their level had been paid much more.”
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Published: May 1, 2014 04:00 AM