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We have all heard more than enough about bonuses over the last year. The numbers are astonishing and to the vast majority of people who may be struggling simply to pay their bills the amounts of money paid out by financial companies in bonuses is offensive.
I don’t think people object to the principle of bonuses as a reward for exceptional work but many of these huge bonuses seem to be paid out just for turning up at work and doing the job these people are paid to do.
It is often argued that large bonuses are essential to retain the highly qualified staff these companies need. We are told they are the best people in the world and they need to be rewarded to keep them working in the UK. To which I say, if they are the best people in the world how come we suffered so badly from the financial crisis? It seems they were just following the herd and investing in what everyone else was investing in and they all got burned and took us all down with them for their foolishness.
Are bonuses essential?
Let me tell you a story of success and how bonuses are not always what drives people to great achievements. For those not familiar with Formula1 motor racing let me tell you about Jenson Button.
Jenson has been racing karts and cars for twenty years. In his early career he was racing on a shoestring budget largely supplied by his father and a few helpful sponsors. He achieved success regardless and was eventually offered a drive for the Williams F1 team where he demonstrated his skill in his first year coming 8th in the world championship.
He moved to a different team but had little success driving a car that wasn’t good enough but he had occasional flashes of brilliance but invariably the car was letting him down and denying him the chance to shine.
Next year he moved to another team where he has stayed ever since. The team was taken over by Honda who put a lot of money into the team over several years but the team struggled to provide a car good enough to win and after a few years Honda decided that because of the recession and the huge costs involved in motor racing they would pull out of F1. The team was put up for sale but no buyers could be found and the team looked like it was finished. Jenson Button could so easily have retired from the sport after ten years of struggle.
When the new year dawned there seemed little prospect of the team surviving. The team principle by now was Ross Brawn, a man with a remarkable success record for building strong teams and achieving success and he was determined to find a way to help the team survive.
Through the winter the team struggled to find the huge amounts of money needed to run a formula one team and eventually they succeeded and the team to be known as BrawnGP appeared out of the ashes of the old team. The new team needed to be run on a shoestring budget compared to previous years and they had to they laid off over two hundred staff and do anything they could to reduce costs.
Contract details are obviously confidentialbut it is rumoured that Jenson Button took a 50% pay cut to help reduce costs and stay with the team for the 2009 season. He could very likely have got a drive for another team and earned a lot more money but he wanted to achieve success for the team that he had worked so hard with for several years.
Now, Jenson Button is Formula1 World Champion. He wasn’t driven by getting big fat bonuses, he was driven by a hunger for success for himself and his team.
This is what commitment means and it isn’t earned by bonus payments. Would Jenson Button wish he had driven for another team and got a million pound bonus for every race he won this year? I don’t think so. In his travels around the globe for the race meetings this year he has paid his own fares and has apparently flown Easyjet more than once.
This is not a story of someone living the rich, flamboyant lifestyle of the rich and famous. This is a story of determination, ability and hard work. It has all paid off for him and he is a worthy champion and a credit to British sport.
So do we need to pay big bonuses to bankers and financiers to achieve success? No, we need to motivate them to want to do well for themselves and for the company they work for. Give people the opportunity to achieve success and be proud of themselves. Bonuses make people more interested in the money than they are in any loyalty to their company.
Congratulations Jenson Button, World Champion and an example to us all.
