Yes – it’s that time of the year again. No – not Christmas trees, carols, frenzied shopping sprees, boozy corporate parties and stuffed turkey dinners.
For most investment bankers, the season of goodwill takes an altogether literal meaning.
Goodwill – or intangible, excess value – neatly sums up what happens behind the scenes in the last quarter of the calendar year.
The long-awaited bonus – and promotion – period is just around the corner, as the globe’s financial luminaries get assessed for how much they have (or are perceived to have) produced in the year.
The process is not entirely fair and disproportionally rewards senior ranks. How discretionary payments are determined is often clear as mud, even though formal procedures are established to lend a veneer of even-handedness.
In practice, it’s a top-down approach with a bonus pool determined by the powers that be, and that, in turn, is allocated across global and regional departments. This often involves self-assessment by each recipient across a variety of criteria dreamed up by HR consultants. As one can imagine, this is as far removed from a Mao-style auto-critique as possible – it’s about communicating how great, indispensable and visible you are.
Importantly, it normally also involves a 360-degree review by direct reports, peers and managers, although the assessors will often be identified for this purpose by the recipient, which somewhat negates its effectiveness and can become a mutual back-scratching effort.
