The hidden meaning of banking bonuses
Whether you've already received your bonus or are about to, you'll be having some big thoughts about the implications. For example, what does it mean to be paid flat? What does it mean to be paid 20% up?
Reading your compensation is an art. There are all sorts of things that determine your number: your absolute performance, your performance relative to your industry peer group, your performance relative to your peer group within the firm. Your number is a complex signal and you need decipher it.
Before you can understand your bonus, you need to know what you deserve. If you don’t know what you should be getting paid, something is wrong. You have to know the price talk. What are your peers getting? Only then will you be in a position to understand whether your boss paid you fairly.
There's always a sweet-spot. If you've been paid properly, your bonus will be somewhere between your, "I’m happy" number and your, "I’m really mad about this" amount. Don't mind if number is at the lower end of this spectrum: it means your boss is doing her job. A little unhappiness is motivating: you'll work harder to prove you deserve more. The best bosses will have given you guidance in Q4 to prepare you for slight disappointment.
You also need to consider how much you were paid last year. If you're below 30, you should be getting paid up. Your absolute number isn’t large and you're growing in ability. For this reason, if you're aged 30 or less and you're being paid flat down to down it's a problem. Something is broken. This shouldn’t be happening. Not yet.
If you are a few years over 30, it’s different. Your bonus is bigger. It's more tied to the industry, to your division, to your group. This is when you really need to do some careful calibration. Even so, if you are kicking butt you should be getting paid up. If you're not, you need to take action. How can you more closely align what you are doing closer to what the firm, division, or group needs?
If your bonus is lower than it should be on all counts, what it really means is that you're not talking loudly enough. In banking you need to communicate your successes: the squeaky wheel gets the oil. Your boss's job isn’t to pay you more. It's to pay you as little as possible so you don’t quit. Don't take it personally. Do ask for more. Outline why you deserve it. And don’t accept no for an answer. I have literally seen bonus numbers for the current year get adjusted.
You won’t know if you don’t ask. A small bonus means you're too silent. Be squeaky.
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