The pernicious effects of the bonus culture are beginning to pervade the wider economy –- and often in the places where they are least appropriate.

The same students who unearthed information about the magnitude of bonus payments to managers in contract to payments to the state and to shareholders (see ‘Bonus+bankers=bonkers’) pointed out how wide the practice has become. The Olympic Delivery Authority, Railtrack, the NHS, the BBC and Ofcom are all organisations which are fully embracing the bonus as means of ‘rewarding’ staff – yet curiously none of these organisations makes a profit. None of them have the rational economic yardstick of profit – or even independent cashflow – on which to base a bonus calculation. Yet each is giving its senior staff the chance to add around a third of basic salary to take home pay just for doing their jobs adequately.

The reasons for this are manifold. They include at least: a spurious comparison between the values and purpose of the public and private sector; an invidious tendency to avoid collective responsibility by using ‘remuneration consultants’ to fix salaries; the fatuous use of the phrase ‘world-class’ in describing both jobs and organisations; and the wholly illogical use of ‘benchmarking’ to align organisations no matter what they are or what they do or how they do it. Add to this the inordinate greed of many senior managers and you have a recipe for escalating ‘packages’ which have no foundation in reality or ethics of commonsense.

And just what can anyone do when even the Financial Services Authority adds £33m to its pay bill by paying bonuses to senior staff (in 2008/9 among 2800 of them) ?

Quis custodes custodiet?