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City pay and bonuses is balancing act for HR

Executive pay is firmly under fire again, with the prime minister and most of the country angered by the 'morally and economically outrageous' decision by RBS to even consider paying £1bn in bonuses after taking billions of public money.

And with the public mood around bank bonuses fuelling pressure for individuals to waive their payouts, the call to review and reassess pay structures (former bank chiefs admitted the bonus culture had contributed to the crisis) has rocketed up the agenda.

There's no doubt that banking pay in some areas of industry is way too high, yet the 'world's worst banker' Sir Fred 'the Shred' Goodwin warned that bankers would leave if they were not paid enough.

Our lead story this week echoes those concerns and shows HR's somewhat fearful reaction to the prospect of tougher regulatory control and questions whether it will actually help tackle the problem of excessive pay.

With the UK's reputation firmly dented and strong accusations that banking boards are not up to the task anyway, HR will be under increasing pressure to help find the talent the country needs to get us out of this mess.

You can bet the search will have to be much further afield than the UK as 'good' bankers fear intense scrutiny and fail to come forward for the top jobs. HR and reward specialists will have no easy task ensuring there is an 'alignment of risk and reward' in City bonuses and balancing out fair compensation with what attracts and retains top talent when rewards for failure are clearly no longer acceptable.

Dawn Spalding |

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