Small Consolation

I admit to spending a fair amount of time thinking black thoughts about the difficulty of creating a pay system that will work for 1.9 million-odd people, the difficulty of communicating about federal pay to the general public, and the difficulty of figuring out, in an empirical and fact-based way, what kind of pay motivates people and how much it motivates them. So I admit that it makes me kind of happy to see that, once again, sturm und drang is gathering around Wall Street compensation, particularly for the firms whose pay plans are subject to Kenneth Feinberg's approval. The things the firms are saying sound awfully familiar:

For a short time, banks had stopped offering guarantees, after the financial crisis turned their profits into losses and as Washington began to scrutinize their use of public money. But now, with banks apparently rebounding after two consecutive profitable quarters, some have resumed the practice, arguing that such bonuses are needed to attract and retain top performers.

Some of the biggest bonus commitments are being made to bond sales staff workers and traders in currencies and derivatives, and to computer programmers and others who support those operations. Trading has been the main source of the banks' recent profits.

The first firm or agency that can prove that its compensation system is actually "needed to attract and retain top performers" should probably get to go ahead with said system. Otherwise, that phrase and its variants are in danger of becoming meaningless.