"Northern Rock employees get hefty Christmas bonus"

oldbag · 4 Dec 2007 at 13:29

Not sure if this is GD or SC material, but here goes:

http://www.guardian.co.uk/business/2007/dec/04/northernrock.creditcrunch1

Hang on a minute, didn't the BOE bail them out recently? And now they are going to pay their staff bonuses? Isn't that a bit off?

meghatronic · 4 Dec 2007 at 13:32

Not really.

platypus · 4 Dec 2007 at 13:33

An above-inflation pay rise does seem at odds with their current situation. I'd hope that the government would step in to prevent this kind of thing, given how much money NR owes the BoE. Unions have too much power.

meghatronic · 4 Dec 2007 at 13:34

platypus said:
An above-inflation pay rise does seem at odds with their current situation. I'd hope that the government would step in to prevent this kind of thing, given how much money NR owes the BoE. Unions have too much power.

"without its staff there would be no company left to rescue"

penski · 4 Dec 2007 at 13:34

Don't believe the hype

*n

Werewolf · 4 Dec 2007 at 13:37

If the staff did their job, and did it well they probably deserve a bonus, especially given how they coped with the recent problems which were not their fault.

IIRC Northern Rock was more at risk of going under due to the media hype than anything else, the most likely thing to have happened is they stopped taking on new business - the loan from the BOE was to cover short term costs, allow them to take on new business and to help cover what might happen if everyone decided they wanted their cash at one (I believe many banks etc may not have the ready cash to cover everyone withdrawing their money at once - something to do with it being tied up in investments and loans).

platypus · 4 Dec 2007 at 13:39

jdickerson said:
"without its staff there would be no company left to rescue"

What has that got to do with anything? It's a clear example of a Union bullying a company into capitulating to ridiculous demands.

Whilst the staff may deserve some recognition of how they coped with the run on the bank, an above odds payrise and one off cash payment is way over the top for a company in such dire straits as NR.

meghatronic · 4 Dec 2007 at 13:42

platypus said:
What has that got to do with anything? It's a clear example of a Union bullying a company into capitulating to ridiculous demands.

Whilst the staff may deserve some recognition of how they coped with the run on the bank, an above odds payrise and one off cash payment is way over the top for a company in such dire straits as NR.

Whilst I agree with this, NR are in no position to oppose their staff/unions at the moment. Alas.

Slinwagh · 4 Dec 2007 at 13:51

Im not sure that I have a problem with the counter staff getting a bonus but I think the people at the top making the strategic descission in light of what has happened would be a touch out of order.

Helium_Junkie · 4 Dec 2007 at 14:37

NR employees shouldnt suffer for the general publics idiocy when the media decided to do their utmost to destroy NR.
The whole thing was a demonstration of how much power newspapers have over the mob, nothing more.

Truth: NR take a loan, banks do this all the time, no worries.
News: NR'S GOIN DOWN, BAIL OUT BAIL OUT!!!
People: NEWS SAYS NR'S GOIN DOWN, BAIL OUT BAIL OUT!!!

Still, gave me a jolly good giggle listening to the thickwits queueing outside the bank thinking they were about to lose all their money

Muffin` · 4 Dec 2007 at 14:39

Helium_Junkie said:
...

People are thick, its the media that informs the people, if they thought there was a higher risk of them losing their money, they will do everything to keep it. It's not unfathomable to anybody that a person wants to look after himself.

Haircut · 4 Dec 2007 at 14:43

Helium_Junkie said:
NR employees shouldnt suffer for the general publics idiocy when the media decided to do their utmost to destroy NR.
The whole thing was a demonstration of how much power newspapers have over the mob, nothing more.

Truth: NR take a loan, banks do this all the time, no worries.
News: NR'S GOIN DOWN, BAIL OUT BAIL OUT!!!
People: NEWS SAYS NR'S GOIN DOWN, BAIL OUT BAIL OUT!!!

Still, gave me a jolly good giggle listening to the thickwits queueing outside the bank thinking they were about to lose all their money

NR would still be in the same situation as they currently are, even without any media intervention.
This is the fault of the directors and the business model they used to run the company.

IMO employees' bonuses should be determined in a large part by company performance. As such, they should not be getting a 'hefty Christmas bonus.'

a1ex2001 · 4 Dec 2007 at 14:55

The whole Northern Rock thing makes me chuckle, if the bank of England had been allowed to loan them money without anouncing it to the press like they wanted to then there would be none of the scare mongering jiberish floating around.

kefkef · 4 Dec 2007 at 15:01

Wonder what they got last year, or the year before? It may be that they have had no pay rise for a number of years and they are getting this one to 'make up' for that. I have had it before that i got no pay rise or Bonus for nearly 3 years, then in the 4th year out of the blue i got 12% pay rise and 5% bonus!

With regards bonuses, why should employee bonuses be based on company performance, something that they more than likely will never be able to affect? Director and management level bonus should be set on company performance, staff bonus should be based on personal performance set against targets in their personal review/development.

Phoebs · 4 Dec 2007 at 15:04

oh my god! they can stop ringing my mum asking for more money if they can afford to pay their employees that! they havnt just been ringing, its now reached harrasment levels!

penski · 4 Dec 2007 at 15:17

Phoebs said:
oh my god! they can stop ringing my mum asking for more money if they can afford to pay their employees that! they havnt just been ringing, its now reached harrasment levels!

By any chance does your mother owe them money?

*n

PS: A fair few of my close friends work at The Rock...I'd certainly say that this is both hard-earned and much-deserved.

platypus · 4 Dec 2007 at 15:38

penski said:
PS: A fair few of my close friends work at The Rock...I'd certainly say that this is both hard-earned and much-deserved.

I don't think that that is in question.

Phoebs · 4 Dec 2007 at 15:41

penski said:
By any chance does your mother owe them money?

*n

PS: A fair few of my close friends work at The Rock...I'd certainly say that this is both hard-earned and much-deserved.

she does and she's been paying them every month without fail. all of a sudden they get into financial difficulty and they want double off my mum each month!

They have been told not to contact my mum and we have been told not to speak to them.

like i say its now being considered as harrassment.

Majago · 4 Dec 2007 at 15:49

kefkef said:
With regards bonuses, why should employee bonuses be based on company performance, something that they more than likely will never be able to affect? Director and management level bonus should be set on company performance, staff bonus should be based on personal performance set against targets in their personal review/development.

The employees will be able to affect the company performance though. The sales staff can sell more mortgages, the process technicians can get everything input efficiently and all staff can ensure that expenses etc. are kept to a minimum. All of this will contribute to the overall performance level / figures of the business. A fair medium would be to have a certain % of the bonus on individual targets and a certain % of their bonus based on the companies level of profit.

PaulyJay · 4 Dec 2007 at 15:51

a1ex2001 said:
The whole Northern Rock thing makes me chuckle, if the bank of England had been allowed to loan them money without anouncing it to the press like they wanted to then there would be none of the scare mongering jiberish floating around.

The reason the run started in the first place was due to the risky business model that NR was running.
The very fact they needed the loan proves that. It can't all be blamed on the press.