In 10,000 words:
A bank that really takes pleasure in proudly advertising any award it gets, howsoever ludicrous the honour, is HSBC. One honour it’d loath to advertise, but unarguably deserves the most is the bank that most royally screws its employees. It is no secret that HSBC’s senior management gets paid ridiculous amount of compensation. What however is not well known is how shoddily the junior and middle level staff is paid. One rather remarkable fact is that on parameters like average employee salary and percentage of profits paid as staff compensation, HSBC is in line with the best paying investment banks. However, the salaries of its junior-middle level staff are right there at the bottom of the industry. Their loss is “senior management’s” gain, the bureaucrats who spend most of their time strategising and talking vision.
As most banks are increasing the base salaries of their employees, HSBC came up with a new way to screw its employees. It announced a new internal title structure, ostensibly to make it more consistent with the external market, but really to deny the junior employees their due promotions and the rise in base salary that comes with it. Here is a recent email from Global Markets Head, EMEA:
“As part of our on-going programme to introduce transparency around promotions and titles, one of the first actions of the recently established Global Markets People Committee was to review our title structure in order to make it more consistent globally and align it with our GCBs [Global Career Bands], as well as with the external market.
The Global Markets ManCom have now approved the recommendations of the People Committee and a new internal title structure will be introduced in Global Markets in a phased approach during 2010.
The first phase will take effect from 1 August 2010 and apply to all new promotions and hires in the UK, France and the Middle East. There will be no changes to existing employees’ grades or titles or to the use of approved external marketing titles.
Head of Global Markets, EMEA”
The emphasis in bold is an attempt to bring lucidity to the change that, although self-congratulatory as an exercise to introduce transparency, is really an exercise in obfuscation (as an aside, the use of phrase “introduce transparency” was funny enough. An admission, of no transparency in the existing process, made by mistake.)
This was the structure so far. Analyst-Associate-Manager-Associate Director (AD)- Director (D)- MD. Now they have removed the title of Manager from the chain. However, as the line in bold says, those who are Managers right now would continue to remain as Managers. They can’t become Associate Director, as they are already in GCB 4 (As per the new structure AD is the title for GCB 4.) The poor guys were told that since GCB matters, a Manager is really same as AD/VP. Apart from the fact that Manager gets paid lesser than AD/VP. And that even though you are being told that you are like an AD/VP as you share the GCB level, you can’t use it as your title internally or externally. (A classical exercise in Orwellian Doublethink- act of simultaneously accepting as correct two mutually contradictory beliefs.) The obvious corollary is that Manager who was expecting to be promoted to AD soon (and get a salary hike) can’t really have that expectation now. As the manager has a much steeper curve to climb to become a Director. Ditto for poor Associates. They now have to climb to Associate Director Level. Plus, they have an additional hurdle. Most desks would have someone at Manager level. Now if an Associate is made Associate Director, he’d be senior to (and get paid more) than the Manager. So he has to remain stuck at Associate for longer than earlier and not get the increase he’d have got on being promoted to Manager.
If the idea was “employee benefit”, as it was made out to be, then why not do one-off promotions of all Managers to AD as the former level was removed. Alternatively, if the idea was parity with other banks, then the most logical way of implementing the change was to do away with the Manager level gradually by allowing current Managers to become ADs within next 2-3 years. It would have allowed for easier promotion of Associates as well. However the route chosen, not only defies common sense, but is also the one with worst consequences for junior employees. There is one benefit though that no one is talking about. In a tough year where profits are hard to come by, this is how senior management earns their high bonuses- by pinching it from the junior staff.
To be sure, you can still do well despite not being in the senior management. High performers at all levels are rewarded well. In fact, they are identified and groomed for senior management roles. A small caveat is that the performance is not measured in terms of how you do your job, but in terms of how well you can suck up to those who matter. There is an entire sucking up chain. If you are in it, then sky is the limit.