The perils of managing millionaire bankers

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Far from creating more satisfied employees, escalating remuneration levels can have the reverse effect.

Suzy Wetlaufer, senior executive editor of the Harvard Business Review, concluded in a recent article that millionaire employees were more demanding, fickle and uncommitted than their less wealthy counterparts. Motivation and retention become problematic. In Wetlaufer's words, millionaires are liable to 'check out'.

Stories are legion in the industry of highly paid employees who have stuck two fingers up to their employers because there was something about the job they did not like. The huge increase in pay levels over the last few years means that more people have the financial security which gives them the freedom to behave that way.

According to Wetlaufer, millionaires are more liable to shift to hot new jobs, to retire, or to set up their own business.

Besides the impact of rising pay levels, many argue that loyalty to the firm has declined because of a string of mergers and takeovers.

Gary Goldstein, chairman of Whitney Group, the leading headhunter, says: 'Consolidation means that people are already less loyal than they were in the past. The sense of propriety that bankers once had is going.'

For the investment banks, an employee population of ultra-wealthy free agents is a manager's nightmare.

'We are constantly looking for new ways to motivate people,' admits one human resources director at a London-based firm.

Philip Augar, author of the book The Death of Gentlemanly Capitalism and former head of Schroder Securities, left the industry to pursue a writing career. However, Augar disputes that individuals' rising wealth has undermined motivation.

'In practice I cannot think of many cases where people have signed up for big guarantees and then just gone through the motions. Professional pride tends to prevent that these days,' he says.

However, there is widespread agreement that the new breed of well-remunerated professionals require a new kind of treatment. Culture increasingly plays an important role.

Michael D'Ambrose, head of human resources at Citigroup, says: 'What you find today is that what millionaires want is to be treated like individuals.'

This is echoed by an HR director in London. 'Senior people today are less concerned about the money. They want the right environment to work in.

'People want to spend their lives somewhere where they like the people and they can influence things. They don't want to slot into the machine and flog themselves to death by working 20 hours a day.'

Andrew Lowenthal at Egon Zehnder argues that one of the keys is to make people feel they have responsibility and control. He says: 'When people become very wealthy the management tools that are used have to change. You have to treat people differently. It's a question of empowering them and giving them support systems to make them feel comfortable in their environment.'

Some of Wetlaufer's proposed solutions to the millionaire employee crisis are easily found in investment banking. The varied work and 'ever more challenging ever more difficult challenges' that she recommends are not unusual in the industry, and they are effective in retaining staff.

One banker says: 'I don't believe that anyone works 70 plus hours a week just for the money. The job itself is compelling because every day is different.'

It is away from the excitement of the front line that motivation presents the biggest problem. According to one insider, it is those in senior managerial positions who are most likely to walk. 'How to keep highly paid managers motivated when they don't have the excitement of working directly on the next big deal is a problem. Purely being a fire-fighter or a nursemaid to big egos is unlikely to appeal in the long term.'

For banks this means paying attention to the remorselessness of life at the top. Damien Carnell, a consultant at Towers Perrin, says: 'You need to be a lot more sensitive to the personal agenda. For example, requests for greater quality of life should be treated sensitively and if possible accommodated. It is a matter of listening and being a lot more sensitive to personal ambition. Try and make things possible. Being more flexible about what is needed might differentiate the winners from the losers in the long run.'

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