One of the unique things about investment banking and the City in general is the whole bonus thing. When bonuses are multiples of what are already, by any conventional standards, pretty lucrative salaries, it is easy to understand the fixation. The first time I received what to me felt like a real bonus was back in 1998. It was the first time that my bonus had exceeded my salary and it was the first time that there was any real uncertainty about how much I was going to receive. The period leading up to bonus day is vivid in my memory because it was the first time I witnessed how bankers approached it.
There are actually many variables that influence a bonus. Performance is the most important, but performance is a hierarchy - starting with the firm, the group, the division, the team and then the individual. It doesn't take a genius to figure out that this year the firm's performance is going to have major impact on how everyone is paid. In addition, your 'market value' as an individual is important, as there is a pretty liquid transfer market in the City where a director in rates sales, for example, has a reasonably well-defined compensation package. In hot markets, these 'market values' tend to be bid up by the various banks and this phenomenon is actually one of the leading drivers of game playing.
The secret offers game
Which leads nicely onto the first game - the "not-so-secret-offers game". This is when you make your boss think that you have offers far more remunerative than last year's bonus was. The thinking is: "If I can convince them that I am in demand then they will pay more to keep me".
The expectations game
The second game is making it clear that your expectations are for both a promotion and a large pay rise. The thinking is: "If they can't get me the promotion, they will have to make up for my obvious and very dramatised disappointment with a kicker in my bonus."
The disappointment game
The third game is the "disappointment game" - this is where you try to influence your next bonus by expressing extreme dissatisfaction with your current package and arguing how you deserve much more. The thinking is that management will be concerned that you will seek opportunities elsewhere if they don't pay up.
I have seen these three games played out year in, year out. My conclusion is that the evidence for their success is at best equivocal. I do know of one individual, a good friend of mine actually, who managed to get a 10k sterling top-up to his bonus during his bonus conversation, which I thought was very ballsy given how much he was given to begin with. However, this was back in the heyday of the internet boom and banks were awash with money, so I'd argue it was an exception.
Managers are pretty savvy as to what to pay their staff and actually tend to spot these kinds of games pretty easily. They can also easily backfire. I know of at least one person who was fired as a direct result of the not-so-secret offers game. When it came to making some forced cuts because of a downturn, his unsubtle posturing got its just deserts in the eyes of his manager.
My personal feeling has been if you can't trust your boss to treat you fairly, you probably should seek to work for someone else. This year, everyone is in for disappointment based on the industry's performance. I'd therefore caution against game playing, for fear you will only connive yourself out of a job.