'The biggest problem in banking is measuring performance'

Today's interviewee shatters the illusion held by many bankers that they operate in a meritocracy. Often, it's a question of 'fit'

"People ask, when will bankers have enough? But it's not about the money. It's a highly addictive status game. Pay marks your status in the organisation. This is why there is no saturation point."

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This is from today's interviewee Kilian Wawoe, who worked in human resources at ABN Amro bank for 12 years.

For the past year I have been trying to get banking staff working in human resources to talk to me. The inspiration was this revealing interview about what it's like to fire people. It proved very, very hard to find other people in human resources to speak to this blog, perhaps because it falls to them to fire bankers for secretly speaking to journalists? Anyway, at last the banking blog can present its second human resources officer.

His full interview is here and Kilian is coming into the comment thread to discuss his points further with you. He has left banking for good and is now a university lecturer and consultant, hence there is no need for anonymity.

Kilian raises a number of really interesting points. His main argument is here:

"The biggest problem in banking is measuring performance. Professional tennis players operate on a level playing field with their opponents, using the same surface and balls, the same wind speed. Their performance can be measured. But now you are the CEO at a major British bank. Tomorrow the pound crashes and your bank has the worst year in history. That is far beyond your control. I am not saying CEOs or bankers are clueless gamblers in a casino. On the contrary, you need skills to be a good banker, absolutely. What I'm saying is that finance is simply too complex, with too many unknown unknowns and too many crucial factors beyond an individual banker's control, to adequately measure their yearly performance."

Virtually every banker I have spoken to believes he or she operates in a meritocracy. Is this a self-serving illusion?

Wawoe goes further:

"Many in investment banking will tell you they work in a meritocratic environment. And yes, you can often attach a number to their activities. But that's not the same."

Wawoe then extends his argument to the glass ceiling:

"Why will no banker ever be able to admit that performance cannot be measured adequately? Because those performance numbers inform the system of 'variable compensation' or bonuses and that's how they keep score!
"Incidentally, this is how I have come to define the glass ceiling. It's the point in the hierarchy of an organisation where performance becomes essentially impossible to measure and other factors become decisive. Whether you're a 'fit', if you know the etiquette at a networking event, play golf, know how to talk about the news in the right way … Many women don't get that, and try to work twice as hard. This means they miss out on the very social events that determine their career prospects."

Do have a look at the full interview here. There are great and very honest insights into the culture of banking. Take this one:

"I have flown business class and it does something to you. Over there is a long line of sweaty people and you are walking past all that, with your platinum card. Have you noticed that people in business class are far more likely to look at passengers making their way to economy class? They want to be seen sitting in business class. I never catch people in the first rows of economy class doing that."

Read on …

This banking blog features interviews with more than 90 other insiders across the world of finance. Here is a guide on how to use this banking blog. For insiders there is this index of interviewees ranked by activity.

In this interview a senior banker discusses whether he believes he deserves his $1m bonus. He also stresses: "It's crucial not to use your bonus to upgrade your lifestyle."

And here another senior banker talks about the bonus ritual and what it's like to assign bonuses to junior bankers: "Basically, it's a bunch of guys in a room going over a list of names and accounts and saying 'OK, so how much do we give this guy?'."