A Wall Street exec has a brutal anecdote about deciding bonuses, and it changed his worldview

Jimmy Dunne III thinks it’s important to be brutally honest.

He is a senior management principal at investment banking firm Sandler O’Neill & Partners, which he co-founded with Bear Stearns’ financial services group’s senior management team.

There was a key moment at Bear Stearns that completely changed his worldview, according to Adam Bryant’s Corner Office in the New York Times.

Here is the transcript:

Bryant: What were some early management lessons for you?

Dunne: There was a small group of us divvying up the bonuses, and somebody wanted to give one guy an additional $5,000 on top of the $20,000 he was getting. Then someone said, no, he didn’t earn it, we’re not doing it, and we should give it to the guy who made a $3 million bonus, because he earned it. And either the first guy has got to do a lot better, or he has to quit, or we have to fire him.

That was not my view, but he was right, and it changed my mind. It’s about meritocracy. You’ve got to be brutally honest with people about where they stand. And you do them a disservice by sugarcoating it or by not giving them the absolute facts. That evolved into what I call my infinite-finite strategy.

In this case, whether that person gets the $5,000 is a finite issue. Infinite discussions get into personal attributes that can go on and on, which he thinks are important but not critical. He also wants people to separate nonpersonal remarks from the personal. And even if they can’t deal with the truth, they are entitled to know it.

You can read the full interview over at the New York Times

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