GUEST COMMENT: How to maximise your bonus as a first year analyst
So, you've worked your little behind off for one full year and you've survived. Bonus season is coming, but how are they calculated? How - as a mere first year analyst - do you get into the tier 1 group and achieve one of the highest bonuses for your year?
Well...
A few months before bonuses are paid you'll be asked to submit a list of the people you want to review you. This should be a mix: people from your team, from across the business, from other offices and from all seniority levels. Your manager will have the ability to add and subtract people from this list.
Once reviews are submitted, MDs from across the firm usually meet to read through them and to 'fight out' what their team's portion of the overall bonus pool will be. MDs will discuss among themselves how well their analysts have performed and will sometimes involve VPs and anyone else who's worked closely with you. At the end of the process, each analyst will be given a score and placed into a tier. Each tier is allocated a bonus number and that bonus number is what you'll be paid. There can be considerable discrepancies between tiers - this year 8-12k was common.
Your MD therefore has a significant influence on how much you get paid: every MD wants his or her own analysts to rank highly across the banks' analysts as a whole and they will need to justify why they think members of their team merit that position.
In theory, analysts are ranked and placed into tiers based on their performance, ie. how well they did their work, how efficient they are and how much value they added to the team.
However, the system isn't perfect. You won't gain much from being a total rock star (the max you get paid is whatever tier 1 have been allocated), but you can get totally penalized if you haven't performed or you've slipped up near bonus evaluations. There is a very strong prejudice against mistakes.
Because of this, I suggest you follow this advice:
TIP 1: The first and last month of the evaluation period are normally the most important. You are always going to have errors when you are new but it is important that at this crucial stage you show yourself to recover quickly, learn from your mistakes and never make them again! Errors in the last month before bonus season will not be overlooked.
TIP 2: Whatever you do, do not miss morning meetings or other things because you overslept. It is the easiest way for you to be penalized and dropped down a tier.
TIP 3: You need to get to know people across the lots of different people as an insurance policy - just in case your staunchest backer leaves or gets laid off midway through the year.
TIP 4: Get and take note of feedback from your boss and seniors throughout the year. Show yourself to be open to criticism and keen to improve. You don't want any surprises in your review.
TIP 5: Don't become obsessed by the number. You should be more concerned with the quality of your reviews and what people are saying about you at this early stage. The difference in bonus payouts between the tiers early in your career is significant, but not massive. You need to set yourself up for your promotions and far bigger bonuses in future.
