It’s official and no I’m not referring to start of the Olympic Games but the credit crunch which is now a year old if the European Central Bank’s decision to inject €95bn funds last August is anything to go by. While the unfolding of the subprime mortgage crisis that followed has caused a lot of pain beyond the banks and into people’s pockets - The Financial Times has done a great feature on the Big Freeze which is worth a look.

So what has all this got to do with reward? Well, it was interesting to see that The Governor of the Bank of England decided to reject his near 40% pay rise last month. It is understood that Mervyn King thought it would be ‘inappropriate’ given the current economic climate. Though with a pension pot of over £4m the pain may not be too great! But on a serious point, such a decision is still uncommon as Directors in charge at Northern Rock and the Financial Services Authority have not been penalised in the same way as Northern Rock shareholders.

On a matter closer to home, my boys who have just turned 7 and 9 have been talking about pocket money or allowances and how they were old enough to get it by now. Realising the importance of being prepared, I decided to check out the situation. For a start, do children just receive it or does it actually need to be earned? Or is it given but can be lost for bad behaviour? Deciding that the boys’ would need to earn it was the first decision. Then there was the question of the going rate. While my boys’ feedback on what their friends’ pocket money was unsurprisingly inflated over that of their parents’. This was however the most useful information. After all, they would probably talk about it in the playground and no, friends’ parents did not know of any 9-year old receiving £10 a week!

By comparison, the Google searches were a minefield that was best left alone. Fast forward a week; some detail in between and the new system is now in place. Does it work? Week one has been good as they have worked hard to stay ahead of the important points which convert to their allowance. And yes, there has been help in preparing meals; keeping their rooms tidy and less persuading them to read their books during the holiday. But it is early days and the thrill of the daily points chart may wear off….

The BBC was itself in the news again last week as the Corporation’s 2007-8 annual report was published.  Of course what attracted most media attention was the executive pay awards in a year when the BBC announced 1,800 job cuts over a 5-year period to plug the funding gap. Director-General Mark Thompson chose not to take his bonus award while other executive directors, including the Director of BBC people, claimed their bonus awards.

The broadcasting Trades Union Bectu heavily criticised the decision at a time when jobs are being lost. The BBC remuneration report certainly makes interesting reading if you compare the double digit increases in total remuneration for some executives compared to last year. However, the report makes it clear that the Corporation should not lead the market on pay and, in it’s own words, should be ‘positioned around the median of the market’ for base pay. While the outcome may not be excessive relative to some private sector executive awards, it raises the question of how a publicly accountable body should reward it’s top team.

What about the pay increases? And should the BBC be awarding bonuses at such a time? Or are these changes just part and parcel of the change process? What do you think?

Have a look at the Just Rewards newsletter on executive reward.