London: British bankers covet multi-million pound bonuses just as much for the status they convey as for their monetary worth, fuelling a culture of one-upmanship among financiers, academic researchers said.
The financial industry has come under fierce political and media scrutiny over pay structures since the economic fallout unleashed by the collapse of investment banks, such as Wall Street giant Lehman Brothers Holdings Inc., cast the spotlight on the link between excessive risk-taking and huge bonuses.
“It’s not about getting a Maserati instead of a Porsche, it’s about the organization saying that they value you, and about a comparison with your colleagues...telling them ‘I’m better than you are’,” said organizational psychology professor Cary Cooper of Lancaster University Management School.
Although bonuses are not usually disclosed by employers, the topic is commonly discussed between peers and comparisons are made based largely on monetary terms. At its crux is the belief that cash equals value.
“Traders wouldn’t have as much respect for even those on the board of directors as they would for that person in another bank who had made £40 million (Rs317.6 crore) that year,” said Ismael Al-Amoudi, an expert in organization theory at Reading University.
Other ways of addressing the competition for status have been mooted by academics in the field. These range from the development of clearer career structures, where job titles send signals about rank, to more radical attempts to address attitudes in the business schools that typically feed recruits into the industry.
Experts agree that any effort to legislate limits on bonuses would also need to address the cultural issue posed by the widespread craving for status.