Some new research by David De Cremer, a professor at Rotterdam School of Management, Erasmus University and visiting professor to the London School of Economics, raises a few interesting questions about bonuses, the main one being – should anyone trust bonus-driven bankers?
In his research involving 15 top Dutch banking executives, De Cremer, also of first concentrated on the importance of bonuses for the interviewees themselves. The focus then shifted to how important these bonuses, in their view, were to others in the financial sector. The findings clearly reveal a psychological preconception: all top executives believed that bonuses were more important to others than to themselves.
According to the research executives also believe it is only their colleagues who are spurred into better performance by bonuses, and not themselves. De Cremer said: “The findings of my research demonstrate that the need for giving bonuses within the banking world is a self-created myth.”
The final series of questions put to these executives inquired about the type of bank they preferred to consult for their private investments. They were given a choice of two types of bankers: Banker A was presented as someone driven by self-interest and financial gain, while Banker B was painted as an individual who put the interest of the customer above anything else and was keen to provide good service. Without exception, all the executives taking part in the study opted for Banker B, while having earlier made clear that they would appoint Banker A within their own banks.
In summary then, no-one in the study was motivated by bonuses and no-one trusted bankers that were.
Doesn’t that suggest that bankers are either untrustworthy (and motivated) or unmotivated (and trustworthy)..?
Filed under: Technology