Getting a Bonus: Social Networks, Performance, and Reward Among Commercial Bankers

Abstract

Research on the effects of social networks on individual status attainment has exploded in recent years, but the results remain equivocal, varying across network structures, types of ties, and outcome variables. The focus in this literature has been on two primary outcomes: performance benefits and rewards (including promotion and compensation). These two types of outcomes have often been conflated, however, despite the fact that high levels of one do not guarantee high levels of the other. We examined the effects of job performance, network tie strength, and network structures on the size of the year-end bonuses received by 71 relationship officers in a major, multinational commercial bank. We found that in networks based on information acquisition, both strong ties and sparse networks are positively associated with high bonuses, as is the combination of the two. In networks based on approval and support for one's deals, neither tie strength nor density predicts bonus size, but the benefits of strong ties increase as network density increases. Our results demonstrate the importance of distinguishing networks based on collegial relations from those based on authority, as well as the importance of distinguishing the network factors that improve performance from those that generate favorable evaluations independent of performance.