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

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  • Mark S. Mizruchi

    (Department of Sociology, University of Michigan, Ann Arbor, Michigan 48109)

  • Linda Brewster Stearns

    (Department of Sociology, Southern Methodist University, Dallas, Texas 75275)

  • Anne Fleischer

    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

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.

Suggested Citation

  • Mark S. Mizruchi & Linda Brewster Stearns & Anne Fleischer, 2011. "Getting a Bonus: Social Networks, Performance, and Reward Among Commercial Bankers," Organization Science, INFORMS, vol. 22(1), pages 42-59, February.
    • Handle: RePEc:inm:ororsc:v:22:y:2011:i:1:p:42-59
    DOI: 10.1287/orsc.1090.0516
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    References listed on IDEAS

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    1. Bilian Ni Sullivan & Pamela Haunschild & Karen Page, 2007. "Organizations Non Gratae? The Impact of Unethical Corporate Acts on Interorganizational Networks," Organization Science, INFORMS, vol. 18(1), pages 55-70, February.
    2. Manju K. Ahuja & Dennis F. Galletta & Kathleen M. Carley, 2003. "Individual Centrality and Performance in Virtual R& D Groups: An Empirical Study," Management Science, INFORMS, vol. 49(1), pages 21-38, January.
    3. Simon Rodan & Charles Galunic, 2004. "More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness," Strategic Management Journal, Wiley Blackwell, vol. 25(6), pages 541-562, June.
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    Cited by:

    1. Adam M. Kleinbaum, 2018. "Reorganization and Tie Decay Choices," Management Science, INFORMS, vol. 64(5), pages 2219-2237, May.
    2. Zou, Xi & Ingram, Paul, 2013. "Bonds and boundaries: Network structure, organizational boundaries, and job performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 98-109.
    3. Andersen, Kristina Vaarst, 2013. "The problem of embeddedness revisited: Collaboration and market types," Research Policy, Elsevier, vol. 42(1), pages 139-148.

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