Social reform, not disapproval will reform bonus culture

Social reform, not disapproval will reform bonus cultureAmsterdam  - The global financial crisis cast the spotlight on the big corporate bonuses and incentives and sparked ongoing debate on a practice that US President Barack Obama has called "outrageous" and "shameful".

Dutch social psychologist Roos Vonk of Radboud University in Nijmegen in the Netherlands, in an interview with the German Press Agency dpa, suggests that trying to eliminate society's bonus culture

will take more than widespread disapproval or periods of economic hardship.

"Only if we acknowledge the fact that today's bonus culture is part of the way we have organized our society, can we make concrete and fundamental changes," says Vonk.

She argues that monetary reward is key in post-modern society to giving and receiving approval.

"One of the basic needs of all human beings is the need to know they are valued. People want to know they matter. Money is a gauge to indicate whether people are valued by others."

"In the past, people lived in social groups of around 50 people. Everyone would know everyone well and continuously provide each other with social feedback, such as criticism, recognition and compliments."

Today, however, such small-scale social contexts have largely disappeared. Society has become individualized; people work in impersonal multinational corporations. Social networks have become larger, but much looser.

"Our immediate social circle no longer provides us with personal recognition," she says. "Also, the consequences of our behaviours are less visible and immediate, so the effects of our actions are more obscure."

In American psychology, Vonk explains, there is a self- determination theory that people have only a few fundamental needs, such as being valued and connected to other people, in order to become self-confident.

"If for some reason those basic human needs are not met, people will search for alternative ways to achieve self-esteem. They could seek refuge in basically anything: plastic surgery, conquering women, acquiring status - or making money."

This is where the bonus culture comes from, says Vonk.

"Money has become our way to provide social recognition to each other. Your salary determines your social status. And if someone gets a higher bonus than you, your ego is hurt."

A total of 24 employees of France Telecom have committed suicide over the past 18 months. These incidents, according to Vonk, are an "excellent example" of this determination theory.

"These employees felt as if they were not given the opportunity to connect with others. They were deprived of a social context in which they could provide and receive social approval."

Therefore, says Vonk, rather than focus exclusively on regulating banker's bonuses, it may be necessary to rethink the way we have organized society.

"Corporate psychologists might argue it is necessary to reorganize multinational corporations so that people work in much smaller teams that mirror our historic small social contexts," says Vonk.

The psychology professor however doubts politicians or business people would take such recommendations to heart.

"Our entire economy and financial system is based on economic growth. Reorganizing society according to my ideas would not generate much economically.

Shareholders definitely think the economy should grow. Even today, in the midst of a global economic crisis, almost everyone agrees the economy should by definition grow.

"It is already apparent that many people are getting back to business as usual as soon as they are back on their feet. Only a new crisis, that would be much more severe, might force people to rethink society on a more fundamental level," Vonk says.

In the meantime, the prevailing bonus culture is likely to continue, with money as its main currency, she says. (dpa)




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