* Bonus levels key status measure among bankers
* Performance driven by desire to appear successful
By William James
LONDON, Aug 27 (Reuters) - 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, 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 organisation saying that they value you, and about a comparison with your colleagues ... telling them 'I'm better than you are'," said organisational psychology professor Cary Cooper of Lancaster University Management School.
The pressure to appear successful can lead to the spiralling effect that saw bonus payments rocket ahead of the financial crisis.
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 pounds that year," said Dr Ismael Al-Amoudi, an expert in organisation theory at Reading University.
Al-Amoudi asked staff at a number of multinational banks: 'Would you rather receive half your bonus and have your colleagues believe you had received double, or receive double your bonus and have your colleagues think you had received half?'
BONUS ALTERNATIVES
As an international debate on setting legislative limits on bonuses heats up ahead of next week's meeting of G20 finance ministers, the search for alternative ways to satisfy the need for a pecking order continues elsewhere.
While the premium placed on status motivates performance, it can also motivate a degree of internal politicking and intensify the search for ways to game opaque bonus distribution systems.
But increasingly organisations are seeking to eliminate this prospect through greater transparency and a focus on team, rather than individual, bonuses said Andrew Page, director at remuneration consultants Kepler Associates.
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.
Al-Amoudi said he could not recall a single trader who, when answering the question, had chosen greater reward over greater status among his peers.
(Editing by John Stonestreet)