Why take a job at Goldman Sachs? To become the next John Corzine or Hank Paulson? Nope. To get lots and lots of money? Not necessarily.
Many people are after something else: prestige.
“The status of a firm is quite possibly the leading driver in attracting the best of the best, at least in investment banking,” explains Gretchen Gavett at the HBR Blog. Gavett links to a study led by Matthew Bidwell, a professor at the University of Pennsylvania’s Wharton School, which finds that intangibles often matter much more than material rewards. People early in their careers are especially eager to notch a nice entry on their résumé, even if the money isn’t as much as they might like.
“You get the best people, and you don’t have to pay as much as you should early on because they want the stamp of ‘Goldman Sachs,’” Bidwell tells Gavett. “You bring in people young, you don’t pay them much, and you get a lot of value out of them. At the same time, you don’t want everyone to be managing director.” It’s win-win, sort of.
This isn’t entirely surprising. Most of us care about prestige. The Nobel Prize comes with money, but it’s not generally the money that makes Nobel winners happy. “Every study of workers shows that they consider the social function of the enterprise the most important one,” Peter Drucker observed in The New Society. “They place the fulfillment of their demands for social status and function before and above even the fulfillment of their economic demands.”
Successful businesses and, for that matter, even successful regimes tend to have in common an awareness that morale and performance hinge only partly on economic rewards. Moreover, overpaying people to stay at a job can actually damage morale. This was an idea to which Drucker returned often.
“In survey after survey the major demands of industrial workers appear as demands for good and close group relationships with their fellow workers, for good relations with their supervisors, for advancement and, above all, for recognition as human beings, for social and prestige satisfactions, for status and function,” Drucker wrote. “Wages, while undoubtedly important, rank well down the list.”
What role have considerations of prestige played in your career choices?