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SummaryWe examine the joint eects of task interdependence and reward interdependence on group behavior and performance. We develop a model that predicts that task and reward interdependence will interact to increase performance, and present results of a laboratory experiment that con®rms our prediction. We explore the ecacy of group reward systems for dierent task designs, and the relationship between cooperation and performance. We con®rm earlier results on the weakness of the free-rider eect in small face-to-face groups. We also ®nd, surprisingly, that while reward interdependence is important to performance, task interdependence, but not reward interdependence, drives observed cooperative behavior. This last result suggests caution in interpreting the ecacy of changes in the design of work. Such changes, if unaccompanied by changes in the design of the reward system, are likely to appear successful in terms of observed cooperation, but may not enhance performance.