Purpose:Previous studies on team-based learning (TBL) in medical education demonstrated improved learner engagement, learner satisfaction, and academic performance; however, a paucity of information exists on modifications of the incentive structure of “traditional” TBL practices. The current study investigates the impact of modification to conventional Group Application exercises by examining student preference and student perceptions of TBL outcomes when Group Application exercises are excluded from TBL grades.Methods:During the 2009–2010 and 2010–2011 academic years, 175 students (95.6% response rate) completed a 22-item multiple choice survey followed by 3 open response questions at the end of their second year of medical school. These students had participated in a TBL supplemented preclinical curriculum with graded Group Application exercises during year one and ungraded Group Application exercises during year two of medical school.Results:Chi-square analyses showed significant differences between grading categories for general assessment of TBL, participation and communication, intra-team discussion, inter-team discussion, student perceptions of their own effort and development of teamwork skills. Furthermore, 83.8% of students polled prefer ungraded Group Application exercises with only 7.2% preferring graded and 9.0% indicating no preference.Conclusion:The use of ungraded Group Application exercises appears to be a successful modification of TBL, making it more “student-friendly” while maintaining the goals of active learning and development of teamwork skills.