Team Incentives, Social Cohesion, and Performance: A Natural Field Experiment

Abstract

We conduct a …eld experiment in a Dutch retail chain with 122 stores to study the interaction between team incentives, team social cohesion, and team performance.Theory predicts that the e¤ect of team incentives on team performance depends on a team's social cohesion. In particular, free-riding should be weaker when co-workers care more about each other. Conversely, team incentives may lead to more co-worker support or to higher peer pressure and thereby can a¤ect the team's social cohesion.We introduce short-term team incentives in a randomly selected subset of stores and measure for all stores, both before and after the intervention, the team's sales performance, the team's social cohesion as well as co-worker support and peer pressure. The average treatment e¤ect of the team incentive on sales is 1.5 percentage points, which does not di¤er signi…cantly from zero. In line with theory, the estimated treatment e¤ect strongly increases in social cohesion as measured before the intervention. We …nd that social cohesion itself is not a¤ected by the team incentives. Our study illustrates the potential of complementing a …eld experiment with ex ante and ex post questionnaire data collection for the study of management practices, workplace behavior, and performance.

Two Field Experiments on Self-Selection, Collaboration Intensity, and Team Performance

“…Recognizing the importance of cooperation in teams, economists and management scholars are extensively studying the influence of various forms of team incentives (e.g., team bonuses or tournaments) on team performance. While team bonuses and team piece rates tend to have a positive influence on productivity (e.g., Englmaier et al, 2018;Friebel et al, 2017;Hamilton et al, 2003;Erev et al, 1993), the evidence on the influence of team tournament incentives on performance is ambiguous (e.g., Delfgaauw et al, 2019Delfgaauw et al, , 2018Bandiera et al, 2013). Thus the precise channel through which team incentives lead to differences in team performance remains an open question.…”