Incentive Structure and Group Performance Expectations in a Budgeting Setting: A Descriptive Study

Abstract

Examines, in a laboratory experiment, the effect of reward interdependence and budget difficulty, as components of incentive structure, on characteristics of group performance expectations. Demonstrates that differential reward interdependence allows groups potentially to apply differential normative power in order to regulate their members′ performance behaviour. Also, shows that the shape of the group approval function is altered by differential reward inter‐dependence and that the degree of group supportiveness is a function of budget difficulty. The results suggest that to understand the role of budget standards and incentive schemes in group settings may ultimately require the incorporation of their intermediate effect on group performance expectations.