Mutual Monitoring and Team Member Communication in Teams

Abstract

Prior research suggests that team member communication based on mutual monitoring can improve team performance by enabling the manager to more closely relate individual team members’ contributions to their rewards. Given that diverse work settings affect the ability of team members to observe each other, this study investigates whether the benefit firms can extract from such communication is affected by differences in the type of information available to team members. Specifically, we investigate whether team members’ observations of each other’s effort, output, or both effort and output levels affect the usefulness of team member communication and, thus, team performance. Consistent with our predictions, our experimental study finds that team performance is higher when team members can observe only each other’s effort level than when they can observe both each other’s effort and output levels; however, team performance is lower when team members can observe only each other’s output levels than when they can observe both each other’s effort and output levels. The intuition behind these results is that the type of observable information creates different degrees of ambiguity regarding fair rewards for team members’ contributions, and thus, the usefulness of the communication to the manager in relating individual team member contributions to their rewards. Results of our study contribute to both theory and practice by enhancing our understanding of the role of team member communication based on mutual monitoring in motivating effort in teams, and particularly, how its efficacy is affected by the type of information available to team members prior to communication.