Which Reward Structure Works Best? A New Perspective on Cooperation and Competition in Teams

Abstract

A contingency model of reward structures is developed, stating that the relationship between reward structure and team performance is contingent upon the performance dimension specified (speed vs. accuracy), team composition (team members' interpersonal orientation in terms of extroversion and agreeableness), and the relative performance level of individual team members. In a laboratory experiment, 75 four-person teams engaged in an interactive command and control task, in which reward structure (cooperative vs. competitive) was manipulated. Results showed that a competitive structure enhanced speed, whereas a cooperative structure enhanced accuracy. Moreover, teams high on extroversion and agreeableness performed better under a cooperative structure, whereas teams low on these orientations performed better under a competitive structure. Finally, reward structure had a stronger impact on poorer than on stronger performing team members.