Team Incentives Research Articles

Discretionary Bonus Pools and Employeess Influence Activities: An Experimental Investigation

This study experimentally investigates how the extent of superior discretion over the allocation of a bonus pool affects the output of a team when employees can engage in unproductive influence activities. Granting superiors high discretion allows them to use non-verifiable information and observations in order to mitigate free-rider incentives in teams. Prior research, however, also suggests that discretion may give rise to unproductive influence activities of employees. The question, therefore, is whether organizations should reduce superiors’ discretion extent in order to mitigate influence activities in teams. Conventional economic theory assumes that superiors optimally account for influence activities in bonus decisions if they have incentives to do so. Reducing the discretion extent therefore harms superiors’ flexibility and may impair the efficiency of discretionary bonus pools. Relying on behavioral theory, however, I argue that superiors likely overweight their personal information in bonus decisions. This increases incentives for employees to engage in influence activities under high discretion and detracts them from contributing to team output. I thus predict that reducing superiors’ discretion extent actually increases team output. Furthermore, I predict and show that the degree of mutual monitoring between peers amplifies the positive effect of reducing superiors’ discretion extent. The reason is that influence activities of peers are more salient under a high degree of monitoring and thereby affect behavior and fairness perceptions of employees more strongly. Reducing the discretion extent therefore becomes particularly important with higher degrees of mutual monitoring. This study contributes to the literature on discretionary bonus pools by providing evidence on the failure of superiors to sufficiently account for influence activities in bonus decisions and, thus, on the benefits of limiting superiors’ discretion extent.

Team Incentives and Performance: Evidence from a Retail Chain

In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2 percent while inequality rises only moderately. The analysis suggests effort complementarities to be important, and the effectiveness of peer pressure in overcoming free-riding to be limited. After rolling out the bonus scheme, the performance of the treatment and control shops converges, suggesting long-term stability of the treatment effect. (JEL D22, J31, J33, L25, L81, M53, M54)

Get thee to the gym! A field experiment on improving exercise habits

We explore the efficacy of a combination of interventions to encourage exercise in a field experiment hosted at a large public university. The experimental groups include individuals and teams and those with and without information about peers. We find that team incentives are associated with greater behavior modification (e.g. more gym visits) than individual incentives. Information on peers’ gym attendance (either in a team or individual setting) also promotes more frequent gym use relative to a simple individual incentive. In addition, being in a team and receiving information on peers are effective in changing a non-user of the gym to a user. We also observe that periodic information feedback has a longer-lasting impact on gym attendance than other interventions. Our findings provide insight for any organization seeking to incentivize behavior change in the most efficient, and cost effective, manner.

The Impact of Psychological Traits on Performance in Sequential Tournaments: A Field Experiment

In order to analyze if heterogeneity in psychological traits affects individual performance in sequential tournaments, we conducted a tennis field experiment. In the experiment, we also varied the payment schemes (individual, team, competition) to control for moderating effects of different incentives. Team incentives, risk taking, and self-esteem reduced performance whereas a preference towards competition enhanced it. On average, we observe a second mover advantage. However, individuals’ psychological traits, such as self-esteem or self-efficacy, can turn a second mover into a first mover advantage. Our results shed new light on the discussion of first vs. second mover advantages and performance under pressure. Study findings have implications for psychological requirements of competitive and team tasks in business settings.

Team incentives and leadership

We study, experimentally, how two alternative incentive mechanisms affect team performance and how a team chooses between alternative mechanisms. We study a group incentive mechanism (team output is shared equally among team members) and a hierarchical mechanism (team output is allocated by a team leader). We find that output is higher when a leader has the power to allocate output, but this mechanism also generates large differences between earnings of leaders and other team members. When team members can choose how much of team output is to be shared equally and how much is to be allocated by a leader they tend to restrict the leader’s power to distributing less than half of the pie.

English

This study on prospects for sustainability and viability of Nigerian manufacturing organizations through team work approach has the overall objective of ascertaining the extent to which teamwork approach to change management holds good prospects for sustenance and viability in Nigerian manufacturing organizations. The study adopted the survey research design, in which ten manufacturing companies in the South-Eastern Nigeria were studied. The population of the study was thirteen thousand, six hundred and twenty three (13,623), and the sample size was calculated to be six hundred and nineteen using the Taro Yamane’s formula. The sampling selection was the stratified sampling method. A self-developed structured questionnaire and oral interview guide were the research instruments used for the study. Data collected were presented descriptively using charts, simple frequency and percentage distribution, mean and standard deviation. The hypotheses were tested using the Z-test statistic. The major finding of the study were that teamwork approach to change management in Nigeria manufacturing organizations to a large extent holds good prospects for sustenance and viability (Zcal = 5.76 > Zcritical = 1.96, p < 0.05). The study concludes that teamwork has the prospect of making manufacturing organisations very effective, viable and sustainable. Specifically, it has the benefits of improved productivity and product quality, innovativeness and manpower development. Based on the findings, the study recommended among others that, for an improved product design with high quality that will appeal to customers’ satisfaction any day, teamwork should be encouraged in Nigerian manufacturing organizations. It is also recommended that team incentives and rewards should be strictly adhered to in order to boost team performance and effectiveness. Team members should be carefully selected so that members with requisite skills are selected to work towards achieving the required objectives. Key words: Prospects for sustainability and viability of manufacturing organizations and Team work approach.

Incentive Provision and Optimal Team Size for Managing Innovation

This paper analyzes a principal-agent-model with a principal, a manager, and a team of workers to investigate the incentive provision and optimal team size in a setting with uncertain productivity and team synergy effects which is typical for innovation environments. Workers are responsible for providing productive effort, whereas the manager performs monitoring and productivity risk-reducing efforts. We find that the incentive provision for productive and monitoring effort take the uncertain productivity into account, whereas the incentive provision for the productivity risk-reducing effort is independent of the risk level and the productivity. Furthermore, we find that the optimal team size depends on environmental factors and team effects, specifically, that increasing productivity risk requires smaller teams. Consequently, increasing project risk should be countervailed by downsizing the project instead of managing the risk. The interdependence between team size and incentive provision implies that organizational design and incentive design need to be optimized simultaneously.

An Experimental Investigation on Performance under Individual, Team, and Mix Incentive Schemes

It is a well-known fact that people respond to incentives; however, people respond differently on how these incentives are presented. This study aims...

Social Work Personnel Team Incentive Problem Research Based on Surveying of Chengdu

Social Work Personnel Team Incentive Problem Research Based on Surveying of Chengdu

Implementation research to improve quality of maternal and newborn health care, Malawi

ObjectiveTo evaluate the impact of a performance-based financing scheme on maternal and neonatal health service quality in Malawi.MethodsWe conducted a non-randomized controlled before and after study to evaluate the effects of district- and facility-level performance incentives for health workers and management teams. We assessed changes in the facilities’ essential drug stocks, equipment maintenance and clinical obstetric care processes. Difference-in-difference regression models were used to analyse effects of the scheme on adherence to obstetric care treatment protocols and provision of essential drugs, supplies and equipment.FindingsWe observed 33 health facilities, 23 intervention facilities and 10 control facilities and 401 pregnant women across four districts. The scheme improved the availability of both functional equipment and essential drug stocks in the intervention facilities. We observed positive effects in respect to drug procurement and clinical care activities at non-intervention facilities, likely in response to improved district management performance. Birth assistants’ adherence to clinical protocols improved across all studied facilities as district health managers supervised and coached clinical staff more actively.ConclusionDespite nation-wide stock-outs and extreme health worker shortages, facilities in the study districts managed to improve maternal and neonatal health service quality by overcoming bottlenecks related to supply procurement, equipment maintenance and clinical performance. To strengthen and reform health management structures, performance-based financing may be a promising approach to sustainable improvements in quality of health care.

Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment

Research summary: We develop and test a contingency theory of the influence of top management team (TMT) performance‐contingent incentives on manager–shareholder interest alignment. Our results support our theory by showing that although TMTs engage in significantly higher levels of acquisition investment when their average incentive levels increase, investors' responses to those large investments are generally negative. More importantly, however, we further find that within‐TMT incentive heterogeneity conditions that effect, such that investors evaluate TMTs' large acquisition investments more positively as the variance in those top managers' incentive values increases. Thus, within‐TMT incentive heterogeneity appears to increase manager–shareholder interest alignment, in the context of large acquisition investments.Managerial summary: We find that as the average value of TMTs' incentives increase, relative to their total pay, they invest more in acquisitions and investors' respond negatively to the announcement of those deals. However, we further show that investors respond more positively to acquisitions announced by TMTs whose members' incentive values vary (some TMT members hold higher incentives and others hold lower). Results imply that when TMT members hold differing incentives levels, they approach investments from divergent perspectives, scrutinize those investments more heavily, and make better decisions, relative to TMTs with similar incentives. They also suggest that boards seeking tighter manager–shareholder interest alignment may benefit from introducing variance into TMT members' incentive structures, as doing so appears to create divergent preferences that can improve team decision making. Copyright © 2016 John Wiley &amp; Sons, Ltd.

Securing the Continuity of Medical Competence in Times of Demographic Change: A Proposal.

BackgroundUniversity hospitals make up the backbone of medical and economic services of hospitals in Germany: they qualify specialist physicians, ensure medical research, and provide highly specialized maximum medical care, which other hospitals cannot undertake. In addition to this assignment, medical research and academic teaching must be managed despite a growing shortage of specialist physicians. By the year 2020, the need for the replacement of retired physicians and increased demand will total 30,000 positions. The situation will become more difficult because, on the whole, patients are becoming older and sicker and because specialist physicians are able to find more attractive working conditions in smaller hospitals, abroad, or outside of curative medicine.ObjectiveIn order to retain sufficient qualified employees, major improvements in quality are required in terms of working and training conditions. For this purpose, a sustainable innovation process is necessary, which incorporates solutions from outside of the health care sector in order to be able to learn from experiences and mistakes from other industries. The FacharztPlus project aims to find suitable measures in order to retain specialist physicians for more years after the completion of 5 years of professional training. This should determine the suitability of additional qualifications alongside the professional career and an expertise-related work organization oriented to different stages of life.MethodsStructured interviews, surveys, and repertory grids are used as preparation for cross-industry expert panels to create future work scenarios for university hospitals. Industries involved are harbor logistics (container terminal), airports, and digitized industrial production (“industry 4.0”) because these industries are also facing a shortage of qualified staff and have to respond to rapidly changing demands. Based on the experts’ scenarios, consensus groups will be established in each university hospital trying to reach consensus about the implementation of relevant factors in order to improve employee retention.ResultsWe expect these consensus groups to develop and introduce measures for more structured training procedures, individual and team incentives, organizational guidelines for better recruiting and retention in hospitals, models of flexible and attractive working conditions including shift work and vacation planning, and use of new learning tools (eg, tablet PCs and mobile phones).ConclusionsAll measures are implemented in the Department of Anaesthesiology, Intensive Care, Emergency Care and Pain Medicine at the University Hospital Muenster (UKM) with approximately 150 physicians and in the further 44 departments of the UKM and 22 teaching hospitals, which all together employ more than 5000 physicians. The measures will also be implemented at the university hospitals in Aachen, Rostock, and Greifswald. All decisions and measures will be discussed with representatives from hospital management and professional associations. Results will be presented at conferences and published in journals.

Who is attracted by teamwork? Evidence of multidimensional sorting from a real-effort experiment

We analyze the factors that drive an individual’s self-selection decision between (1) working individually and being paid for individual performance and (2) working on a team and being paid for team performance. While the literature has focused on task-specific ability as a self-selection criterion, we also investigate the effects of teamwork skills, expectations concerning the task-specific ability and teamwork skills of potential teammates, and task type. Thus we account for multidimensional sorting. Considering these additional factors might explain the empirical puzzle that some studies have found a positive relation between an individual’s task-specific skills and the propensity to join a team, and others found a negative relation. Confronting our predictions with data from a real-effort pen-and-paper experiment, we find that the less able are attracted by teamwork and team incentives, but teamwork skills and expectations concerning the ability of potential teammates might in fact compensate for this adverse self-selection effect. Regarding task type, we find that teamwork is more attractive if the task offers a high potential for complementarities between team members.

Support or competition? How online social networks increase physical activity: A randomized controlled trial

To identify what features of online social networks can increase physical activity, we conducted a 4-arm randomized controlled trial in 2014 in Philadelphia, PA. Students (n = 790, mean age = 25.2) at an university were randomly assigned to one of four conditions composed of either supportive or competitive relationships and either with individual or team incentives for attending exercise classes. The social comparison condition placed participants into 6-person competitive networks with individual incentives. The social support condition placed participants into 6-person teams with team incentives. The combined condition with both supportive and competitive relationships placed participants into 6-person teams, where participants could compare their team's performance to 5 other teams' performances. The control condition only allowed participants to attend classes with individual incentives. Rewards were based on the total number of classes attended by an individual, or the average number of classes attended by the members of a team. The outcome was the number of classes that participants attended. Data were analyzed using multilevel models in 2014. The mean attendance numbers per week were 35.7, 38.5, 20.3, and 16.8 in the social comparison, the combined, the control, and the social support conditions. Attendance numbers were 90% higher in the social comparison and the combined conditions (mean = 1.9, SE = 0.2) in contrast to the two conditions without comparison (mean = 1.0, SE = 0.2) (p = 0.003). Social comparison was more effective for increasing physical activity than social support and its effects did not depend on individual or team incentives.

저에너지건물 통합설계 인센티브 체계 비교 연구

본 논문은 저에너지 건축물 보급을 활성화하기 위하여 시행되고 있는 국내외 인센티브 제도를 비교분석하고 이를 통하여 국내 저에너지 건축물 인센티브 제도의 개선을 모색하기 위한 목적으로 한국, 캐나다, 미국, 싱가폴의 국가단위, 지방정부단위 제도를 분석 대상으로 하였다. 인센티브 제도의 체계는 1) 인센티브 종류 및 수혜자의 규정, 2)성능기준 및 평가방식의 정립, 3) 통합설계지원, 4) 재원의 확보를 근간으로 구성된다. 한국을 제외한 모든 국가들이 통합설계에 참여하는 전문가에 대한 인센티브 제도를 도입하고 있으며, 신축 중심 인센티브가 리모델링 건축물을 포함하는 방향으로 전환되고 있다. 인센티브 제도의 근간인 성능기준은 각 프로그램이 속한 국가 또는 지방정부가 규정하는 통합에너지성능분석기준에 따라 통합성능에 따른 지원이 주를 이루고 있으며, 개별 기술에 대한 지원을 보완하여 지원 범위 확대 경향을 보이고 있다. 통합 성능의 경우에도 초기 시뮬레이션에 의한 검증에서 실제 에너지사용량에 의한 검증으로 전환되어 시공품질 및 건물운영에 점차적으로 비중을 강화하고 있다. 통합 디자인 자체에 대한 지원과 자료 데이터베이스를 운영하여 성능기반 건축물 시장으로의 빠른 재편과 신산업 육성을 기대하고 있다. 안정적인 제도 운영을 위하여 재원확보가 필수적인데, 세금이 가장 일반적이고, 에너지 사업자 지원 또는 에너지 사용량에 따른 누진제를 통해 재원을 확보하는 보다 적극적인 재원확보 방안도 제시되고 있다. The purpose of this paper was to comparatively investigate the efficient building incentives in Korea and foreign countries and to seek strategies to enhance low energy building integrated design market infrastructure in Korea. The structure of incentive policies were composed of four main component: 1) types of financial aids and beneficiaries, 2) energy performance criteria and verification methods, 3) supports for low energy building integrated design, and 4) funding sources for incentive programs. Every overseas incentive program has adopted a design team incentive along with building owners incentive and the range of target buildings have been extended from new construction to remodeling projects. The main system of the program is the performance standard through which projects were investigated and the level of incentive are decided. Initially, the integrated performance has been investigated through simulation methods, but the construction performance evaluation and energy monitoring methods are emerging. In addition, the direct support and educational support for integrated design has been provided to enhance the foundation of relative markets. Financial funding is also a key component of the program and more aggressive funding strategies have been adopted.

Individual Versus Team-Based Financial Incentives to Increase Physical Activity: A Randomized, Controlled Trial.

More than half of adults in the United States do not attain the minimum recommended level of physical activity to achieve health benefits. The optimal design of financial incentives to promote physical activity is unknown. To compare the effectiveness of individual versus team-based financial incentives to increase physical activity. Randomized, controlled trial comparing three interventions to control. Three hundred and four adult employees from an organization in Philadelphia formed 76 four-member teams. All participants received daily feedback on performance towards achieving a daily 7000 step goal during the intervention (weeks 1- 13) and follow-up (weeks 14- 26) periods. The control arm received no other intervention. In the three financial incentive arms, drawings were held in which one team was selected as the winner every other day during the 13-week intervention. A participant on a winning team was eligible as follows: $50 if he or she met the goal (individual incentive), $50 only if all four team members met the goal (team incentive), or $20 if he or she met the goal individually and $10 more for each of three teammates that also met the goal (combined incentive). Mean proportion of participant-days achieving the 7000 step goal during the intervention. Compared to the control group during the intervention period, the mean proportion achieving the 7000 step goal was significantly greater for the combined incentive (0.35 vs. 0.18, difference: 0.17, 95% confidence interval [CI]: 0.07-0.28, p <0.001) but not for the individual incentive (0.25 vs 0.18, difference: 0.08, 95% CI: -0.02-0.18, p = 0.13) or the team incentive (0.17 vs 0.18, difference: -0.003, 95% CI: -0.11-0.10, p = 0.96). The combined incentive arm participants also achieved the goal at significantly greater rates than the team incentive (0.35 vs. 0.17, difference: 0.18, 95% CI: 0.08-0.28, p < 0.001), but not the individual incentive (0.35 vs. 0.25, difference: 0.10, 95% CI: -0.001-0.19, p = 0.05). Only the combined incentive had greater mean daily steps than control (difference: 1446, 95% CI: 448-2444, p ≤ 0.005). There were no significant differences between arms during the follow-up period (weeks 14- 26). Financial incentives rewarded for a combination of individual and team performance were most effective for increasing physical activity. Clinicaltrials.gov identifier: NCT02001194.

Team Incentives and Reference‐Dependent Preferences

We investigate a multi‐agent moral‐hazard model where agents have expectation‐based reference‐dependent preferences à la Kőszegi and Rabin (2006, 2007). We show that even when each agent's probability of success in a project is independent, a principal may employ team incentives. Because the agents are loss averse, they have first‐order risk aversion to wage uncertainty. This causes the agents to work harder when their own failure is stochastically compensated through other agents' performance. In the optimal contract, agents with high performance are always rewarded, whereas agents with low performance are rewarded if and only if other agents' performance is high.

Task Ordering in Incentives Under Externalities

In a two-task team project with observable task outcomes, optimal incentives prioritize tasks differently depending on task externalities. When the tasks are independent, Principal follows a decreasing order by placing more essential task first. A task is more essential if its failure compromises the overall project's chance of success from a task-specific cutoff level by a greater percentage. This definition has no systematic relations to the variance of task outcomes. In particular, a more risky task can be less essential or more essential. Under externalities, essentiality and impact jointly determine the optimal ordering. A task with much higher impact can be performed early even if it is less essential. Optimal task ordering thus raises subtle new issues and forms an integral part in team incentives. Our analysis provides some contrast with recent team incentives results.

Teams in Relational Contracts

We analyze relational contracting between a principal and a team of agents where only aggregate output is observable. We deduce optimal team incentive contracts under different set of assumptions, and show that the principal can use team size and team composition as instruments in order to improve incentives. In particular, the principal can strengthen the agents' incentives by composing teams that utilize stochastic dependencies between the agents' outputs. We also show that more agents in the team may under certain conditions increase each team member's effort incentives, in particular if outputs are negatively correlated.

Financial team incentives improved recording of diagnoses in primary care: a quasi-experimental longitudinal follow-up study with controls.

BackgroundIn primary care, financial incentives have usually been directed to physicians because they are thought to make the key decisions in order to change the functions of a medical organization. There are no studies regarding the impact that directing these incentives to all disciplines of the care team (e.g. group bonuses for both nurses and doctors) may have, despite the low frequency with which diagnoses were being recorded for primary care visits to doctors. This study tested the effect of offering group bonuses to the care teams.MethodsThis was a retrospective quasi-experimental study with before-and-after settings and two control groups. In the intervention group, the mean percentage of visits to a doctor for which a diagnosis was recorded by each individual care team (mean team-based percentage of monthly visits to a doctor with recorded diagnoses) and simultaneously the same data was gathered from two different primary care settings where no team bonuses were applied. To study the sustainability of changes obtained with the group bonuses the respective data were derived from the electronic health record system for 2 years after the cessation of the intervention. The differences in the rate of marking diagnoses was analyzed with ANOVA and RM-ANOVA with appropriate post hoc tests, and the differences in the rate of change in marking diagnoses was analyzed with linear regression followed by t-test.ResultsThe proportion of doctor visits having recorded diagnoses in the teams was about 55 % before starting to use group bonuses and 90 % after this intervention. There was no such increase in control units. The effect of the intervention weakened slightly after cessation of the group bonuses.ConclusionGroup bonuses may provide a method to alter clinical practices in primary care. However, sustainability of these interventions may diminish after ceasing this type of financial incentive.