Cooperating Teams and Competing Reward Strategies: Incentives for Team Performance and Firm Productivity

Abstract

Managers and executives from 257 organizations completed mailed surveys investigating relationships among reward strategies, task interdependence, team performance, and firm productivity. All measures attained at the firm level. As expected, firms that based employee rewards on either personal or collective output tended to demonstrate higher levels of productivity. Output-based reward strategies had no direct relationships, however, with team performance. Also as expected, task interdependence moderated the relationship between rewards based on human capital and team performance. Team performance was highest when firms with complex task interdependence used human capital strategies to reward employees.