Group rewards result in higher performance

Posted by  Shawn Callahan —January 8, 2009
Filed in Anecdotes, Collaboration

When I was at IBM leading the software services group in Melbourne I suggested in one of our leadership meetings that we should introduce a set of group-based incentives. I was howled down and accused of being a communist. I’m not kidding. While I know fact, data and rationale alone cannot persuade someone to change their mind (and if not used carefully can reinforce the status quo – see the confirmation bias), I’d wish I’d known about this study described in Keith Sawyer’s book, Group Genius.

Ruth Wageman spent four months studying more than eight hundred service technicians in 152 groups at Xerox Corporation. One-third of the groups has assignments that needed only one technician to solve, one-third worked on more complex tasks that required teamwork to solve, and one-third worked on assignments that required some solitary work and some teamwork. Wageman then manipulated the incentive structure: manager feedback on how well they were performing, merit pay increases, profit sharing. Sixty of the groups got group rewards, fifty-five got individual rewards, and seventy-seven got a hybrid combination of both.

The group reward condition resulted most consistently in high performance, although individual rewards worked just as well for the teams that were assigned solitary tasks. But when the task required teamwork, the group reward resulted in the highest effectiveness. (Sawyer, 2007:72)

Sawyer, K. (2007). Group Genius: The Creative Power of Collaboration. New York, Basic Books.

Wageman, R. (1995). “Interdependence and Group Effectiveness.” Administrative Science Quarterly 40: 145-180.

About  Shawn Callahan

Shawn, author of Putting Stories to Work, is one of the world's leading business storytelling consultants. He helps executive teams find and tell the story of their strategy. When he is not working on strategy communication, Shawn is helping leaders find and tell business stories to engage, to influence and to inspire. Shawn works with Global 1000 companies including Shell, IBM, SAP, Bayer, Microsoft & Danone. Connect with Shawn on:

2 Responses to “Group rewards result in higher performance”

  1. Ron Lubensky Says:

    Sawyer’s book was on my holiday reading list too. Whilst I dislike the title, I enjoyed many of the stories, including the one you recite. But as a researcher I was hoping for more insight into how he conducts the various levels of interaction analysis. I should not have expected it in a book intended for a lay audience. His academic article in the excellent “Cambridge Handbook of The Learning Sciences”, which he edited, is more revealing.

  2. Naomi Eve Says:

    Thanks for this post – perfect timing, as last week our staff meeting dealt with the concept of recognition and reward. I’ve always been uncomfortable with the idea of singling out an individual person for praise on a project (I work in IT), and it’s nice to have some research to back me up on my advocating of a lower-key form of recognition. I’ve forwarded this post to our HR department to see if they find any value in it!

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