Small Group Incentives

Abstract

A review of the effects of small group incentives indicate that equally-divided small group incentives sustain high levels of productivity and employee satisfaction. Moreover, for groups of 2–12 members, their effects have been comparable to those reported for individual monetary incentives. Although some studies found that differentially-divided group incentives resulted in higher performance than individual incentives and equally-divided group rewards, they were perceived as less fair and satisfying, perhaps due to their competitive nature. Few studies have examined the effects of group incentives on social interactions or the performance of tasks that require interdependent contributions by group members. While results pertaining to the effectiveness of small group monetary incentives have been consistent, questions remain. Particularly important are studies of the relative effects of individual and group feedback when incentives are provided, the effects of group incentives when there are distinct high and low performers, and their effects when pay differences between individual and group incentive conditions are greater.

Key Words:

• Small groups
• group vs. individual incentives
• equal vs. differential group rewards
• rewards and group member satisfaction