Why bonuses should be given to teams, not individuals

Teams perform better when bonuses are given to groups rather than individuals, according to new research.

The creators of the study even go so far as to suggest that individuals who are poor performers might be necessary to the group as a whole. “We call them self-sacrificers and believe their role is underappreciated and misunderstood,” say the researchers, who represent the University of Leicester in the UK, the University of Sydney and Western Sydney University in Australia, and who published their findings in the Journal of Business Research.

The idea for the study came from farming, and attempts to breed better egg-laying hens. Researchers found that separating out the best layers did not, in fact, lead to maximum egg production. Normally, hens are divided into groups according to their performance. This resulted in a split between happy high achievers and aggressive under-performers who had shorter life spans. But putting all chickens, regardless of their output, in the same environment resulted in “kind, friendly chickens”, all of whom produced better eggs.

That idea was then applied to groups of working humans. Computer models were created that allowed for all types of group situations to be considered. Over 14,000 computer games were then examined to understand the effects of individual and group rewards. The conclusion: individual rewards are much like the nicer cages for good chickens: they produce a number of non-cooperative individuals. Group rewards, meanwhile, work better because they encourage a supportive group ecology.

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Author: Donald Armbrecht is a freelance writer and social media producer.

Image: Basketball players celebrate in Sao Paulo September 21, 2006. REUTERS/Paulo Whitaker