Study finds final year individual bonuses are counter-productive
A new study by researchers in the UK and Australia has found it makes better business sense to reward team performance rather than provide individual bonuses – and that group rewards generate the top-performing individuals.
Researchers from our University worked with colleagues from University of Sydney and Western Sydney University in Australia and published in the Journal of Business Research.
Dan Ladley (pictured), Senior Lecturer in Finance in the Department of Economics, at our University, Ian F. Wilkinson, Professor of Marketing, University of Sydney; and Louise Carley Young, Professor of Marketing, Western Sydney University found group rewards can produce more cooperative, better performing groups and also better performing individuals than individual-based reward systems.
The study was inspired by theories of group versus individual selection in biology and especially experiments to breed better egg-laying hens. The norm in the industry has been to do this by breeding from the best egg-layers, which increased egg production but also produced cages of aggressive “mean bad birds” with short life spans, raising serious animal welfare concerns. William Muir tried another approach by breeding from all the hens in the best laying cages, not just the best layers. This quickly produced “kind friendly chickens” who got on well, had normal life spans and better quality eggs.
- The impact of individual versus group rewards on work group performance and cooperation: A computational social science approach in the Journal of Business Research