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Incentives That Induce Task-Related Effort, Helping, and Knowledge Sharing in Workgroups

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  • Enno Siemsen

    () (Department of Business Administration, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820)

  • Sridhar Balasubramanian

    () (Department of Marketing, Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599)

  • Aleda V. Roth

    () (Department of Management, College of Business and Behavioral Science, Clemson University, Clemson, South Carolina 29634)

Abstract

Cooperation and coordination among employees can yield significant productivity gains. In this study, we explore the design of optimal incentive systems that induce task-related effort, helping, and knowledge sharing within workgroups. We identify three distinct types of employee linkages that must be accommodated in the design of effective incentive systems: (1) outcome linkages, whereby the outcome of one employee's task is influenced by that of another; (2) help linkages, whereby each employee can directly expend effort on helping another; and (3) knowledge linkages, whereby each employee can share job-related knowledge with another. We analytically investigate the effect of each type of employee linkage, and some combinations of these linkages, on the optimal design of incentive systems. Our analytical results demonstrate how, by optimally weighting individual-level and workgroup-level incentives, managers can balance the need to induce cooperation and coordination among employees with the need to manage employees' incentive-related risk. Counter to conventional wisdom, we also demonstrate that both group and individual incentives are necessary to facilitate cooperative behaviors such as knowledge sharing in workgroups. Further, we empirically test some of the insights developed from the analytical models; our empirical findings support these analytical results.

Suggested Citation

  • Enno Siemsen & Sridhar Balasubramanian & Aleda V. Roth, 2007. "Incentives That Induce Task-Related Effort, Helping, and Knowledge Sharing in Workgroups," Management Science, INFORMS, vol. 53(10), pages 1533-1550, October.
  • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:10:p:1533-1550
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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0714
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    References listed on IDEAS

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    5. Gibbons, Robert & Murphy, Kevin J, 1992. "Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 468-505, June.
    6. Yeon-Koo Che & Seung-Weon Yoo, 2001. "Optimal Incentives for Teams," American Economic Review, American Economic Association, vol. 91(3), pages 525-541, June.
    7. Emmanuelle Auriol & Guido Friebel & Lambros Pechlivanos, 2002. "Career Concerns in Teams," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 289-307, Part.
    8. Sridhar Balasubramanian & Pradeep Bhardwaj, 2004. "When Not All Conflict Is Bad: Manufacturing-Marketing Conflict and Strategic Incentive Design," Management Science, INFORMS, vol. 50(4), pages 489-502, April.
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    Cited by:

    1. Kenneth L. Schultz & Tobias Schoenherr & David Nembhard, 2010. "An Example and a Proposal Concerning the Correlation of Worker Processing Times in Parallel Tasks," Management Science, INFORMS, vol. 56(1), pages 176-191, January.
    2. Thommes, Kirsten & Vyrastekova, Jana & Akkerman, Agnes, 2015. "Behavioral spillovers from freeriding in multilevel interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 78-87.
    3. repec:eee:labeco:v:46:y:2017:i:c:p:110-117 is not listed on IDEAS
    4. Sadrieh, Abdolkarim & Schröder, Marina, 2017. "Acts of helping and harming," Economics Letters, Elsevier, vol. 153(C), pages 77-79.
    5. Chieh-Peng Lin & Sheng-Wuu Joe, 2012. "To Share or Not to Share: Assessing Knowledge Sharing, Interemployee Helping, and Their Antecedents Among Online Knowledge Workers," Journal of Business Ethics, Springer, vol. 108(4), pages 439-449, July.
    6. Sriram Narayanan & Sridhar Balasubramanian & Jayashankar M. Swaminathan, 2009. "A Matter of Balance: Specialization, Task Variety, and Individual Learning in a Software Maintenance Environment," Management Science, INFORMS, vol. 55(11), pages 1861-1876, November.
    7. Enno Siemsen & Aleda V. Roth & Sridhar Balasubramanian & Gopesh Anand, 2009. "The Influence of Psychological Safety and Confidence in Knowledge on Employee Knowledge Sharing," Manufacturing & Service Operations Management, INFORMS, vol. 11(3), pages 429-447, April.
    8. repec:eee:jocaae:v:10:y:2014:i:2:p:100-114 is not listed on IDEAS

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