Incentives and Computing Systems for Team-Based Organizations

Facing increasingly complex tasks involving coordination, communication and interactions among multiple decision makers, organizations are undergoing a transition, experimenting with new forms such as the team-based structure, and investing heavily in network-based computing to support team activities. We take the position that for the new form to succeed, and for computing investments to pay off, the organizational designer must consider complementarity effects between incentives, IS design, and organizational and task characteristics. Since these factors impact group performance through complex interactions, a change in one factor necessitates changes in others. We develop a stylized, analytical model of group/team interactions involving computing support, and study the impact of various design factors and their interactions on group productivity. Key research issues include the choice of a team/group reward structure, the impact of team composition and computing system features on the overall payoff, incentives for monitoring peers and their effect on group output, the time allocation of group members between peer monitoring and task effort, and the effect of task interdependence on monitoring incentives. The theoretical model provides a set of propositions showing how interactions between the chosen reward system, system design features and organizational factors determine members’ behavior (e.g., the extent of free riding and shirking) and subsequently the organizational payoff. These results provide broad qualitative implications for designing incentive schemes and information systems for appropriating maximum organizational value in team-based environments.