Task interdependence in teams: how to structure relative performance information to improve team performance

Teams are common in firms and vary in the level of interdependence among team members’ tasks. As tasks become more interdependent, team members need to both coordinate their actions and exert high individual effort to achieve high team performance. This study uses an experiment to investigate how relative performance information (RPI) interacts with task interdependence to affect team performance. Specifically, we examine the effects of individual RPI, based on team members’ contributions to team performance, and team RPI, based on team performance, on team performance in the presence and absence of task interdependence. Our results show that, compared to no RPI, both individual RPI and team RPI increase team performance when task interdependence is absent. However, in the presence of task interdependence, individual RPI creates conflicting mindsets of coordination and competition, hindering coordination and subsequently reducing team performance, whereas team RPI increases team performance by motivating individual effort and strengthening team cohesion, which, in turn, enhances coordination. Our results expand our knowledge of how RPI in team task settings interacts with task interdependence in affecting team performance and highlight the benefits of team RPI as a low-cost, effective control in promoting team performance at varying levels of task interdependence.