Rewarding the team : an investigation of the direct and indirect effects of team-based reward practices on team cooperation and performance

The movement toward team-based approaches to organizing work has resulted in experimentation with alternative human resource practices. Rewards contingent upon team, rather than individual, performance represent one such practice. The primary purpose of the present study was to extend current research on team rewards by examining the direct and indirect effects of several reward characteristics (reward size, frequency of reward payout, allocation method) on team behavior and performance. Secondly, affective reactions to team rewards, as well as determinants of those reactions, were explored in an attempt to explain additional variance in team cooperation. These issues were investigated in a field study involving 330 employees and 46 team leaders representing 57 teams from 10 different organizational units. Multiple data sources were utilized to provide a more methodologically rigorous test of the proposed hypotheses. Analyzing data at the team level, several significant predictors of satisfaction with team rewards were identified, including perceived outcome interdependence and justice perceptions. Frequency of reward payout was significantly related to perceived outcome interdependence among team members. In addition, reward size was directly related to team performance. No support for the mediating role of perceived outcome interdependence or affective reactions was found. Results are discussed for their theoretical and applied significance.