Citation:
Freeman RB, Pan X, Yang X, Ye M. "Equal Sharing Motivates Lower-Ability Workers in Team Production," . VoxEU-CEPR. 2022;(November 5).
Abstract:
Most firms organise production around teams comprised of workers with varying abilities, and compensate workers according to their own or their team’s output. But little is known about how team members with different abilities respond to compensation thresholds, and analyses of teams in business settings typically focus on top performers. This column compares lower-ability participants in an experiment conducted among university students in China. Participants assigned to equal-sharing compensation schemes were more productive than those assigned to winner-takes-all, suggesting that organisations should consider how lower-ability workers respond to shared rewards.