Team Building and Incentive Schemes in Collaborative Projects

Abstract

We study the effects of incentive schemes and their interaction with team-building activities to reduce delays in collaborative projects among peers. We introduce a stylized model of a project involving two sequential tasks performed by two workers, each responsible for one task. Workers get a fixed salary, choose between working on the project or taking an alternative option that offers a private benefit but delays their task completion, and incur a penalty that depends either on the delay of their own task (individual incentives) or the delay of the project (group incentives). Based on our analytical results, we conjecture that workers delay their tasks under both group and individual incentives, especially when facing a high alternative option and a large slack. We also conjecture that group incentives lead to shorter task delays than individual incentives. Finally, we predict that the team-building activity leads to a shorter project completion time when coupled with group incentives. To test these predictions, we conduct an experiment replicating the theoretical model, varying the incentives scheme (individual vs. group) and the initial activity that subjects participate in (a team-building activity vs. a control). We find that task delays increase both with the value of the alternative options and the slack. While there are no significant differences in task completion times across incentive schemes, regardless of the initial activity, we find that the team-building activity leads to significantly shorter delays in the second task than the control under group incentives, but not under individual incentives. Our experimental design also enables us to disentangle the behavioral drivers behind these results.

Keywords: behavioral operations management, experiments, collaboration, project management