Team Incentives, Social Cohesion, and Performance: A Natural Field Experiment

We conduct a Öeld experiment in a Dutch retail chain with 122 stores to study the interaction between team incentives, team social cohesion, and team performance. Theory predicts that the e§ect of team incentives on team performance depends on a teamís social cohesion. In particular, free-riding should be weaker when co-workers care more about each other. Conversely, team incentives may lead to more co-worker support or to higher peer pressure and thereby can a§ect the teamís social cohesion. We introduce short-term team incentives in a randomly selected subset of stores and measure for all stores, both before and after the intervention, the teamís sales performance, the teamís social cohesion as well as co-worker support and peer pressure. The average treatment e§ect of the team incentive on sales is 1.5 percentage points, which does not di§er signiÖcantly from zero. In line with theory, the estimated treatment e§ect strongly increases in social cohesion as measured before the intervention. We Önd that social cohesion itself is not a§ected by the team incentives. Our study illustrates the potential of complementing a Öeld experiment with ex ante and ex post questionnaire data collection for the study of management practices, workplace behavior, and performance.