Incentives and cooperation: the joint effects of task and reward interdependence on group performance

We examine the joint effects of task interdependence and reward interdependence on group behavior and performance. We develop a model that predicts that task and reward interdependence will interact to increase performance, and present results of a laboratory experiment that confirms our prediction. We explore the efficacy of group reward systems for different task designs, and the relationship between cooperation and performance. We confirm earlier results on the weakness of the free-rider effect in small face-to-face groups. We also find, surprisingly, that while reward interdependence is important to performance, task interdependence, but not reward interdependence, drives observed cooperative behavior. This last result suggests caution in interpreting the efficacy of changes in the design of work. Such changes, if unaccompanied by changes in the design of the reward system, are likely to appear successful in terms of observed cooperation, but may not enhance performance. © 1997 by John Wiley & Sons, Ltd.