How to increase team performance‪?‬

During the last decades, researchers in the area of personal economics have developed a bundle of possibilities to increase team performance. This paper wants to give an overview of the latest incentive schemes as well as concepts of peer pressure, norms and mutual monitoring. The findings of this paper are that a well-balanced integrated team incentive plan, which includes elements of rewards and of pressure is expected
to be the most promising. The ideas in this paper are applied to a basic economic model that allows a deeper understanding of the concepts. During the last 20 years, teamwork has become prevalent in many ¯rms. While 1987,
27% of the ¯rms supported self-managed teams, 1999 this number rose to 72% (Lazear
and Shaw (2007)). Together with the increment of usage, the research of teams as
a part of personal economics has increased. Many advantages of teams have been
identi¯ed as reasons for the augmented use of teams. But also the negative e®ects,
organization, coordination and free-riding have been further analyzed. Special attention
was given to the possibilities of increasing the team performance and mitigating the
negative e®ects. During the last decades, researchers and practitioners have developed
a huge array of incentive schemes and bonus plans. These incentives can be monetary,
non-monetary, they can be based on outcomes of the team and team members or on
acquainted team skills. In addition to the incentive schemes, concepts of peer-pressure,
mutual monitoring and punishments were further analyzed and improved. Today, an
integrated, well-balanced usage of the methods promises a considerable improvement
of team performance.