Team incentives, human capital and job satisfaction

The purpose of this research project is to better understand the causes and nature of teamwork and team incentives, and how these can promote, or obstruct, performance and job satisfaction. Team production is one of the defining characteristics of a firm, and there seems to be a consensus that teamwork is particularly important in knowledge-intensive organizations. However, empirical findings suggest that the use individual incentives, as opposed to team incentives, is higher in knowledge-intensive firms. In a first part of the project we aim to analyse, explain and explore the consequences of these empirical observations. This first part will investigate the conditions for providing team incentives when (i) true performance is difficult to verify and in centive contracts are therefore incomplete, and (ii) workers possess indispensable human capital. It appears that these features may severely constrain a firm's ability to implement team based payment schemes, and have important implications for a knowled ge-intensive firm's ability to induce cooperation between its employees. This in turn raises the question of whether the firm can allocate ownership/control rights strategically in order to promote cooperation. We thus seek to provide some new answers to the seminal question: How should the firm optimally allocate control rights to its workers? A second part of the project will investigate i) how incentive schemes can induce social preferences and ii) how team incentives can promote, or possibly obstruc t, psychosocial work environments and job satisfaction. The latter sub project is a case study of team performance, work environment and job satisfaction in a large knowledge-intensive firm. Analyzing effects of team incentives in this organization will e nable us to develop and test new hypotheses on the relationship between team incentives and work environments as well as mediating factors such as manager skills, diversity regarding team composition and tasks.