Business that reward teams for good work should instead consider doling out individual recognition to those members of the team who perform best, new research finds.
Recognizing individual employees for a job well done boosts both the performance of their co-workers and the team as a whole, according to a study recently published in the Journal of Applied Psychology.
The research goes against the conventional wisdom that says rewarding individual efforts in teams increases competition, rather than helping the group's overall performance, said Bradley Kirkman, co-author of the study. Kirkman is head of the Department of Management, Innovation and Entrepreneurship in North Carolina State University's Poole College of Management.
When employees are rewarded for their own efforts, other members of the team work hard to emulate those top performers, Kirkman said.
"Rather than stimulate resentment in a team — as might be the case with financial rewards — public recognition of high performers actually motivates a strong desire to succeed in the rest of the team members," he said in a statement. "We call these 'recognition spillover effects' because they transfer from one team member to another."
In addition, since each team member is changing his or her behavior to match the actions of the most successful team member, the performance of the whole team rises, the research found. [See Related Story: Speak Up! Dissension Is Key to Successful Teamwork ]
"And we found that these spillover effects are magnified if the reward recipient is someone who is central to the team, i.e., someone that other team members often turn to for assistance," Kirkman said.
For the study, researchers had more than 250 students make small boxes on their own and then combine into groups to build the boxes into towers. The researchers praised the top performer in half of the teams, and then repeated both assignments.
In this second round, teams whose top performer had been praised were found to improve significantly at both the individual and team tasks. There was no improvement among teams that didn't have a team member singled out for his or her efforts.
The study's authors then tested the findings on workers at a manufacturing company in China. Some divisions of the company implemented "employee of the month" programs to recognize top performers on teams. The researchers found similar results to the first tests, in that only those divisions that rewarded top performers saw improvements in both individual and team performance.
"Those findings tell us that recognizing individual team members can supercharge team performance," Kirkman said.
The researchers said businesses that are considering implementing this approach should consider two factors first.
"First, make sure that all team leaders in the company are using these reward programs," Kirkman said. "We found that when only some teams have a reward program, performance actually drops in teams that don't have the program."
In addition, it is important that team leaders are fair when determining which teams members to recognize, he said.
"All of the positive benefits of recognizing individual team members are likely to disappear if the awards are based on arbitrary, nonwork factors or the rewarding of 'teacher's pets,'" Kirkman said.
The study was co-authored by Ning Li, an assistant professor at the University of Iowa; Brad Harris, an assistant professor at Texas Christian University; Xiaoming Zheng, an assistant professor at Tsinghua University in China; and Xin Liu, an associate professor at Tsinghua University.