טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentLevy Racheli
SubjectThe Impact of Pay for Performance Structure on Help-Giving
DepartmentDepartment of Industrial Engineering and Management
Supervisor Mr. Peter Bamberger


Abstract

Teams are increasingly being used as a primary work unit within organizations (Guzzo and Dickson, 1996). With this growing emphasis on teamwork, many organizations are seeking better ways to modify their existing compensation systems in order to enhance the efficacy of this emerging form of work. (Kerrin and Oliver, 2002). While pay for performance (PFP) systems have been found to enhance firm performance (Gerhart and Milkovich, 1990; Welbourne and Andrews, 1996), little research has been conducted regarding the way in which alternative pay for performance systems may influence the dynamics of team processes that undoubtedly serve as the basis of team performance. Our research fills this current gap by examining the impact of varying forms of pay for performance (Individual PFP based, Team PFP based or combination of individual and team PFP-based) on one critical set of team processes -- namely help giving and two sub-processes Autonomous help giving (making the recipient more independent in the future) and Dependent help giving (making the recipient more dependent in the future) -- under two conditions of risk - high vs. low (PFP accounting for 33% versus 66% of total potential pay). Using a laboratory simulation, we found that individuals gave significantly more help to their team members under conditions of team-based (relative to individual-based or mix-based) pay and that relative to the team and mixed conditions, a significantly greater proportion of the help given under individual pay conditions was dependent in nature. The first effect was found to be strongest under high-risk conditions.