Creative Performance in a Group Setting: The Impact of Incentive Compensation Scheme and Relative Performance Feedback

This paper investigates whether the presence of relative performance feedback has different effects on group performance (measured as creativity-weighted performance) and on group behaviour (measured as group synergy and the extent of task division among group members) when groups are compensated with a group incentive compensation scheme based on quantity only or on both quantity and creativity. Results of a two-stage computer lab experiment show that although groups compensated for both quantity and creativity put a lot of effort towards reaching higher creativity-weighted performance scores (as can be derived from their behaviour), they are outperformed by groups compensated for quantity only. Furthermore, our findings indicate that relative performance feedback strengthens this counterintuitive relation between group incentive compensation scheme and creativity-weighted performance. These findings are further explained by analysing the role of group behaviour into detail. Our study has several implications for practice in terms of the design of group incentive compensation schemes and reporting systems related to providing feedback in organisations.

This seminar is organised by the Erasmus Accounting Research Group.