Incentive schedules, productivity, and satisfaction in work groups: A laboratory study

Abstract

A factorial laboratory study examined the effects of individual incentives and group incentives. The subjects were 144 college students who worked in three-person groups on a card-sorting task. Both individual and group incentives significantly increased task performance. The experimental condition which contained both an individual and group incentive resulted in the highest level of performance, but also resulted in perceptions of the pay system as being unfair. Personal pay satisfaction was not affected by any pay condition. Results also were not in accord with predictions of equity theory concerning both performances and satisfaction. It was concluded that current conceptions of pay inequity may have to be modified to include a distinction between personal pay satisfaction and the perceived fairness of a pay system.