Team building and hidden costs of control

Gerhard Riener and Simon Wiederhold ()

Journal of Economic Behavior & Organization, 2016, vol. 123, issue C, 1-18

Abstract: In a laboratory experiment, we investigate the interaction of two prominent firm strategies to increase worker effort: team building and control. We compare a team-building treatment where subjects initially play a coordination game to gain common experience (CE) with an autarky treatment where subjects individually perform a task (NCE). In both treatments, subjects then play two-player control games where agents provide costly effort and principals can control to secure a minimum effort. CE agents always outperform NCE agents. Conditional on control, however, CE agents’ effort is crowded out more strongly, with the effect being most pronounced for agents who successfully coordinated in the team-building exercise. Differential reactions to control perceived as excessive is one explanation for our findings.

Keywords: Employee motivation; Principal-agent interaction; Team building; Experiment (search for similar items in EconPapers)
JEL-codes: C92 D03 J22 M54 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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Working Paper: Team building and hidden costs of control (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:123:y:2016:i:c:p:1-18

DOI: 10.1016/j.jebo.2015.12.008

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