Four Groups Blog

I read a quick review of “Working With Pay Pals” on the HBS Working Knowledge site. While the message isn’t exactly earth shattering, the value people place on their relationships in comparison to their pay was refreshing.

“The things that the workers care about go beyond their own pay,” (the author Imran) Rasul is quoted as saying. “The workers also care about the pay of other people.”

This story in Chicago GSB’s publication Capital Ideas looks at research conducted with fruit pickers and how they were incentivised to be more productive. An interesting subplot arose from studying how the production of workers increased or decreased when they were paired with friends. Under the piece rate plan, there was no loss in productivity among friends working side by side, but productivity decreased by an average of 21 percent when friends worked together in a relative incentive program. Why? In a relative program, one worker’s gain is another worker’s loss.

If nothing else, focussing competition externally rather than internally, certainly amongst close colleagues and teams, is the key. We’ve also got some ideas on how to do this via our own approach to team building.