Individual Incentives versus Team Performance: Lessons from a Game of Charades
Organization Management Journal
In this article, we describe a modified game of Charades that was developed to facilitate a discussion on the basic principles of effective reward system design. Students are organized into small groups. Incentive schemes are then manipulated so that one player within the group strives for an individual incentive, while the rest of the team play for a group reward. Through this simple and "fun" activity, students learn firsthand what happens when individual and team interests and incentives are
... not aligned. This experiential learning activity also offers excellent opportunities to discuss group dynamics, communication and coordination, and the importance of maintaining a systemic view of organizational performance. 55 Steve Kerr's classic article "On the Folly of Rewarding A, while Hoping for B" also emphasizes how well-meaning reward systems do not achieve what they set out to accomplish. Kerr (1975; 1995) provides several examples of how reward systems become "fouled up" such that undesired behaviors are reinforced, while the desired behaviors are ignored or unrewarded. Consistent with reinforcement theory, people pay careful attention to what is being measured and rewarded because these cue them on how to behave. Kerr emphasizes that managers need to be very careful about identifying what they are trying to achieve, and then determining whether or not they are rewarding appropriately. It is noteworthy that a 1995 polling of Academy of Management Executive (AME) advisors 20 years after Kerr's article was first published showed that 90 percent of respondents believe Kerr's folly is still prevalent among corporations. Respondents to the AME poll cite three major reasons for why this folly persists today: a) the reluctance or inability of corporations to rethink and retool their traditional performance management systems and rewards practices; b) the lack of a broader systems view of key performance results for the organization; and c) the continued focus on short-term results by managers and shareholders ("More on the Folly," 1995).