The Impact of Individual versus Group Rewards
on Work Group Performance and Cooperation
Dizon, Maria Rocel F. and Gomez, Charlie James F.
Abstract The purpose of this study is to examine the effect
of individual versus group evaluation and reward systems on
work group behavior and performance under different task
conditions. The methods used are computational social
methods using Agent Based Models to simulate work group
interactions as different forms of iterated games. Group based
systems outperform individual based and mixed systems,
producing more cooperative behavior, the best performing
groups and individuals in most types of interaction games. A
new role emerges, the self-sacrifice who plays a critical role in
enabling other group members and the group, to perform
better at their own expense. This research suggests
opportunities for model development and guidelines for
designing real world experiments. It helps firms engineer
better performing work groups as well as the design of other
business systems. It also identifies mechanisms by which
cooperation can be developed in social systems.
Index Terms Agent based models, Complex systems,
Computational social science, Cooperation, Incentive, Iterated
Group versus individual reward systems, Work groups.
I. INTRODUCTION
Much of the work of firms is carried out using
work groups or teams of interacting individuals, such as in
production processes, the development of products and
services, service delivery and in managing operations
(Cummings, 2004). As one manager comments: We think
everything worth doing is done by groups, not by
individuals (Weber, Holmes, & Palermi, 2005). Prior
research shows that cooperative behavior among work
group members plays an important role with more
cooperative groups outperforming less cooperative ones
(Kozlowski & Bell, 2003).
Useful as such studies are, they tell us little about
how and why cooperative behavior emerges and continues
in work groups and how managers can engineer greater
cooperation. As Kozlowski and Ilgen (2006) conclude,
based on an extensive review of the literature, the
dynamics inherent in team processes are still somewhat
elusive. Developing cooperative behavior in work groups
is not easy because of conflicts between individual and
group interests. This is especially so when groups comprise
individuals with different backgrounds, expertise and
interests. Such groups tend not to share information, not to
learn from each other or to be flexible in terms of their
workloads (Gratton & Erickson, 2007).
More generally, the evolution of cooperation in
society, especially among strangers and anonymous
opponents is still an unresolved issue (Hammerstein, 2003).
Research shows that in general people show high levels of
cooperative and pro-social, behavior towards others, even
to strangers and anonymous others (Henrich et al., 2001).
This is true of primitive societies and societies with large
scale institutions such as market integration and world
religions (Henrich et al., 2010; Woodside & Zhang, 2013).
Managers have several ways of potentially improving
work group cooperation and performance. One method is to
use group or team rewards but despite hundreds of studies
examining team rewards, the conditions under which team
rewards will be effective are unclear (Aimea, Meyer, &
Humphrey, 2010). Prior research focuses on the moderating
effect of task interdependence and the rewards for
cooperation versus competition (Aimea et al., 2010; Chan,
Li, & Pierce, 2014). For example, Wageman (1995) shows
that team effectiveness is highest in work groups in which
the rewards and tasks have pure individual designs those
in which individual rewards and performance are
independent of the performance other group members or
pure group designs, where individual rewards and
performance of group members are completely
interdependent such that the performance and rewards of
one member entirely depends on the others
performance. Chan et al. (2014) show that team based
rewards enhance performance when worker ability is
heterogeneous, which makes cooperation more important in
completing tasks. The problem is that group tasks are
usually a mix of group and individual interests, a mixture of
cooperative and competitive incentives, which leads to the
central research question considered here: For what types of
group tasks do group or team based rewards outperform
individual based rewards?
II. SIGNIFICANCE OF THE STUDY
These studies have important implications for
researchers and managers in designing and implementing
evaluation and reward systems. They point to key types of
real world experiments that need to be conducted to test the
effects of evaluation and reward schemes on group behavior
and performance. This includes the need to allow for group
interaction effects which are not the norm. The results can
also help guide managers in designing reward systems for
different types of work group conditions.
III. THE PROBLEM
The study aimed to answer the following questions:

1. How does rewards system affect the performance of a
group and an individual?
2. How to determine the conditions in which individual
or group selection is greater?
3. Which among the groups or individuals do much
better in task performance?
IV. SCOPE AND LIMITATION
This study covers groups and individuals performing a
task in an organization to determine the impact of rewards
to an individual and group work performance.
V. METHODOLOGY
This section presents the research design, sources of data
and data gathering procedure of this study. It also contains
the research instrument and the data analysis used in
analyzing and interpreting gathered data.
Research Design
Research design is used to make decision with
regards to specific methods, techniques and procedures
applied in the conduct study. The study entitled The
impact of individual versus group reward on work group
performance and cooperation is a descriptive of research
and the researchers used a survey questionnaire to gather
data. Descriptive design was utilized to achieve general and
specific objectives of this study.
This section describes an agent based computer
simulation model in which the agents are individuals with
strategies for interacting with others in groups under
different work group situations. The agent based model
simulates interactions between pairs of individuals as
different types of iterated games. The model uses two types
of evaluation and reward systems to form and change
groups over time: 1) Group Selection, which rewards the
best performing groups by selecting and retaining them; 2)
Individual Selection, which rewards the best performing
individuals in groups by selecting and retaining them. The
model uses a genetic algorithm, a computational technique
that mimics natural selection, to represent the two types of
evaluation and reward systems, as explained below. In real
groups individuals do not go through the type of
evolutionary process used in the simulations; instead this is
a mechanism to determine equilibrium behavior in different
circumstances. As such, this model is normative, rather than
descriptive of the mechanism by which group selection
occurs.
Sources of Data
The number of students in Department of Computer
and Electronics Engineering was obtained from the Cavite
State University.
The table below shows the obtained data.
Table 1. Number of participants
Courses No. of Students
BSCpE 87
BSECE 150
BSEE 63
Total 260
Data Gathering Procedure
The researchers used the survey questionnaire to gather
data from the respondents. The survey questionnaire was
designed according to the objectives of the study. The
researchers used the convenience sampling technique in
selecting the respondents. Survey questionnaires were
distributed to the selected respondents by the researchers.
After answering the survey questionnaire, the
questionnaires were collected, and the data were analyzed
and interpreted.
Research Instrument
The researchers used standard survey
questionnaire to gather data. It served as the primary
research instrument in the study. These were expected to
describe the demographics profile of the respondents, to
determine the impact of individual versus group reward on
work group performance and cooperation.
Data Analysis and Statistical Treatment
The study primarily used both descriptive
statistical treatment, frequency distribution and percentage
distribution. The descriptive statistical treatment that was
used includes the measures of central tendency, and the
standard deviation. Measures of central tendency such as
mean, median and mode were used to describe the gathered
data.
 A. Descriptive Statistics
Mean or Average
= (1)
Where:
= mean score
= summation of observations
= number of observations
Percentage
%= 100 (2)
Standard Deviation
( )2
= (1)
(3)
Where:
= each score
= the mean or average
= the number of values
= the sum across the values
VI. DATA ANALYSIS & DISCUSSIONS
This chapter discusses the results of the impact of
individual versus group rewards on work group
performance and cooperation about that have implications
for the design of group tasks and incentive schemes in firms
and, by extension, they are relevant also for the
development of industries, business networks and regions
because they are groups of individual firms and other
organizations.
First, the findings show the need to match incentive
schemes with group tasks and interconnected work flows
because this results in interdependent individuals in the
group. Identifying such group situations requires a careful
examination of the degree to which individual and group
performance is aligned. The degree of alignment reflects
different types of task interdependence, such as those
described by (Thompson,1967) and (Van de Ven et
al.,1976). For example, the Prisoners Dilemma game, in
which group selection performed best, is a form of pooled
task interdependence (Thompson, 1967), whilst a second
game in which individual selection performed best
resembles a form of serial task interdependence. Another
type of interdependence is reciprocal interdependence in
which the output of each worker is the input of the other.
The general form of the problem investigated here is task
interdependence (Van de Ven et al., 1976) where
interdependences exist between the tasks of all individuals
in a group.
To determine the conditions in which individual or group
selection is superior, a survey was conducted. We found a
bakery worker in which individuals have different
performances, reflecting different types of interaction
situations. In this model the absolute values of the
performances matter, the actual amount of payoff, rather
than simply their ordering, in determining strategy success.
The overall pattern of results is that group selection does
better than individual selection when individual and group
performance incentives are not aligned. To achieve the
optimal performance some individuals must sacrifice their
own performance for the good of the group. A Pareto
optimum occurs when those who sacrifice their own
VII. CONCLUSION
Based on the study, the following conclusions were
established:
First, the findings show the need to match incentive
schemes with group tasks and interconnected work flows
because this results in interdependent individuals in the
group. Identifying such group situations requires a careful
examination of the degree to which individual and group
performance is aligned. The degree of alignment reflects
different types of task interdependence. For example, the
Prisoners Dilemma game, in which group selection
performed best, is a form of pooled task interdependence,
while a second game in which individual selection
performed best resembles a form of serial task
interdependence. Another type of interdependence is
reciprocal interdependence in which the output of each
worker is the input of the other.
The overall pattern of results is that group selection does
better than individual selection when individual and group
performance incentives are not aligned. To achieve the
optimal performance some individuals must sacrifice their
own performance for the good of the group. A Pareto
optimum occurs when those who sacrifice their own
performance for the greater returns to the group can be
compensated. These self-sacrifices, hence play an important
role in groups in these situations but are quickly eliminated
from the population under individual selection. This is a
novel finding as the role and importance of such self-
sacrifices and the way they affect group performance has
not been identified and discussed before. This finding raises
issues as to how and when managers can identify and
nurture such behavior and the conditions in which they are
valuable.
The general form of the problem investigated here is task
interdependence where interdependences exist between the
tasks of all individuals in a group.
ACKNOWLEDGMENT
This study could not have been conducted and
completed without the genuine assistance and
immeasurable contribution of the people behind the
researchers. To them, this acknowledgment is due:
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Almighty God, for giving them wisdom, strength,

knowledge, understanding, and guidance to accomplish this
study;

Mr. Aivar M. Lopez, the researchers professor

who contributed ideas for the accomplishment of this study
and for his helpful suggestions, comments,
recommendations, guidance, assistance, supervision and
support throughout the conduct of the study;

The participants of the study, for this research

could not have been completed without your participation.

And for all the persons, organizations and

institutions who have been part of this piece, the success of
this study is truthfully and lovingly dedicated.

MARIA ROCEL F. DIZON

CHARLIE JAMES F. GOMEZ

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