Some degree of conflict within groups is often unavoidable, and can in fact have positive outcomes, but it can also lead to debilitating effects on group performance. A US study examined the effects of conflict on the effort levels of individuals and how incentives can overcome the negative effects of conflict. The researchers looked specifically at faultline conflict, which is conflict induced from dividing lines between group members. Results found that team members reduce their effort when they perceive faultline related conflict, while incentives moderated this effect of conflict on effort. Under these circumstances, team incentives were found to have a greater effect on performance than individual incentives.
Key Topics: Conflict; Incentives; Group decision making; Effort; Faultlines
Title of Reviewed Article: Using Incentives to Overcome the Negative Effects of Faultline Conflict on Individual Effort
Researchers: Yu Tian (University of Central Florida), Brad M. Tuttle (University of South Carolina), and Yin Xu (Old Dominion University).
Publication: Behavioral Research In Accounting, 2016, Vol. 28 No.1, pp. 67–81.
Setting the Scene
Within the research on group performance and group decision making, various researchers have examined the role of group member heterogeneity on group outcomes and have developed the concept of faultlines. Faultlines can be defined as hypothetical dividing lines which can divide a group based on the attributes of members, such as gender, race, or age (Lau & Murnighan, 1998). Strong faultlines are typically observed when there are significant similarities within subgroups and limited similarities between subgroups, which can emerge as group members develop within-subgroup bonds, and distance with other subgroups (Shaw, 2004; Thatcher & Patel 2011). These faultlines can then result in group conflict, and have a negative influence on group outcomes (e.g. Homan et al., 2008).
While prior research on faultlines has focused on demographic attributes, such as gender, race and education (e.g. Bezrukova et al. 2009; Thatcher & Patel 2011), this study examined faultlines based on management responsibility, given its importance on many organizational tasks. The researchers contend that conflict triggered by management responsibility is likely to generate strong disagreement and conflict.
Task conflict has been shown to have potentially positive impacts on performance, with the ability to improve group functions such as problem solving (Simons & Peterson 2000) and group productivity (Jehn, 1997). In contrast to this, the researchers argue that when conflict is faultline related then negative, rather than positive, group outcomes are more likely, although research suggests that incentives, which have been shown to influence individual and group behaviour (e.g. Bonner & Sprinkle 2002), may temper these negative effects.
Based on this, the researchers outlined three primary hypotheses.
Hypothesis 1 – “The presence of an activated faultline results in higher levels of perceived conflict in groups than when there is no faultline.”
Hypothesis 2 – “Higher levels of perceived conflict associated with an activated faultline will result in lower levels of effort exerted by group members.”
Hypothesis 3 – “Incentives moderate the effect of faultline-induced conflict on effort, such that team incentives increase effort more than individual incentives when the conflict is high, rather than low.”
How the research was conducted
The study hypotheses were tested using an experimental design and the study was conducted with 64 M.B.A. students from a large US university. The average participant work experience was 4.5 years.
The study was conducted in two phases, the first of which manipulated faultlines to facilitate the generating of conflict, and the second phase examined individual reaction to that conflict when monetary incentives were offered. The conditions under which the hypotheses were tested included faultline presence (yes versus no) and monetary incentive type (team versus individual).
Participants were randomly assigned into teams and instructed to assume the role of managers in an experimental scenario which involved having to discontinue company products.
Key Research Findings
Results found that levels of perceived conflict in teams were higher when a faultline was present compared to when there was no faultline, thus supporting Hypothesis 1.
Hypothesis 2 was also supported, as perceived conflict was found to negatively affect individual effort levels and that this perceived conflict serves to mediate between faultine and effort.
Difference in effort levels depending on the type of incentive (team or individual) were not observed when perceived conflict was low. However, when perceived conflict was high team incentives had a greater positive effect on effort than individual incentives. These findings support Hypothesis 3.
The results show that effort levels are significantly affected by faultline related conflict. An important related finding is the role of monetary incentives in reducing the negative effects of such faultlines on individual effort levels. Notably, team incentives had a greater effect on increasing performance under these faultline conditions which, while supporting Hypothesis 3, is contrary to the idea that team incentives might increase social loafing behaviour, and that individuals performs better under individual compensation conditions.
Organizational and Reward Implications
This study raises some interesting questions for HR and reward practitioners. The prevalence of faultlines demonstrated by this study and their impact on effort, is something that is important for companies to understand, given the negative implications of such conflict, and this study provides some guidance on ways to potentially mitigate the negative effects of faultline conflict.
The findings in relation to team reward should be of particular interest to companies where team faultlines are observable, as the results indicate that team incentives can be a more effective method of reducing the negative effects of such fractures in groups and increasing the performance levels of individual team members, than individual incentives.
This study provides valuable insight into the negative impact that group conflict can have on group members, and how incentives can be used as a tool to reduce these issues. It is important for future research to explore these issues on a broader scale and in field conditions with companies, in order to further establish the generalizability of the results.
Source Article: Tian, Y., Tuttle, B. M., & Xu, Y. (2016). Using Incentives to Overcome the Negative Effects of Faultline Conflict on Individual Effort. Behavioral Research in Accounting, 28(1), 67-81.
Published by: American Accounting Association
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