Leader Effects in Competition Among Teams : Evidence from a Field Intervention

This paper investigates the factors that make teams successful in competitive environments. In collaboration with a medium-sized Latin-American bank, we designed a series of contests among the branches of the bank, in which we varied the prize structure of the tournaments (in some tournaments, the prizes were shared among all branch employees, while in other tournaments there was an additional prize for the branch manager). We also surveyed the branch managers and employees prior to our intervention to measure the team characteristics and the leadership style of the managers, and we evaluate the pictures that teams post on the intranet to measure their creativity and desire to have fun. We find that more creative and less jovial teams, as well as teams with a manager that encourages teamwork, perform better in the tournament. However, the effects are reversed when the tournament awards a prize to the branch manager. The results are consistent with leadership prizes encouraging managers to monitor employees more closely, but at the same time, hampering their efforts to build team spirit