We study, experimentally, how two alternative incentive mechanisms affect team performance, and how a team chooses … between alternative mechanisms. We study a group incentive mechanism, where team output is shared equally among team members …, and a hierarchical mechanism team output is allocated by a team leader. Our experiment examines these mechanisms in both …

suggests that providing managers with discretion over team bonus allocation can improve team performance relative to equal team … benefits are highest. Our results help explain why firms often grant managers only partial or no discretion over team members … motivating team performance. Teams are particularly useful when employees' tasks are interdependent, i.e., when the degree to …

, we find that, regardless of task interdependence, managers use their discretion over compensation to differentiate team … systems in a team environment, because we identify conditions under which the effectiveness of granting managers discretion …This study investigates whether the effect of managerial discretion over team members' compensation on team performance …