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Team Spirit and Peer Pressure Motivate Employees More than Money

A new study shows that in cohesive and cooperative work teams, employees may be more motivated by team spirit and the desire to help their coworkers than by money.

For some workers, the best motivation comes not in the form of a fatter paycheck but in maintaining a sense of closeness and connection with their colleagues, according to new research.

Researchers at the University of Iowa found that self-managing teams demonstrated increased performance when those teams were cohesive and cooperative.

“Peer pressure is a strong motivating force, and workers’ willingness to please people who mean something to them is often a stronger motivating force than financial rewards,” said Greg Stewart, Henry B. Tippie Research Professor of Management and Organizations in the UI Tippie College of Business.

He added that pleasing other people is a powerful motivating factor. Workers don’t want to disappoint their team members, so appealing to team spirit is more effective even than money as a motivating tool.

Working Together

Stewart and other researchers studied 587 workers in 45 self-managing teams at three factories in Iowa. In each of the 45 teams, teammates were allowed varying degrees of input into how much their colleagues should be compensated for their work. The workers were asked about their level of attraction to the team and their compensation, and supervisors were asked about the productivity of both individuals and teams.

“In high functioning teams, the group takes over most of the management function themselves,” said Stephen Courtright, assistant professor at Texas A&M University who recently received his doctoral degree from UI and was a member of the research group. “They work with each other, they encourage and support each other and they coordinate with outside teams. They collectively perform the role of a good manager.”

He explained it makes sense that the team would make sound compensation decisions because they’re the ones who work with their team members, after all, and are in the best position to observe their performance.

People Pleasers

“We all have a social need to be accepted, to identify with a group and be a part of it,” said Stewart. “So much so that peer pressure from team members is more effective than money in prompting strong performances from workers.”

However, this works only when team members get along. When they don’t, then self-managed teams perform worse than cohesive teams. When team members don’t much care for each other, appealing to team spirit as a motivating factor won’t work because there is no team spirit to appeal to, so money becomes the primary motivating factor to improve productivity.

“Teams perform better when there is social pressure from peers to perform well than when peers wave a carrot and stick,” Courtright says. “However, the carrot and stick method works pretty well when team members just can't get along.”

The study, “Peer-Based Control in Self-Managing Teams,” was co-authored with Murray Barrick of Texas A&M University was published recently in the Journal of Applied Psychology.

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