*Dit artikel is gebaseerd op een opdracht die een van onze pollinators heeft uitgevoerd en is in het Engels geschreven. Vanwege de interessante inhoud is ervoor gekozen om het bericht ook hier te publiceren.
Prisoner’s dilemma in rewarding performance
In a lot of organizations there is an incentive for a job well done (bonus). In some occasions the bonus is based on a team effort, in other occasions it is based on a personal effort. What happens if you are working in a team and need each other, yet the pay is based on individual performance? I helped a team in analyzing performance and facilitated the team in finding the optimal solution for the group. In this blog I will highlight one specific problem that I found during the analysis.
It could occur that two completely ‘rational’ and professional individuals might not cooperate in a team, even when it is in their best interest to do so. In economical and psychological terms this is called a prisoner’s dilemma. You could go for your own personal benefits and not go for the optimal team result so your bonus will be higher, but the team result will be lower. You could also go for the team effort, meaning that you will not maximize your own result and have the risk that another coworker could for his or hers personal benefit, meaning that your result will be even lower. To summarize this dilemma it can be generalized in the following scheme:
The red line shows that over time as more games are played, there are actually only two outcomes. You either have screwed each other over so much that there is no trust and performance is poor, or a bond of trust is formed leading to the optimal team effort. We recommend to look for long term solutions, therefore not choosing for yourself, but for the team. This is mainly for 2 reasons.
1. As a team based on trust you can act together to team members who are not working for the team and enforce team play.
2. Over the long term as the team performance is higher, the net profit will also be higher, meaning that there is more room for increasing your personal wage for longer terms instead of a single bonus.
Choosing for the team can be hard due to personal circumstances, but also when there is limited trust in the team. Therefore it is important to work on individual trust in a team, but also on trust on a team level itself. The same counts for joint ventures and other collaborations that have similar principles. Trust can be diminished easy, but is hard to build up. Keep that in mind the next time you have to make a decision between yourself and the team.