Who Responds to Team Incentives? Evidence from a Field Experiment in a Retail Bank

Abstract

Understanding the heterogeneous effects of team-based incentives is crucial for designing effective compensation schemes, yet empirical evidence remains limited. We study this issue using a randomized controlled field experiment in a German retail bank with 77 branches and 320 employees. In treated branches, employees received a bonus tied to collective sales performance. The team incentive increases the average transaction amount by about 3.8 percent relative to the control group. This average effect conceals substantial heterogeneity. The positive impact is significantly stronger in shifts with more employees on duty, consistent with team incentives fostering cooperation and effort complementarities. Treatment effects also vary by employee ability: performance gains are driven primarily by employees who were not previously top performers, while high-performing employees exhibit no significant response. Our findings provide causal evidence on how team incentives operate and offer guidance for incentive design in organizations.