It would seem that allowing groups autonomously to form and break up as necessary would be nearly ideal: People would choose to be with their friends, and this would promote the efficacy of social sanctions, increase the likelihood of a cooperatively collusive equilibrium being reached, and encourage the group\’s welfare by individual members. But things are not so simple, for several reasons.

To the extent that group members are socially dissimilar from others in the organization, or even just socially dissimilar from their \”bosses,\” a dysfunctional us-them atmosphere may be created. This can lead in turn to a within-group equilibrium that works against the interests of the firm-for instance, fostering norms of restricted output; lack of cooperation among groups; concealment of information; unwillingness to discipline group members who underperform; and norms that tolerate mild corruption (petty theft, for example).

Other social and technological concerns must be weighed as well. In particular, to the extent that within-group diversity on ethnic, racial, gender, or other grounds is socially desirable, self-forming groups may pose a problem. On grounds of skill mix, talents, attitudes, and experiences, the employer may wish to form groups that combine workers of different ages, educational backgrounds, and family statuses, among other factors. Self-forming groups are unlikely to fulfill this sort of wish.

Besides forming on the basis of friendships, groups will naturally form on the basis of abilities, at least insofar as compensation is tied to group performance. Outstanding performers will want to be with outstanding performers and after they form their own groups, the very good (but not outstanding) performers will band together, followed by the good, then the mediocre, and finally the poor performers. Whether such a pattern of \”within-group homogeneity, between-group heterogeneity\” in terms of abilities is good for the organization is complex and depends on the firm\’s technology. In two extreme cases, however, the answer on technological grounds is straightforward.

Consider a case in which it takes a team of high performers to get outstanding group performance, but groups as a whole are \”stars.\” In this case, it is desirable to have teams that are internally homogeneous but heterogeneous in ability across teams (i.e., within-group homogeneity and between-group heterogeneity). This is because homogeneous groups composed of low-achievers won\’t hurt much, while homogenous groups of high-achievers will give spectacular results for the organization. Think, for example, of research teams that require one member from each of several specialties – the team that gets all the stars is likely to produce something outstanding, while the teams that are filled with less brilliant performers are unlikely to get anywhere and, at the same time, are unlikely to cause any damage as they spin their wheels.

in opposition, think about a setting in which teams are guardians, and individual members of teams are stars – that is, a poorly performing group is a disaster for the firm, but one solid member of the group can substantially make up for all her teammates. Here, within – group homogeneity combined with between – group heterogeneity could be disastrous, because the team with all the low performers could wreak tremendous havoc. By maintaining homogeneity across groups-rationing the individual stars among the groups to pull all the groups up-the organization is likely to experience no worse than mediocre performance from all the groups.

These are the two easy cases for the question of within-versus between-group homogeneity. Answers are, however, quite unclear for the other cases: where members of the group are stars (respectively, guardians) in their effects on the group, and groups are stars (respectively, guardians) in their effects on the organization.

Saying that members of the group should be rewarded according to group performance leaves unanswered at least one key question: Should rewards be given to members of the group according to some fixed formula (such as equal division, or divide group compensation in proportion to base pay)? Or is the group given an overall reward – a bonus, say-which must be apportioned to members of the group through a consensus process? In some organizations, supervisors are called upon to apportion bonus pools according to their subjective sense of the value of the different workers in the group. Occasionally, the group members themselves must decide how to divide the total award. In theory, having the group divide the reward is very attractive, if one can trust the group to solve the division problem efficiently and equitably, because this increases the power of the group over the individual, heightening the power of peer pressure. But the phrase if one can trust the group to solve the division problem efficiently and equitably hides a multitude of potential problems. Politicking, back-scratching, and logrolling are all natural in such settings and can be quite destructive of group cohesion. And of course management must also balance the potential benefits of involving group members in reward allocations against the risk of losing a valued individual team member who feels unfairly rewarded by his or her colleagues. We have no particular insights to offer on these questions, except one that is obvious: If rewards are going to be divided \”locally,\” management should keep an eye on the process.

http://www.arturvictoria.info/
http://sites.google.com/site/cliptheschoolbeginning/
http://sites.google.com/site/arturvictoriasite
http://adesg-europa.blogspot.com/

http://www.arturvictoria.info/
http://sites.google.com/site/cliptheschoolbeginning/
http://sites.google.com/site/arturvictoriasite
http://adesg-europa.blogspot.com/

Author Bio: http://www.arturvictoria.info/
http://sites.google.com/site/cliptheschoolbeginning/
http://sites.google.com/site/arturvictoriasite
http://adesg-europa.blogspot.com/

Category: Business Management
Keywords: Organization, behavior, human, information, career, responsible, planning, human resources, leader,