The relative sizes of individual and group-based performance compensation depend on the extent of interdependence of contributions. If superior performance comes from the sum of independent efforts, then individual performance should be rewarded (for example, in a sales group). If group cooperation and integration are critical, then group-based incentives should get more weight (for example, in a new-product development team). Note that there may be several levels of group-based incentives: team, unit, and company as a whole.
