Behavioral Economics for Leaders

CHAPTER 22Empowering Employees Saves Lives: The Co‐Determination Bonus

Team collaboration is important in all companies. Unfortunately, teamwork may easily and inadvertently entail freeloading conduct. Good organizations can prevent that, especially if the team members have a say on it.

It's 3 a.m. in a major American city. The emergency room at the general hospital is extremely busy. A receptionist records the symptoms and type of pain of a newly admitted patient and then quickly assigns the patient to a team of two emergency room doctors. In earlier years, the receptionist had to decide which of the two doctors should take care of the man. Today, the employee no longer needs to make this decision. The assignment works differently now. The patient is brought to the unit of the emergency room medical team—which is just around the corner—and then one of the two doctors decides who will treat the emergency patient. As it turned out, this new way of assigning is a huge benefit to patients. They don't have to wait so long for treatment without having to accept reduced quality in medical care, a study by David Chan of Stanford University has shown. Why is this, and why does the organization play a crucial role for productivity in this example?

The processes in a company may foster cooperation or encourage freeloading behavior causing the team's performance to suffer owing to a few members who are not committed to joint success. The opening example of the emergency room in a major ...