Can Requiring Explanations Make Bonus Allocations Fairer?

Summary

This study examines how team members talk to managers about who contributed what to a team’s results when bonuses are at stake. The authors focus on “strategic bias” – cases where people push for a bigger share of the team bonus than can be justified by their actual effort or output. They test two design choices that are very common in practice: (1) whether communication to the manager is mandatory or voluntary, and (2) whether employees must explain their suggested bonus allocations.