“Group Formation and Performance: Field Experimental Evidence”

Roy Chen, National University of Singapore

Jie Gong, National University of Singapore

Teamwork is prevalent in workplaces. One key variable in team management is how the teams are formed. We experimentally examine how different methods of group formation affect group performance. In a large undergraduate class, we randomly assign students into three treatments, where (1) groups are assigned randomly; (2) groups are assigned to maximize skill complementarity; or (3) students choose their own groups. We find that when students choose their own groups, they form groups based on their social networks rather than on skill complementarity, and they perform better than the randomly assigned groups, and about as well as those with maximized skill complementarity. We also find some evidence that this performance difference is due to higher effort from students who choose their own groups.