The Effect of Input-Oriented Performance Reporting on Cross-Functional Team Members’ Collaborative Effort

Firms often rely on cross-functional teams (hereafter, CFTs) in which employees with diverse expertise work together to achieve a common goal. CFTs, however, often fall short of producing expected results due to a well-documented “silo mentality” mindset, which hinders collaboration among employees from different departments. Owing to the collaboration challenges faced by CFTs, we experimentally investigate how CFT members’ reporting of input-oriented performance measures affects their allocation of effort toward collaborative (as opposed to individualistic) cross-functional tasks. We predict and find that input-oriented reporting decreases CFT members’ effort toward collaborative cross-functional team tasks. We also find that the negative effect of input-oriented reporting on collaborative effort appears robust to CFT members’ relative alignment with the CFT’s purpose. Results of our study suggest that firms may need to consider the potential cost of reduced collaborative behavior when weighing the net benefit of requiring CFT members to report more input-oriented information.