Illinois Institute of Technology Stuart School of Business
Organizational incentive redesign profoundly impacts employee behavior, interpersonal dynamics, and the evolution of social networks. This study examines how incentive changes influence advice and friendship networks and their implications for organizational performance. Using agent-based modeling and a field study in a large steel company, we analyze the balance between brokerage and closure during the transition from seniority-based to performance-based incentives. Results highlight the interplay of trust, efficiency, and cohesion in shaping network dynamics and performance outcomes. Insights underscore the duality of relational strategies in managing organizational change, offering practical recommendations for preserving cohesion while enabling adaptability.
