step 1: What potential problems do you see with Wooga's no-bonus policy?

step 2: How can your knowledge of group norms help you explain why Wooga's no-bonus practices foster effective groups?

step 3: Describe what you would recommend, above and beyond what they already do, to help overcome the challenges associated with Wooga's no-bonus policy.

Whil Wooga, a German social gaming company, doesn't pay performance bonuses. This is hard to believe given the common practice among its competitors to provide generous bonuses For instance, rival Zynga pays top performers with lavish gifts, which can include $100,000 in stock. Its hard-driving culture pro- motes competition within, tracks in dividual performance, and demotes or fires those who don't keep pace. These practices seem to work. Zynga has produced such online hits as Mafia Wars, Farmville, and Zynga Poker. Wooga's games are almost as unlikely to allow a user to be di- year earlier. The practice also has well known, including Diamond rected to a Wooga game from a attracted private Investors (the com- Dash, Bubble Island, Pearl's Peril, competing team. Performance pany is not yet public). One investor Monster World, and Jelly Splash. bonuses could get in the way of raved, "I fell in love with this philos- Wooga's overall success. ophy. (Begemann) basically does So Why Doesn't Wooga Pay Besides, Begemann notes, in not believe that running competitive Bonuses? If bonuses work for Germany cash bonuses are taxed teams is the best way to build the Zynga, why not for Wooga? Jens at nearly 50 percent. "Sometimes, company." In contrast to just having Begemann, founder and CEO, says: people don't even realize they people work harder, the investor *I don't believe in them.... If peo- received a bonus." Part of this no- said, "It's very important people ple are not motivated, you may bonus practice can be attributed to work smarter." need bonuses to make sure they the European approach to start-ups. work. But I don't think that's the In contrast to the winner-take-all ap- Market Share Update Ranking right Incentive." Bonuses work proach in US companies, European changes fast in this market. Based against Wooga's culture of open- companies tend not to single out on daily active users, Wooga- ness and collaboration. The com- individuals and differentiate their which by the end of 2012 was Zyn- pany creates games for social compensation so dramatically. ga's closest rival-had slipped to platforms (e.g., Facebook) with Note, however, that Wooga does third place as King, the makers of teams of developers. Sharing all use a financial incentive-owner- Candy Crush Saga and Pet Rescue knowledge is essential-within and ship. Wooga provides employees Saga, soared to number one. In the between teams as well as between with Initial shares in the company to first half of 2013 Zynga claimed 52 management and employees. Be- give workers a stake in the compa- million users and King 66 million.21 gemann doesn't want teams com- ny's overall success. paring and competing with each SOURCE: Adapted from P.Glader, "Wooga, other for ideas, talent, or users (a It seems to Work and Venture A Case Study in No Cash Bonus Culture, Fast Company, February 21, 2012, critical performance measurement Capital Agrees in 2011 alone, users http://www.fastcompany.com/1816541 in gaming). He reasons that if a grew by 185 percent to 40 million wooga-case-study-no-cash-bonus-culture, team competes for users, it may be monthly users, up from 14 million a accessed April 28, 2013