Several people have commented that they feel that individual incentive
programs and ranking of employees can destroy intrinsic motivation and
teamwork. Others have added their views that Reward Systems alone will
not create a culture of "togetherness". I agree with both of these views.
I do, however, have some ambivalence about the effectiveness of Team
Incentive plans such as Gainsharing. Alfie Kohn and Peter Scholtes argue
that Team Reward programs are no better than individual incentive programs
in that they send the message that we should try to attain these goals so
that we can get bonuses (extrinsic motivation) and thereby destroy the
intrinsic joy of doing a good job. Scholtes will also emphasize that
these programs are blaming or crediting employees for the results rather
than focusing on the system.
In my experience I have found that the bonus element of the Team Reward
system gets employees' attention. Once they understand that improvements
in financial results will be shared with them instead of going only to
executives and shareholders, they become more interested in developing
ways to improve the system and meet the numbers.
I have come to believe that individual incentive programs destroy
instrinsic motivation but I'm still unsure about team incentives. Am I
stuck in an old mental model? I have included a bibliography on Team
Rewards for anyone interested.
1. Belcher, John G., Jr. Gainsharing, Gulf Publishing Company, Houston,
An outstanding reference to guide you through the complex process of
designing a successful gainsharing program.
2. Johnson, Sam T., "Work Teams: What's Ahead in Work Design and Rewards
Management", Compensation and Benefits Review, March - April, 1993
The author suggests that small-group incentives may be the best rewards
system to use with a work-teams organizational design.
3. Kanin-Lovers, Jill and Marsha Cameron, "Team-based Reward Systems",
Journal of Compensation and Benefits, January - February 1993.
Compares traditional pay systems with alternative approaches, focusing on
the benefits of team-based reward systems.
4. Kohn, Alfie, Punished by Rewards, Houghton Mifflin, Boston, 1993.
Kohn accuses employers of treating their employees as lab rats by
rewarding them with a treat every time they ring the bell. Drawing from
hundreds of studies, Kohn demonstrates that people actually do inferior
work when they are enticed with money, awards and other incentives. This
book should be required reading for all compensation specialists. Kohn
makes a very strong case for abandoning all forms of reward programs.
5. Lawler, Edward E. and Cohen, Susan G., "Designing Pay Systems for
Teams", ACA Journal, Autumn, 1992, Volume 1, Number 1.
The authors first define three types of team: the parallel team, the
project team and the work team and then present a total pay strategy for
each type of team. A valuable resource for anyone considering team
6. McAdams, Jerry L., Alternative Reward Strategies: Balancing Line of
Sight and Cost Justification - the Emerging Challenge, American
Compensation Association, Vol. 2, No. 4, April 1991.
Addresses key plan design issues related to group variable pay programs.
7. McAdams, Jerry L. and Elizabeth J. Hawk, Capitalizing on Human Assets,
American Compensation Association, 1992.
An important study of 2200 group variable pay plans designed to improve
8. O'Neill, Darlene and David Lough, "Team Incentives and TQM: Building
Organizational Excellence at National Semiconductor", ACA Journal, Spring
1994, Volume 3, Number 1.
This article describes National Semiconductor's efforts to rely on team
incentives to reinforce total quality principles and to work toward
greater organizational excellence. They have designed and implemented
pilot team incentive programs for business units representing about
one-third of their work force.
9. Sisco, Rebecca, "Put Your Money Where Your Teams Are", Training, July,
An excellent article showing the problems of traditional pay systems in
team environments and giving several illustrations of successful team
"Roxanne S. Abbas" <75263.3305@CompuServe.COM>
Learning-org -- An Internet Dialog on Learning Organizations For info: <firstname.lastname@example.org> -or- <http://world.std.com/~lo/>