Team based incentives harness peer pressure
WITH ATTRITION levels sky rocketing, businesses the world over are looking for new ways to motivate employees. For long, incentive plans have primarily focussed on individual contributions and milestones. The standard argument in favour of incentives and bonuses based on individual performance has always been that individual recognition and reward are closer, and more tangible. Hence, it is believed to better motivate high performance than say, team recognition or team based incentives.
Individual incentives do seem to work particularly well for employees whose jobs demand that they work independently with little interdependence or overlapping of responsibilities, and those who have definite, measurable outputs to substantiate their efforts. But with jobs progressively becoming more dependent on the cohesive collaborative efforts of teamwork, it does seem a tad out of place to restrict oneself to individual incentive plans.
Team based incentives do have a lot going for them, especially where there is a compelling business reason for teamwork and discerning and rewarding individual contributions is not feasible.
The biggest advantage of team-based incentives is that peer pressure is harnessed. Team members will push even an under-performer to his optimal performance in the light of team interests. Nevertheless, it has the tendency to gloss over individual contributions. And when individual contributions are ignored, high performers tend to leave.
Another problem is of slackers and `free riders' sailing through under the cover of teamwork. Consequently, not only are non-performers undeservingly rewarded, but high performers may get demotivated. Nonetheless, it is a trade off.
The correct solution, it appears, lies somewhere in between. A mix of both individual and team based incentives seems to work very well for a broad range of businesses ranging from manufacturing to IT.
It takes the best of both tactics while negating the drawbacks of one plan over the other.
The right ratio is though for the organisations to decide. Where individual contribution is definable in terms of output, for example, you might offer two-thirds of the incentives based on individual results, while retaining one-third for overall team performance. Where team contribution as a whole is critical, team based incentives are given greater weightage.
It is natural for individuals wanting to be recognised for their contributions. At the same time if you fail to recognise the positive paybacks of joint endeavour and group performance, you would inadvertently encourage individualistic competition instead of collaborative effort.
A good rule of the thumb therefore is to use team incentives to reward and promote outputs you want people to accomplish as a team, and pay individual incentives for things you want individuals to accomplish. For example, you can consider individual incentives for people who walk that extra mile in completing a project, but a team incentive for a project completed ahead of schedule.
Cash or kind, individual or group, incentives and reward strategies play a significant role in enhancing employee motivation.
A fair and equitable incentive programme when implemented appropriately can go a long way in inspiring employees to achieve targets, involve in organisational objectives, and improve overall productivity.
BINDU SRIDHAR
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