Twenty-five
years ago, less than 20% of firms reported their workforce was engaged in one
team or more at any given time. Studies
today show that teamwork and collaboration consume about 80% of the typical
knowledge worker’s day.
While most
employees agree that team-based work is essential, only one-quarter prefer to work in teams versus alone. Before the pandemic, 68% say the teams
they work on were dysfunctional. As business becomes increasingly global and
cross-functional, silos are breaking down, connectivity is increasing, and
teamwork is seen as a key to organizational success.
When
planning reward initiatives, designs to optimize team incentives is not
immediately obvious or intuitive. The type of work that teams perform ranges
widely and can change over time. For incentives to do good rather than harm,
they should encourage the types of actions and behaviors appropriate to the
work of the team in question – the right incentives at the right time.
Things to
consider when planning your team incentives might include:
Whether the
work of the team is highly-interdependent (tight team) versus loosely dependent
(loose team).
Organizations emphasize individual
achievement when it comes to compensation, promotion, rewards and recognition
because they’re comparatively easier to measure and administer. Yet individual
rewards might contribute very little to team dynamics and performance, or even detract from them.
For a
variety of reasons, team-based incentives and rewards may prove more difficult
to administer (particularly in larger teams) because individuals come to their
teams with different goals and contribute varying levels of effort and/or value. Team rewards may even introduce issues where
individuals let their teammates do most of the work while sharing equally in
the reward. Adversely, individuals may have to give up personal recognition for
the benefit of team performance.
There is a growing
body of research that offers compelling evidence that where small teams engage in
highly-interdependent work, team-based rewards drive better performance and
outcomes than individual rewards. This is possibly driven by intergroup
competition.
In small,
highly-interdependent teams, hybrid rewards – which recognize team
achievements and the behaviors and productivity of individual team members –
can drive the best results of all.
As small teams become more
interdependent, better communications and greater cohesion will result in
better performance.
When a team
does not perform highly-interdependent work, greater communications and
cohesion might actually harm performance; largely because it is time-consuming
and unnecessary. Here, individual incentives are likely more effective.
So do the research.
Determine if you have tight teams (highly interdependent like a volleyball team
or restaurant crew) or a loose team; whether you have small teams (10 or less)
or large teams (more than 10 members.)
Small and
tight teams are more effective at driving performance than large and loose
teams. For large and loose teams
consider using Hybrid awards that reward the teams’ accomplishments as a whole
and rewards the behavior and performance of the individuals as well.
