Organizations are recognizing
that some individual incentive systems can do more harm than good, particularly
in those situations where team-work and coordination among workers are becoming
more important. A pay system that encourages competitive behaviour may find
that the competitor is often a worker’s colleague, not an external business
competitor. When a situation such as too much competition begins to disrupt
operations or when a new team-building programme such as Total-Quality
Management (TQM) is implemented, team-based incentives need to be considered.
Team or group incentive plans, pay incentives to the team-based on the team’s
performance
(Hamblin, 2000). One way to do this is to set work
standards for each team member and then
calculate
each member’s output.
Members
are then paid based on one of three formulas:
1.
All members receive the pay earned by the highest producer
2.
All members receive the pay earned by the lowest
producer, or
3.
All members receive the pay equal to the average pay
earned by the group.
Accordingly, team-based pay plans
should emphasize cooperation between and within teams, compensate employees for
additional responsibility they often must assume in their roles as for the team
(Kanin-Lovers and Cameron 1993).
Team-based organizational
structures encourage team members to learn new skills and assume broader
responsibility than is expected of them under traditional pay structure that
are geared toward individuals. Usually, a pay plan for teams emphasizes
cooperation, rewarding team members for the traditional responsibilities they
must take on and for the skills and knowledge they must acquire.
In agreement with Hamblin (2000)
Martocchio (1998) states that: group
incentives programmes rewards employee for their collective performance rather
than each employee’s individual performance. Group Incentive programmes are
most effective when all group members have some impact on achieving the goal,
even though individual contribution might not be equal.
Armstrong and Ryden (1996:25)
posited that:
Team pay is usually paid in the form of a
bonus that is shared amongst team members
in proportion to their base rate of pay
(much less frequently, it is shared
equally).
In a team-based pay, performance
may be measured in terms of outputs and /or the achievement of service delivery
standards. The quality of the output and the opinion of the customers about service
levels are also often taken into consideration. While the more
reward team structure certainly
is promising one, there are many loose ends to its success, one major flaw
being how to reward them; (members and teamwork). Sequel to the above Gerber (1995:180)
puts things into context when he noted:
It’s a struggle trying to persuade many
employees
that
working cooperatively with others is in their
best interest. It’s an epic battle teaching
them how
to
collaborate, especially when it means they
must resist a lifetime of seeking personal
glory.
And it’s truly exasperating trying to get
non-teamed
parts of the organization, as well as
customers and
suppliers to work
harmoniously with the team.
Unfortunately, there’s another
problem waiting just around the corner, it is the issue of compensation. To
wit: Now that people are working closely together to produce jointly, how do
you pay them in a way that encourages collaboration and spur the team to
produce its utmost, but does not ignore the individual’s innate desire for
personal recognition.
The biggest single barrier to
effective administration of team-based pay is cultural, especially in a higher
individualistic culture such as Nigeria. (Trompenaars 1994). Team-based pay is
a direct assault on the cultural tradition of putting the individual above the
group
Another culturally rooted problem
of team-based pay system is a general lack of team work skills. Members of
high-performance teams are skilled communicators, conflict handlers, and negotiators:
they are flexible, adoptable and open to change. Employees accustomed to
being paid for personal
achievements tend to resent having their pay dependent upon others’ performance
and problems. The combination of poor interpersonal skills and an individualistic
work ethic can breed conflict and excessive peer pressure, as Levi Strauss
& Co. learned at its El Paso, Texas, Pants factory. The El Paso plant was
one of 27 sewing operations in the United State, where Levi’s switched them
from traditional assembly lines to 20-to-30-worker multitask teams responsible
for complete batches of pants, from start to finish. Eighteen months into the
new team structure, orders were being processed in only three days, as opposed
to a seven –day turnaround under the old system.
But Levi got more than improved
productivity in Mitchel, 1994 and Shaw et:al; 2001:104:
Under the team system, a worker’s incentive
pay is
tied to a team performance. A poor
performer
or absent worker affects everybody’s
pay
cheque. When someone is perceived to be
faking
sick days or lollygagging on a sewing
machine,
tempers flare, says (team member Salvador)
Salas: “Somebody’s fooling around, and
somebody
else calls attention to that, and the first
guy will
just flip him off”. Supervisor Gracie Cortez
says that
“it gets tough out there”, She find herself
intervening
to prevent “big fights” says a plant manager
Edward
Alvarez. In line with the above: ‘peer
pressure can be
vicious and brutal’