Chapter 15: Balancing Group And Individual Rewards: Rewarding Individual Contributions to the Team

Source: Heneman, R.L. and von Hippel, C. Compensation and Benefits Review, 25 (4), pp. 63-68., copyright © 1995 by Sage Publications, Inc. Reprinted by permission of Sage Publications, Inc. Through instituting team-based merit pay, traditional organizations can move closer to the new pay, and innovative organizations can foster the development of skilled team players.

Workplace redesign continues to shift emphasis away from individual performance, placing greater importance on the role of teams and work groups. To support this new emphasis, many organizations have designed group-based reward systems, such as team-based pay, gainsharing, and goal sharing, to reward employees for a group’s success in contributing to the organization’s strategy. While various studies have documented the effectiveness of these plans, issues still remain on how best to use them. One such issue centers on whether theorganization’s pay systems support alignment between individual behaviors and groupgoals or frustrate group cohesiveness.