Team pay for novice, intermediate, and advanced teams

There is no one best type of team pay plan. In order for team pay plans to be effective, they must be carefully matched to the development stage of the team. To further develop this argument, a three stage model of team pay is advanced (novice, intermediate, and advanced), and each stage is defined by several dimensions (strategic focus, individualism/collectivism, team composition, plan owner/developer, and autonomy). Furthermore, the dimensions used to differentiate between various types of team pay plans are articulated (measures, measurement levels, evaluators, and pay form). The general hypothesis advanced is that team effectiveness is better explained by the interaction of team development stage and type of pay plan, than by the main effect for type of team pay plan alone. A case study of a Fortune 500 company is used to illustrate the importance of different types of team pay at different stages of team development. Implications for theory, research, and practice are discussed.