What Is Group or Team Incentive Plan? What Are Their Pros and Cons?

1- What is group or team incentive plan? What are their pros and cons?

Team working these days is one of the important concepts to achieve the target in some job, most of the leaders pay attention more to this behavior ant they set their system to increase performance with organization behavior’s concept in company and know that they can’t get a good result individually.

To increase productivity and performance in terms of team working, the managers should focus on motivating team members to do the best way, the incentive plan for team and group try to encourage and persuade the members for getting more performance in different situations, in the other hand team or group incentive plan is a sort of paying for group’s members instead of exceeding the production standard.

There are three ways to calculate team incentive payment; one of these is setting a standard measure for group’s performance and calculates each member’s output, in this method members will gave incentive amount in three different bases, first all members will be earned by the highest producer, second all the members receive by the lowest producer and the last, all the member receive equal to the average pay earned by the group.

The second method is setting incentive plan by engineered production standard based on the output of the group as a whole, all member will be receive same amount based on pieces rate for group’s job (this method can be use piece rate or standard hour plan)

Finally the third method is to tie reward to targets based on some overall standard of group performance, such as total labor hours per final product.

The pros and cons of team incentive plan:

As I mention above much work today is organized around team and group, and we can’t achieve high performance just individual, team incentive plan reinforce participation soul in group and help to solve group’s problems and increase motivation between the worker and they can rely on each other in tough situation, team incentive also help to increase knowledge and skills during the work because each member try to trained others.

But sometimes team incentive plan is not suitable for each individual members and cause discourage hard workers when they compare themselves with others, maybe they don’t put their heart into the effort.

The solution is established some kind of team member’s commit to basing pay on individual performance not just team.

2- Why incentive plan fail and how can you make an effective incentive plan?

As we mentioned about incentive plan, the main purpose of this plan is increase productivity and performance with some monetary awards for individual or team work to motivate the employees in their job, because of incentive plan basis we have some problem during the process that cause it will be failed. In this part we will explain some reasons about the matters of failing incentive plan briefly.

Incentive plan is not a suitable concept to cover the lack of management, for instant there are some other important factors to achieve high performance like training, much time for vacation, working tools, complete insurance…

When the main worker’s purposes is high achieve the target to get incentive like higher product, they won’t pay attention to other factors like quality of product, using correct method to produce, or some times they will manipulate the schedule for completing tasks or even engage in patently unethical and illegal behavior. When the employee’s purpose is money or monetary incentive plan, the corporation soul will be decrease and each employee tries to achieve his target without any attention to team working or group goal.

Some times the incentive plan will be failed if the target or main purpose of company is farm from the employee’s abilities or it is unclear tasks. Incentive plan can be mediate against change and responsiveness.

To make an effective incentive plan we must pay attention to some matters:

Sometimes incentive plan can’t be effective because the employee doesn’t have any related to company’s purpose, for example when high quantity is target and the product would be produce in product line, employees can’t control the quantity of product.

The link between incentive plan and the company’s strategies is important to have effective incentive; we should decide how the incentive plan will contribute to implementing the firm’s strategy or objectives and we must make sure the incentive plan reward employees in the direct proportion to increase performance, but in this