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Team-based rewards 
may be used to encourage co-operation and mutual accountability. 
Organisations may try to encourage effective team performance by designing reward systems that 
recognise team, rather than individual, success. Indeed, 
individual performance rewards
may act 
against
 
team co-operation and performance. 
(a) 
They emphasise individual rather than team performance. 
(b) 
They encourage team leaders to think of team members only as individuals, rather than relating 
to them as a team. 
For 
team rewards
to be effective, the team must have certain characteristics. 

Distinct roles, targets and performance measures (so the team knows what it has to do to earn 
the reward) 

Significant autonomy and thus influence over performance (so the team perceives that extra effort 
will be rewarded) 

Maturity and stability

Co-operation 

Interdependence of team members (so that the team manages member contribution, everyone 
'pulls their weight', no one feels they could earn higher rewards on their own) 
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PART D: LEADING AND MANAGING INDIVIDUALS AND TEAMS 
 
372
 
Reward schemes 
which focus on team (or organisation) performance include: 
(a) 
Profit sharing
schemes, based on the distribution of a pool of cash related to profit 
(b) 
Gain sharing
schemes, using a formula related to a suitable performance indicator, such as 
added value. Improvements in the performance indicator must be perceived to be within the 
employees' control, otherwise there will be no incentive to perform. 
(c)
 
Employee share option 
schemes, giving staff the right to acquire shares in the employing 
company at an attractive price 
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CHAPTER 14
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INDIVIDUALS, GROUPS AND TEAMS