Human resource management practice I also available by michael armstrong

Team pay

Team pay links payments to members of a formally 

established team to the performance of that team. 

The rewards are shared among the members of the 

team in accordance with a published formula, or on 

an ad hoc basis in the case of exceptional achieve-

ments. Rewards for individuals may also be influenced 

by assessments of their contribution to team results.

Team  pay  can  enhance  cooperative  behaviour, 

encourage  flexible  working  and  multiskilling  and 

clarify team goals. It can also persuade less effective 

performers to improve in order to meet team stand-

ards and help to develop self-managed teams. But:

 

●

The effectiveness of team pay depends on  

the existence of well-defined and mature 

teams and they may be difficult to identify. 

Even if they can be, do they need to be 

motivated by a purely financial reward?

 

●

Team pay may seem unfair to individuals 

who could feel that their own efforts are 

unrewarded.

 

●

Pressure to conform, which is accentuated  

by team pay, could result in the team 

maintaining its output at lowest common 

denominator levels – sufficient to gain what 

is thought collectively to be a reasonable 

reward but no more.

 

●

It can be difficult to develop performance 

measures and methods of rating team 

performance that are seen to be fair –  

team pay formulae may well be based on 

arbitrary assumptions about the correct 

relationship between effort and reward.

 

●

There may be pressure from employees  

to migrate from poorly performing teams  

to highly performing teams. If allowed, this 

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