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Potential problems

Subjectivity of awards for less measurable criteria (eg 'teamwork') 

Encouraging short-term focus and target-hitting (rather than improvements) 

Divisive/against teamworking (if awards are individual) 

Difficulties gaining union acceptance (if perceived to erode basic pay) 
BPP Tutor Toolkit Copy

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CHAPTER 15
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MOTIVATING INDIVIDUALS AND GROUPS 
 
391 
QUESTION 
PRP
 
Why might PRP fail to motivate? 
ANSWER 
(a) 
The rewards from PRP are often too small to motivate effectively. Anyhow, some employees may 
not expect to receive the rewards and hence will not put in the extra effort. 
(b) 
It is often unfair, especially in jobs where success is determined by uncontrollable factors. 
(c) 
If people are rewarded individually, they may be less willing to work as a team.
(d) 
People may concentrate on short-term performance indicators rather than on longer-term goals such 
as innovation or quality. In other words, people put all their energy into hitting the target rather than 
doing their job better. 
(e) 
PRP schemes have to be well designed to ensure performance is measured properly, people 
consider them to be fair and there is consent to the scheme. 
 
6.5 Rewarding the team 
Various forms of 
group rewards
can be used as an incentive to co-operative performance and mutual 
accountability. 
6.5.1 Group bonus schemes 
Group incentive schemes typically offer a bonus for a team which achieves or exceeds specified targets. 
Offering bonuses to a whole team may be appropriate for tasks where individual contributions cannot be 
isolated, workers have little control over their individual output because tasks depend on each other, or 
where team-building is particularly required. It may enhance team spirit and co-operation as well as 
provide performance incentives, but it may also create pressures within the group if some individuals are 
seen not to be pulling their weight. 
6.5.2 Profit-sharing schemes 
Profit-sharing schemes offer employees (or selected groups) bonuses, directly related to profits or value 
added. Profit sharing is based on the belief that all employees can contribute to profitability, and that 
that contribution should be recognised. The effects may include profit-consciousness and motivation in 
employees, commitment to the future prosperity of the organisation, and so on. 
The actual incentive value and effect on productivity may be wasted, however, if the scheme is badly 
designed. 
(a) 
The sum should be