1. Mention different form of team-based compensation/reward with examples.

For an increasing number of organizations, implementing a compensation plan that rewards

employees for successful teamwork provides great synergy with their organizational model.
Companies that have such plans take various approaches to structuring team-based rewards,
including programs such as incentive pay, recognition, profit sharing and gainsharing. (See
Table 1) Human resources professionals that use these plans indicate they can be an effective
way to reward team performance, but “must be carefully structured to avoid unintended
consequences that could undermine individual initiative and business goals”
The incentive is a positive motivational influence on a person that helps improve his performance. Thus,
it can be said that all the measures taken by the management to improve the performance of its
employees are incentives. The incentives can be broadly classified as financial incentives and non-
financial incentives.

Financial Incentives

In today’s socio-economic condition money has become a very important part of our lives. We need
money to satisfy almost all our needs as it has purchasing power. Thus, financial incentives refer to
those incentives which are in direct monetary form i.e. money or can be measured in monetary terms.

Financial incentives can be provided on an individual or group basis and satisfy the monetary and future
security needs of individuals. The most commonly used financial incentives are:

(a) Pay and Allowances

Salary is the basic incentive for every employee to work efficiently for an organization. Salary includes
basic pay, dearness allowance, house rent allowance, and similar other allowances. Under the salary
system, employees are given increments in basic pay every year and also an increase in their allowances
from time-to-time. Sometimes these increments are based on the performance of the employee during
the year.

(b) Bonus

It is a sum of money offered to an employee over and above the salary or wages as a reward for his good
performance.

(c) Productivity linked Wage Incentives

Many wage incentives are linked with the increase in productivity at individual or group level. For
example, a worker is paid 50 rupees per piece if he produces 50 pieces a day but if he produces more
than 50 pieces a day, he is paid 5 rupees extra per piece. Thus, on the 51st piece, he will be paid 55
rupees.

(d) Profit-Sharing

Sometimes the employees are given a share in the profits of the organization. This motivates them to
perform efficiently and give their best to increase the profits of the organization.

(e) Retirement Benefits

Retirement benefits like gratuity, pension, provident fund, leave encashment, etc.
provide financial security to the employees post their retirement. Thus, they work properly when they
are in service.

(f) Stock Options or Co-partnership

Under the Employees Stock Option Plan, the employee is offered the ordinary shares of the company at
a price lower than its market price for a specified period of time. These are non-standardized offers and
shares are issued as a private contract between the employer and employee. These are generally
offered to management as a part of their managerial compensation package.

Allotment of shares induces a feeling of ownership in the employees and they give their best to the
company. Infosys, GoDaddy and The Cheesecake Factory are some of the companies that have
implemented the scheme of the stock option.

(g) Commission

Some organizations offer a commission in addition to the salary to employees for fulfilling the targets
extremely well. This incentive encourages the employees to increase the client base of the organization.

(h) Perquisites

Several organizations offer perquisites and fringe benefits such as accommodation, car allowance,
medical facilities, education facilities, recreational facilities, etc. in addition to the salary and allowances
to its employees. These incentives also motivate the employees to work efficiently.

Non-Financial Incentives

Apart from the monetary and future security needs, an individual also has psychological, social and
emotional needs. Satisfying these needs also plays an important role in their motivation. Non-financial
incentives focus mainly on the fulfillment of these needs and thus cannot be measured in terms of
money.

However, there are chances that a particular non-financial incentive may also involve the financial
incentive as well. For example, when a person is promoted his psychological needs are fulfilled as he
gets more authority, his status increases but at the same time, he has benefitted monetarily also as he
gets a rise in salary. The most common non-financial incentives are:

(a) Status

With reference to an organization, status refers to the position in the hierarchy of the organizational
chart. The level of authority, responsibility, recognition, salary, perks, etc. determine the status of an
employee in the organization.

A person at the top level management has more authority, responsibility, recognition and salary and
vice-versa. Status satisfies the self-esteem and psychological needs of an individual and in turn,
motivates him to work hard.

(b) Organizational Climate

Organizational climate refers to the environmental characteristics of an organization that are perceived
by its employees about the organization and have a major influence on their behavior. Each organization
has a different organizational climate that distinguishes it from other organizations.

Some of the factors that influence the organizational climate of an enterprise are organizational
structure, individual responsibility, rewards, risk and risk-taking, warmth and support and tolerance and
conflict. When the organizational climate is positive employees tend to be more motivated.

(c) Career Advancement Opportunity

It is very important for an organization to have an appropriate skill development program and a sound
promotion policy for its employees which works as a booster for them to perform well and get
promoted.

Every employee desires growth in an organization and when he gets promotion as an appreciation of his
work he is motivated to work better.

(d) Job Enrichment

It refers to the designing of jobs in such a way that it involves a higher level of knowledge and skill, a
variety of work content, more autonomy and responsibility of employees, meaningful work experience
and more opportunities of growth. When the job is interesting, it itself serves as a source of motivation.

(e) Job Security

Job security provides future stability and a sense of security among the employees. The employees are
not worried about the future and thus work with more enthusiasm. Owing to the unemployment
problem in our country, job security works as a great incentive for the employees. However, there is also
a negative aspect of this incentive that employees tend to take their job for granted and not work
efficiently.

(f) Employee Recognition Programmes

Recognition means acknowledgment and appreciation of work done by employees. Recognition in the
organization boosts their self-esteem and they feel motivated. For example, declaring the best
performer of the week or month, displaying their names on the notice board and giving them rewards,
fall under the Employee recognition program.

(g) Employee Participation

Involving the employees in decision making regarding the issues related to them such as canteen
committees, work committees, etc. also helps in motivating them and inducing a sense of belongingness
in them.

(h) Employee Empowerment

Giving more autonomy and powers to subordinates also make them feel that they are important to the
organization and in turn they serve the organization better.

2. Do you think non-monetary rewards (Dinners, trophies…) motivate team member better than
hand cash Explain.

Non-monetary rewards have a number of benefits over other forms of reward.

They’re more cost efficient because the recognition itself is the focus, and the value from the
employee’s point of view is derived from the act of recognition.

Non-monetary rewards also make an immediate impact. Rewarding employees with things like
bonuses or pay rises can take time, meaning it loses some of its impact. The best way to reward
an employee is to do it straight away.

They’re also better for retention. An employee that stays with you because you’ve given them a
pay-rise can easily be lured away by another company. However, non-monetary rewards help
you build a relationship with employees, which they won’t get at other companies.

According to research in The Management Agenda by McCartney and Holbeche, non-financial

recognition was cited by 65% of managers as a popular motivator. Job enjoyment, challenge and
personal drive were also mentioned. The research also showed that lack of recognition was the
biggest demotivator at work.

What about nonmonetary rewards? Things like dinners, trophies, tickets to concerts or ballgames? Do
you think those things motivate team members as well as or better than--cold, hard cash? I've found
that, by and large, people who manage rewards for teams are much more favorable toward nonfinancial
rewards than are team members. It turns out they cost less than financial rewards. But vou've got to be
careful when somebody tells you what somebody else wants. 

That said, human beings differ a lot in what they value. Some people would rather have a dinner
honoring their team, be congratulated by the CEO, who says, “This is the greatest team we've ever had *
There are people who would rather have that event than a $5,000 bonus. No question about it. How
many there are is an interesting question. 

Particularis. the whole history of the quality-circle movement was built on nonfinancial recogni tion
Ihresperience with a lot of those programs was that they got along pretty well with nonfinancial 

rewards for a while. People got a kick out of the T-shirts, hats, and newsletters with their pictures in
them, and saving the company $100,000. Then they got to the point of saying, "I've saved the com pany
$2 million, I think it's time I participated in the financial savings." 
3. Reward Behavior Not Result-Discuss in light of Motorola’s Goodball’ observation.

Traditional thinking may lead you to link the performance of your players to their results. In cost
reduction, for instance, that's possible because the cuts are relatively easy to quantify. But in other
areas measurement can be a nightmare. In his book The Reward Plan Advantage (Jossey-Bass),
McAdams writes, "If it is not some thing that is easily measured, then you tend to measure on activities.
Did you meet a milestone? Did you get it done? But it's harder to do that. That just may be a candidate
for after-the-fact recognition rather than project team incentives. 

Motorola's Goodall offers a telling argument against trying to link rewards and results. "It's unfair to
reward cross-functional teams solely on the basis of results, because they are often put into positions to
move organi zations forward by taking risks. Sometimes the risks they take might not be successful. The
worst thing to do would be to rap their knuckles." 

This has led Goodall to reward behaviors and activities rather than results. "Where people are working
on cross-functional teams, management should look at the elements of team play when it is distributing
rewards," he says. "It should ask, for example: 'does the person display participative behavior? Is the
person an empow ering individual? Does the person listen in a team environment?' A team may be
unsuccessful because of the lack of team playing by certain individuals. That should be spotted in a one-
on-one appraisal process and be reflected in the level of rewards given to the individual in base pay, or
in promotion, or ability to maintain employment within the company." 

Team performance can be judged as an employee goes through the normal evaluation process. Robert
P. Mchutt of Du Pont human resources says his company uses a 360-degree review process in which a
person is evaluated by peers, subordinates, and supervisors. "As you go through that, you're going to get
some of the input on a person's performance on a project," he allows. 

Jay Schuster, partner at Schuster-Zingheim and Associates Inc. and co-author of an ongoing study of
team pay sponsored by the American Management Association, also favors the 360-degree review
process. But he feels that you can't just implement such a system overight: "For our study, we looked at
organizations that are team-based, like Honeywell and Selectron. We found that when pay is based on
individual perfor mance, it erodes team cohesiveness and makes it less likely that the team as a
collaborative element will meet 

its goals. American culture is individualized: Gary Cooper in High Noon gets the job done by himself. As a
result, pay systems have been individualized. But now, team organizations are becoming more
prevalent, so the first thing to do is base all team members' pay on team performance only. Most teams
are not ready to base pay on multisource performance management early in their formation. When the
team becomes mature enough, the members will let you know they're ready to have pay based on
individual performance. The best way to do that is 360-degree performance management. 
 If team members' pay levels vary from one another, so should their compensation for team
participation. TRW's Minkoff says, “Many companies have a very structured compensation approach,
and bringing a bunch of people together from all around the country with significant inequities in their
pay is an issue for them. We tend to not overreact to that. We say to employees, 'We're paying you for
what we expect you to do, and your value.' There may be big differences between team members, but
we seem able to better tolerate those inequities than I find with some of my buddies in other
companies." 

4. How do you rate the contribution of the individuals who form the team and act in a team?

Going back to the highly interactive team, how do you rate the contribution of the individuals who form
the team? Or would the peer-assessment process handle that for you! In many team environments, the
only well-informed judges about each other's performance are other team members. Usually no one
else sees the individuals' performance. Others see the performance of 

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502 PART 2 Implementation of Strategic Human Resource Management 

the team as a whole in the end product, but they don't see the contributions of individuals that led to
that end product. So you almost have to go to some form of peer-rating system. 

Peer rating also usually handles the problems of poor performers on the team. The argument goes that
if you have a system that individualizes the reward, you're happy to have the team slow pokes just tag
along because they'll get their just desserts in the end-nothing. The more valuable contributors will get
theirs. That's what typically happens when the members of the team do some sort of peer rating. You
might have the project manager look the team over and say, this person did or didn't contribute, but
ideally, the team divides the money. Very definitely. The easiest teams to deal with are permanent
teams. You just build team compensa tion into the normal job description or role description. You can
study the skills that are needed and put a compensation plan in place.

Teamwork - Making a Contribution

 Develop a team mentality. Think "we," not "me."
 Be open to the ideas of your teammates. No one person has a monopoly on good
ideas. ...
 Be respectful of others. ...
 Be approachable. ...
 Be helpful. ...
 Be a role model. ...
 Accept others as they are. ...
 Avoid rewarding people for things they do that annoy you.
Working well with others shows that you are committed to achieving
both personal and organizational goals. Displaying
consistent teamwork skills also shows a strong work ethic, increasing
your chances for raises, promotions and other earnings. No matter
your experience level or position, continuously focusing on becoming
a better team player will lead to success in your career.
When teams don't function well, it's often because there's a lack of
communication and understanding about what the group's objectives are.

If you want to be a good team player, make sure you understand the group's
goals. Ask yourself key questions such as:

 Why are we here?

 What is the "perfect ending" to this project?
 What is our deadline?
 How often will we meet?
 What is our budget?
 Who is in charge of implementing our ideas?
 What roles and responsibilities will each of us have?
Be clear about what you're there to do. This way, you'll complete your tasks to
the best of your abilities.

Be involved and active within the group. If you sit silently while someone else
discusses an idea that you know won't work, you could damage the team's
chances of achieving its outcomes. If you've got an alternative suggestion that
might be more effective, then share it with the group.

And the opposite applies as well: if people discuss a plan that you think is
great, then speak up. They might really need and appreciate your support,
even if they don't show it.

When you communicate with your team members – whether showing support
or challenging their thinking – it's important to stay positive and respectful.
Keep your thoughts and input objective and fair, and try your best not to get
upset and angry.
Things can change quickly in a team environment. People can come and go,
budgets get cut, and goals redefined.

The best team players know how to be flexible . They don't fight change –
instead, they see it as an opportunity for growth.
Your willingness to remain comfortable and positive in a constantly changing
environment is an important business skill – and your boss will likely notice.

Offer positive feedback , and be prepared to provide help if colleagues need it.

Your willingness to collaborate and help others will make a good impression
on both the group and management.
It will also more likely be reciprocated in the event you find yourself needing
help, all of which has a positive impact on the team’s overall output. A
supportive team is a productive team.