Team-Based Pay Plans: A Key to Effective Teamwork

In general, a team is a group of employees who are charged with working together to identify problems, form a consensus about what to do, and implement necessary actions in relation to a particular task. Perhaps the most important prerequisite for teams members' jobs be interdependent. Administrative systems must be able to record performance based on team accomplishments yet also be able to make payments to individuals over time periods that may vary depending on the nature of team assignments. Design considerations for team-based pay plans include: 1. setting group goals, 2. linking team goals to the organization's strategic plan, 3. developing a performance measuring system, 4. determining the allocation method, and 5. devising a payment method. The most commonly mentioned results from team-based pay plans are: 1. improved productivity, 2. improved employee satisfaction with job and pay, 3. reduced costs, 4. reduced absence and turnover, and 5.improved product or service quality.