I’ve posted before about the topic of giving performance rewards on an individual basis, versus rewarding entire teams or groups. I am not a compensation expert, but I find it interesting that individual-based rewards were shown (in one study, at least) to decrease communication among team members.

So I was interested when I saw on the ASAE & The Center Executive Management listserver a question from Eric Lanke, the ED of the National Fluid Power Association, about how to reward staff for being good "team players." I noticed that he got exactly ZERO responses from the thousands of execs and consultants on the listserver.

He and I exchanged a few emails about it offline. He was looking to reward entire teams (rather than each individual), but he was trying to find a way to measure effective teamwork and reward teams for that. During our conversation, he had a realization:

I think I see that rewarding association staffers for "working well together as a team" is a bit like rewarding football players for getting along with each other in the locker room. It’s nice, but ultimately we want to win games. Team bonuses should be based on a team accomplishing specific programmatic objectives. Ideally, those objectives should require "working well together as a team" in order to achieve it, but the "working well" part is not what is being rewarded.

There are a couple of points in here that I would unpack.

First, I agree that the reward metrics should be based, where possible, on actual results (shocking, I know!). We often pick behavior-based measurements, which sound good at the time, but can backfire. For example, communication is a good thing and something you find in high-performing teams, but base your bonus on level of communication in a team, and suddenly your servers will shut down from email traffic, but no one will be getting any work done. So, yes, if you have clear team accomplishments that can be measured, use those for the rewards (although that’s easier said than done sometimes).

That being said, as I leader, I would still pay attention to how the players get along in the locker room. You can reward a team for its performance, but don’t forget that its performance is affected by how it operates as a team. So leaders should support teams in exploring how they work together, or how they communicate, or how they run their meetings. I argue that team-based rewards will actually help teams to look at these things, so that’s why I like them. I believe many teams have more to gain in productivity from improving the way they work together than from any other kind of process improvement.

And I would add that leaders can "reward" people for the way they operate on the team outside of the bonus structure. These types of rewards are given more informally and through every day behavior, rather than formal rewards or compensation systems. How do you as a leader of the organization react to bullying behavior? Do you walk the walk as a leader when it comes to sharing information or admitting when you’re wrong? These behaviors and the way you react to your co-workers’ behaviors are critical in building better teams (thus getting better results). You will set the tone for how people interact in the locker room, so to speak. Both the locker room AND the win/loss record need your attention.