Company Culture, Workplace Culture

Cons of Team-Based Incentives

In a previous post, we discussed some of the benefits of a team-based incentive plan, whereby bonuses are awarded based on the success or shortcomings of an entire team and not on specific individuals. In this post, we’ll look at some of the drawbacks of this approach.


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Free Riders … Or the Perception Thereo

When a group of individuals is working toward a team goal and splitting the rewards of achieving that goal among themselves, it’s always possible that some members will free ride on the efforts of others. Even if everyone is giving it his or her all, there may be some who feel they are carrying a disproportionate amount of the load.

“If team members perform at vastly different levels, creating a group incentive can set the stage for drama in the workplace, particularly if some staff members feel compelled to work harder than others to carry the workload,” says Lisa McQuerrey for BizFluent. She adds that this can cause drama among teams rather than build cohesion.

Revolt by Top Performers

Whether accurate or not, some top performers may feel they would be far better off if their incentives were based on individual performance instead of team performance.

They may tend to see the rest of their team as a weight dragging them down. One way or another, they may choose to rebel against the system. This could mean sandbagging or outright refusal to participate.

Management Might Lose Sight of Individual Performance

While team performance is important, evaluating teams as a whole creates a risk that managers will lose sight of individual performance. Just because teams are being evaluated as a whole doesn’t mean that managers shouldn’t be paying attention to individual development and contributions.

For example, a quiet member of a strong team might not be getting the personal attention he or she needs to help him or her develop personal skills that will ultimately benefit the team and the organization as a whole.

In this post and a previous post, we’ve looked at some of the pros and cons of team-based incentives. It’s impossible to label one superior to the other because both have benefits and drawbacks depending on the situation. Knowing what those are will help an organization determine which is appropriate and when.