Team Compensation Systems: a Survey and Analysis

The purpose of this project was to examine team compensation systems and to evaluate the impact of their critical elements--level (what to motivate), compensation mixture (what rewards motivate), and employee perceptions (how to motivate)--on team effectiveness. Twenty-three organizations, 108 teams, and 769 team members participated in this study. Project results found that teams that utilized team level rewards, especially when associated with a complete compensation mixture, had significantly higher team effectiveness scores compared to teams that utilized only individual level rewards. With respect to employee perceptions, results found that: (a) perceptions of system understanding, measure controllability, pay-for-performance, and payout frequency, particularly, were significant components of employee compensation system satisfaction; and (b) employee compensation system satisfaction and perceptions of compensation system effectiveness were significantly related