What Are Corporate Incentive Programs?

The team incentive plan, also known as the team incentive compensation plan, refers to an incentive compensation plan that determines the team's salary level based on the team's work performance, and is a type of employee incentive plan.

Team Incentive Program

Team incentive plans have the following forms of operation:

(1) First record the output level of each member to determine the performance level of the member, and then determine the evaluation criteria of the team member's compensation, and calculate the salary of each member according to this standard. When determining the evaluation criteria for the compensation of team members, the following three methods are generally used: all members calculate compensation according to the standard of the highest-yielding employee, all members calculate compensation based on the standard of the lowest-yielding employee, and all members calculate compensation based on the average team level .

(2) Determine the output index according to the final overall output level of the team, and then all members will get the corresponding compensation according to the established wage rate of the work performed by the team.

(3) Select the performance or productivity that the team can control as the measurement standard.

The team incentive plan can enhance the team's ability to make plans and solve problems, and it can help promote mutual cooperation between team members, thereby improving the team's performance and bringing more benefits to the enterprise.

Research has proven that team incentives and personal incentives have the same effect in improving performance. If the team size is between 8 and 12 people, and the task given to them is the task of the entire team rather than a single person, the implementation of the team incentive plan will be the best. In addition, some high-tech companies and scientific research institutions have also adopted team incentive programs to reward researchers in certain fields.

However, if an institution-wide incentive scheme is used, the relationship between individual efforts and returns will be so small that there will not be a clear relationship between individual efforts and total output. Employees feel that their income is very close regardless of whether they work hard or not. They will also feel that in addition to their own efforts, and even their own and colleagues' efforts, there are many factors that may affect the total output, such as workflow and technological changes. This is where team incentive programs should avoid adverse effects.