Many companies use for the motivation of their employees – in particular in sales – so called competitive premiums and individual bonuses depending on the individual results. From my point of view this causes a major problem for the team motivation and the team spirit:
On the one hand the top management always talks about team spirit and requests from their employees team cooperation ( „ We are all members of one big team and we are all sitting in the same boat “ – of course in different classes according to the individual positions! ) – on the other hand the same top management insists on strict individual targets and performance plans. This seems to me to be a clear contradiction!
Quite often this leads to discussions and conflicts between the employees about the fairness of the bonus or premium system. In particular in companies, which have central and regional sales teams the sales people have a tendency to compete against each other by offering the same client higher disounts. The clever client misuses this and plays the sellers off against each other. This leads to „ cannibalism “ of the clients which only damages the image of the company and the outcome is a significant decrease in profit margins. As a result of this the company looses money and earns less profit.
The sales contests, which are only based on the individual results of the seller cause justice problems, fairness problems and have a negative effect on the desired team spirit. They produce only a few „ winners “, but quite a lot of „ loosers “! Those contests systematically destroy the team spirit and lead to the demotivation of the individual team members. If the top management demands team spirit and good cooperation among the employees, but the bonus depends only on the individual results, then this has a negative and counterproductive effect on the motivation of the employees.
If you take into consideration, that in many companies the incentive systems focus only on short term results and on the fulfillment of the individual plans, but they do not take into account qualitative, complex and long term tasks, then there can be only one logical conclusion:
The so called incentive systems are absurd and they destroy the individual, internal motivation of the employees and the team spirit! It is much better to pay fair and motivating individual salaries and to support the team spirit by paying a team spirit. And the top management should not forget: „ If you pay peanuts, then you get monkies“. I doubt, that „ monkies “ have a real team spirit!