Team-Based Compensation System

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Team-based Compensation Systems Team-based compensation has been a common pay system in business for decades. Team-based compensation, according to Strategic Compensation: A Human Resource Management Approach by Joseph Martocchio, is defined as individual members of a group receiving a financial reward for the attainment of a group goal. This concept can be best shown through an example; a company needs a presentation on their current market share, and assigns a team to create it under a quick deadline. Different team members are assigned different tasks to complete the common goal of producing the presentation. Individual financial rewards are given if the entire team completes the presentation to the company’s satisfaction and before the due date. This concept varies from the common individual-based compensation strategy that many firms employ. Individual-based compensation, as defined by Martocchio, rewards employees for meeting such work-related performance standards as quality, productivity, customer satisfaction, or other relevant factors. Team-based compensation is adopted by businesses for many reasons. For a business that struggles with collaboration morale, it can help incentivize group work. For a company that strives to combat an individualistic workforce, it can aid in cooperation. Employing a team-based compensation strategy in a company will encourage employees to engage with each other, collaborate and strive towards a common goal together, which creates major business benefits. Also, team-based compensation can help a firm stay competitive within its market. Companies that outline their people as their competitive advantage need a strong compensation system to attract and retain their workforce, and employing a team-based compensation strategy will aid in this. Firms that struggle with workforce productivity are going to fall behind

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