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Team-Based vs. Individual-Based Incentives

In this post, I would like to discuss the two distinct methods of providing incentives for employees. The first one is the individual-based approach that aims to increase the motivation of the best workers by directly paying them for their achievements while providing less efficient employees a reason to perform better. By setting different goals for each employee depending on their current and desired skill levels, a company can not only adequately share compensations with workers but also promote self-education and autonomy. However, some individuals may become too involved in the competitive side of this incensive, which may lead to questionable decisions, cheating, and even aggression among workers (Carver, 2021). This method may be detrimental for a company that relies entirely on harmonious cooperation.

A team-based incentive plan is a second option that provides a different set of benefits and challenges. First and foremost, it gives teams an incentive to help their lagging members due to the possibility of decreased payments due to the lack of skills of a particular worker (Carver, 2021). Not only does it help with sharing experience, but it also motivates less-skilled employees to improve their skills to avoid becoming a burden. However, team-based incentives have a significant downside that may lead to increased dissatisfaction with payments among employees who are seen as overachievers (Carver, 2021). Moreover, some employees may receive increased payments that they did not deserve because they were put in a highly productive team.

In conclusion, depending on the required effect and the organizational culture, it might be better to use either individual-based or team-based incentive plans. While there is a possibility to combine these two incentive plans, the company can expect to see greater satisfaction with an individual-based approach to incentivizing employees. Assuming that a large R&D facility can withstand increased internal competition, it might be better to utilize an individual-based incentive plan due to its impact on employee satisfaction. Moreover, this approach would exclude the possibility of undeserved payments, which would help the company with its financial situation.


Carver, C. (2021). Incentive plans 101: What you need to know. Astron Solutions. Web.

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