The question - What is likely to be a better motivator, a small team bonus or a larger individual one?

The background - This relates to a team of 8 engineers providing IT services to external customers.  Each individual has targets, we operate feedback, ooos and coaching plans.  I have some budget to implement a bonus which would be about £50 per week, this could stretch a bit. 

I see two ways of cutting this up.  Give £50 to the person that performs best in relation to their targets each week.  Or make it monthly and give £50 to every person if the team hit the whole month target. (The team member would have to have hit their own too)

My inclination is individual. An individual can only be responsible for their own behaviour and if each individual is trying harder the overall team benefits.  Also, the bonus is more significant and worth having.  Finally, being weekly it keeps it very current and a bad week doesn't put them out for a month.  The downside is it may encourage selfish behaviour. 
I should add, the majority of the team are regularly at or around their targets, so this isn't intended as a substitute for managing them properly, more of an extra carrot. 

I would like to hear others thoughts and experiences in this area.
Thank you in advance.

STEVENM's picture

"I have some budget to implement a bonus which would be about £50 per week, this could stretch a bit."

I'm curious - is it mandated that it be a bonus, or are you free to use the funds as you see fit?  Outside of the scope, but I'm inquisitve.  And got to thinking about other ways to spend on the team that aren't one of these two structures.  But that's just me being lost in my own head.

Now, to the question you asked.

"What is likely to be a better motivator, a small team bonus or a larger individual one?"

BLUF:  Rewarding the team as a whole seems to win in a risk/reward comparison. 

When rewarding the whole team your troubles are smaller or less frequent rewards which would do less to motivate each individual and you feeling you don't get to focus the rewards on the people doing the most to earn them.  I suspect that the top performers will be self motivated and want to get a win for the team anyway.  That's hopefully why they're top performers.  Those at other tiers will not feel like "John is ruining the curve, so there's no point" and my guess is you'd get a lot more out of them.  And it puts the incentive on the supporting behaviors we want.  Team unity, that sort of thing.

The other option is a "Bounty" style bonus.  Every job I've worked in the last half decade was in an environment where the 2nd tier performers would have to at least double their productivity to catch up to the normal performance of the few at the top tier.  Maybe it's not as pronounced on your team, but there are always gaps.  Differences in performance may not be the only ones, too.  Differences in available resources, work schedules... You could adjust targets so everyone is on 'even ground' as far as their chances to win the reward, but then you run the risk of top performers finding 'even ground' unfair since their superior work should give them a superior shot at the reward.  Even in a theoretical perfect scenario where everyone is pulling a similar amount of weight it seems dangerous.  Aiming for that kind of competition creates risks to team cohesion.

It's all theory, but that's my take.  Hope it helps.  Let us know what you do and how it goes?

uninet22's picture

I have struggled with the same question, until I read the book "Drive" by Daniel Pink.  You can even look up a brief summary video on YouTube that gives a basic explanation.  What studies are showing is that, in a complex environment, where problem solving is required, the 'carrot and stick' method actually HURTS performance of the team and individuals. 

I've seen it happen firsthand.  Especially when the reward program is poorly thought out and recklessly implemented, it causes nothing but confusion, frustration and loss of focus. 

You may still choose to reward good performance, but after reading this book your whole perspective on the problem will change.

mark_odell's picture

Thank you for your thoughts. 

On the budget. To clarify, one of my other teams, doing very similar work, already has a bonus scheme in place and has for many years, the intention was to get more parity between the teams.  I could spend the money on something else, or not at all.   I'd love to hear any other ideas you had.

I have just ordered "Drive", maybe I will delay any decision until I have read it.

STEVENM's picture

So this is about getting the teams structured similarly as much as other things...

Stop my high C whenever you like, but that leads me to new questions.  Has anyone looked into the performance of the two teams?  If team A has no bonus, and B had no bonus then added one it seems like it would be easy to measure the value those dollars are providing.  You have a control and a test group right there.  Reviews and any reporting in place on the work of the teams in question should shed a lot of light on how much it affected motivation and results.

mark_odell's picture

Yes, I guess it is.  On the question of whether or not to have a new bonus at all; is it demotivating to be in the team that doesn't have a bonus opportunity?  I think yes.

You're also right that there must be a way I can experiment using the current team with the bonus in place.


STEVENM's picture

You may not need to do further experimenting... seems like it's already been done.  The problem is nobody was likely to focus on documenting it because nobody thought of it as an experiment, so it may take some digging if you want to find the results.  I would agree on it potentially being a thorn in your directs' sides that they're 'left out'.  It's possible.  Though it sounds like it hasn't hurt performance too much if so.  And I wouldn't walk away from the core purpose of rewarding your directs.  It's a worthy motivation.

Sorry, I'm the type who'll keep digging for information until 2 months after you've chosen a path.  So I should just pipe up with what I have:

As it stands I'd take steps to improve the work environment and morale (General improvements, just treating people well.  Do an O3 at lunch with each for starters.  Attention + reward, can't be a bad thing) with the funds because I suspect (high C going with a gut feeling here, watch out) it will lead to a smaller improvement but a sustainable one.  Probably in retention too.  Nice places to work are hard to find sometimes.  And I wouldn't do it based on targets, I'd just start doing it. 

Second choice being team bonus.  For similar reasons, but my gut just says it won't work as well.  People get into a weird place mentally when they think of money directly, myself included.  But I could easily be wrong.

Last choice being a bounty style bonus, which I think would provide a short term spike in productivity then drop back down to normal as they get used to it.

My uninformed 2c.  Hope it helps.

mmann's picture
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Is it important to increase the teamwork?  If the team is tight and already works well together you might not get improved results from a team reward. 

If there's in-fighting amongst the team members, link the reward to a goal that's only attainable if the team works together.

If your greatest benefit lies in one or more individuals making a paradigm shift in accomplishing their work, then make it an individual stretch goal.

The intent of the bonus is to increase results.  Whatever you try, make sure the team knows you're trying something and it could change in the future if it's not giving you the results you seek.