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A company decided to change their work organization from individuals working independently to production teams. However, they decided to continue their same approach to performance evaluation and salary adjustment, which had worked well since the performance evaluation process had been improved. After a year's experience with the new team structure, it was obvious that productivity had decreased. A consultant's conclusion was that the approach to performance appraisal and assigning rewards was a cause of the teams' failure to perform.
Which approaches to performance evaluation and granting rewards would have been more effective in this situation?
Select one.
When transitioning to a team-based structure, it is essential to align performance evaluations and reward systems with the new organizational setup. Group performance evaluation with group rewards would have been more effective in this situation because it fosters a sense of collective responsibility and encourages collaboration among team members. Individual rewards can create competition rather than cooperation, which can undermine team productivity and morale.
Hackman, J. R. (2002). Leading Teams: Setting the Stage for Great Performances. Harvard Business Review Press.
Katzenbach, J. R., & Smith, D. K. (1993). The Wisdom of Teams: Creating the High-Performance Organization. Harvard Business Review Press.