Compensation programs for self-managed work teams

Teams

Analysis of Self-Managed Work Teams

The autonomy of work teams has increasingly become a necessity in many enterprises who rely on a depth of expertise, experience and wealth of knowledge that their knowledge-rich employees provide (Roper, Phillips, 2007). Given how complex, diverse and deep specific areas of expertise are in the core functional areas of any business, it isn't possible for a single manager or leader to have an expert-level command of all expertise. This makes the formation and successful functioning of a team even more critical, as a leader must create a culture of trust, openness and shared communication and collaboration. This is accentuated and made clear in the empirical studies of exceptional leadership of virtual teams across diverse cultural and geographic locations (Muthusamy, Wheeler, Simmons, 2005). The intent of this analysis is to critically evaluate the role of compensation programs for teams, the pros and cons of work teams and validate the belief that teams reduce the number of managers required by an organization.

Analysis of Team Compensation Programs

There are a myriad of potential approaches of defining and delivering compensation programs, with the unique needs of large virtual teams emerging as a catalyst that is transforming the entire area. The greater the autonomy a given self-managed work team has the greater the accountability for results that require tight collaboration and communication across a geographically diverse set of team members (Power, Waddell, 2004). Team compensation therefore is becoming more attuned to the cross-functional, collaborative and highly communicative needs of self-managed teams. The traditional approaches of defining job-based pay which is only focused on outcomes, person-based pay that is predicated on competency or skill sets, or variable pay based on individual and share project collaboration and attainment of objectives are the three dominant approaches to team compensation today. There are a myriad of approaches to managing the combining and synthesis of these specific approaches, varying by the type of company using them, their corporate cultural norms and values, and the relative pace of their business models and value chains (Power, Waddell, 2004).

What all these team compensation programs have in common however is the providing of a foundation for autonomy, mastery and purpose to be included in each team members' roles and responsibilities throughout their organizations. The combining of autonomy, mastery and purpose are essential foundational elements for long-term learning and motivation to continually grow over time in an individual's role and career (Leavy, 2012). . The most effective team compensation programs reinforce individual accountability regarding performance while making it clear that continual improvement in communication, collaboration and shared responsibility for team advancement are shared across any team, whether it is virtual or in the same office or physical location (Muthusamy, Wheeler, Simmons, 2005). Examples of successfully managed teams using these approaches are the software development departments and divisions at Google, who has several hundred developers throughout India and Asia, and the IBM Global Services business unit that has over two thousands contributors across sixteen nations worldwide (Power, Waddell, 2004).

Teams Reduce the Number of Managers Required in an Organization

One of the most predictable indicators of an effective work team is the ability to stay focused on challenging, highly complex goals that require collaboration without being micro-managed or managed at a very transactional level. Excellently managed work teams have transformational leaders that combine inspirational motivation, idealized influence, intellectual stimulation in the form of thought leadership and individualized consideration tot the needs of each member of the team (Muthusamy, Wheeler, Simmons, 2005). Great leaders of work teams take these four factors into account and create a very solid structure that provides each team member with the autonomy, mastery and purpose necessary to excel in their specific roles (Leavy, 2012). Excellent leaders are able to create and sustain this level of unified organization by concentrating on the unique role of a team and getting everyone completely involved and seeing how their ownership of tasks has a direct effect on the team's ability to attain challenging, complex goals and objectives. A greater leader of a work team encourage autonomy, time investments to gain greater mastery of a given area, and above all, infuses a very strong sense of purpose in the team's vision, mission and objectives with very member of the team. The design and development teams at Boeing have mastered advanced techniques for making distributed work teams successful (Adrian, Snow, 2007). Figure 1 illustrates how remote work teams planned and define the supply chain for the Boeing 787.

Figure 1: Remote Work Teams Planned and Defined The Supply Chain for the Boeing 787 (Adrian, Snow, 2007)

Source: Boeing.com