Recognizing and rewarding your people: Should you focus on teams or individuals?

It's an essential part of motivating people to complete their work to a high standard. But we now live and work in a world where more and more employees work in teams. In today's team-centric workplace, how do you recognize employees' contributions to team success in the fairest way?

According to a 2018 Microsoft worker survey, people are on twice as many teams as they were five years ago. A 2016 Deloitte study on Global Human Capital Trends reveals that in today's digital work environments, businesses and governments around the world are moving away from the traditional hierarchical organization models to what Deloitte calls "network of teams."

However, recognition still doesn't extend to teamwork in many workplaces. In one large organization where I worked as a consultant, individual recognition was the go-to option. Once a year, the CEO gathered all the staff together and handed out bonus letters and checks to each employee. There were sales teams, customer service teams, product teams, HR teams, and various task forces, all contributing to the company's success. Groups came together to complete most of the work, yet there was never an award for teams.

In sports, when a team wins, there's a high-energy exchange of high-fives and pats on the back. There's an esprit de corps. We celebrate the whole team as one winning band of brothers or sisters. At the office, teams are rarely celebrated with such enthusiasm or fanfare.

Is team recognition better? Or is it best to reward individual contributors? Let's start by looking at one significant advantage and disadvantage of each option.

Recognition of individual contributions

When you reward individuals for their hard work and for achieving results, you incentivize them to keep up the good work. This recognition can, in turn, influence others to improve their performance.

However, rewarding individuals may create a more competitive environment. This could undermine any efforts to establish or maintain a collaborative culture within the organization.

Recognition of team contributions

Recognizing an entire team encourages greater camaraderie. And, when people are motivated to work harder for the good of the team, it often results in higher performance.

Team rewards also put pressure on team members to achieve results for fear of letting the team down. One study found that some workers are more motivated by team spirit and a desire to help their team members than by money.

However, the downside is that it can reward unmotivated employees who rely on other team members to carry the load. It may also put undue pressure on team members who are less capable, or those who struggle to keep up with the highest performers in the group.

Social loafing: A potential problem with team-based recognition

Social loafing is the tendency of certain members of a group to get by with less effort than they would have put in when working alone. In organizations, this manifests itself in "freeloaders" who get away with doing less.

One of my coaching clients works at a company that actively supports team incentives. My client mentioned that in this setup, he felt short-changed. One particular colleague received the same rewards as the other team members, even though he did less work. He shirked some of his responsibilities, and often had a free ride on specific projects that were more challenging. But, at year-end, he received the same bonus as the rest of the team. It made my client wonder whether he should scale down his own efforts. "Why should I work so hard" he said, "when others are not carrying their load?"

I recall a similar complaint from a client a few years ago. Let's call her Rodika. Rodika felt perturbed that while working on a design project, she and her co-worker Agnes had come up with some of the best ideas - many of which were then adopted by the company. The two other members of the group were putting in markedly less effort, yet they all received the same reward. Understandably, this was viewed by Rodika as very unjust, and she felt less rewarded for her efforts as a result.

What can you do about freeloaders?

Here are a few tips for preventing freeloaders from enjoying the ride:

• Make it clear to employees that the company evaluates every individual's performance. Employees are more likely to up their game if they know that their performance in a group is easily identifiable and assessed
• Establish guidelines on what constitutes high performance for each team member's position. Once you and your people know the guidelines, it's easier to spot these traits and behaviors in members of the team
• Be clear with everyone about performance standards and expectations
• Provide training on how to work in teams. Give employees access to team-building resources
• Show people how their work matters, no matter what position they have. Connect the dots for employees so that they can see how their work is essential and aligns with the company's mission and goals.

Hybrid recognition programs

Both individual and team-based recognition have their pros and cons. So, what would be a compromise solution? One avenue to consider is offering a hybrid recognition program.

A hybrid recognition program offers a mix of individual and team-based recognition. When you reward group and individual achievement, you can motivate everyone to work hard toward achieving the team's goals. At the same time, you also recognize individual team members who go the extra mile. These are the people who make outstanding contributions to the team's overall performance. The work they do is worthy of special recognition and should be rewarded appropriately.

In situations like those discussed above, a hybrid incentive plan can help. It rewards individual contributors, in addition to rewarding a team's overall achievement. A hybrid plan can help to mitigate the effects of the freeloaders or less stellar contributors. It might even help to motivate these lesser contributors to clean up their act.

Done right, hybrid incentive plans may be the best of both worlds, for both small and large companies.

Monitoring your recognition program

Ultimately, whichever way you decide to improve your recognition plans, it's advisable to monitor and periodically evaluate your program's effectiveness. As with most things in business, one size may not fit all.

Ask yourself if the incentive structure you're using is helping you to achieve the results you want. Survey your employees to track their opinions and feelings about the program. Then use the survey results to help you improve your recognition program, and get the best from all of your people.