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Bonus schemes have a lot to offer a company. They can help encourage innovation, build loyalty, boost productivity and play a role in tearing down silo walls. Different types of bonus schemes work in different ways, and as a result they can have different outcomes. Having a clear understanding of what you are trying to achieve and the way in which different tools can help you is more likely to lead to the result you want. 




There are three broad types of bonus scheme, those that are targeted at individuals, those targeted at teams and those offered to entire companies. Last week we discussed individual staff bonuses; click here if you missed it. This week it’s time to put team bonuses in the spotlight.


Team-based bonus schemes are very popular as they help to increase productivity and build a rapport both within a department and sometimes beyond.

How they work depends on the make-up of the team that is being rewarded, with different approaches working for teams of similar people and teams comprised of different roles.

1. Homogenous teams

It’s relatively easy to implement a bonus scheme for homogenous teams comprised of people in similar roles. As you would expect, they can work very much like individual bonus schemes, whether they are based on productivity, quality, target or a mixture of the three.

However this is managed, it’s an approach that encourages co-operation. The process can also help expose future leaders, the people that have an intrinsic grasp of the benefits of nurturing and supporting colleagues for the benefit of the entire team and the project they are focusing on.

Admittedly, quantifying the level contribution of each individual within the team can be a challenge. Enhancements in data and reporting however mean that contributions are more easily understood so bonuses can be distributed among team members more equitably and more transparently (if appropriate). This will help ensure the effectiveness of the strategy and long-term health of the team.


2. Diverse Teams

Enhancements in data have also meant that teams comprised of a diverse set of roles can now be rewarded for success on a team basis more easily. Whether it’s a team involved in a pitch that brings together sales, marketing and design, or a retail team that cross-sells between departments, information can be tracked and exceptional performance rewarded far more easily than it could be in the past.

This can have several benefits for an organisation. By rewarding people in less client facing roles, they are more likely to take a deeper interest in the success of a project, which could be particularly effective for people working in bid teams for example. It could also lead to a less siloed structure developing within the business, which in turn could lead to innovation being shared more widely.



Whichever way the team is defined; a reward system can be used either to create a positive environment within a department or an element of healthy competition between teams.

Measurement criteria can be defined through an efficiently managed annual review with clearly defined objectives, but as we have discussed in other articles, when a reward is delivered close to the behaviour that you are trying to encourage, it’s more likely lead to that behaviour being repeated. This becomes self-perpetuating because the brain associates the right sort of behaviour with a positive reward.

By rewarding a team, you are also likely to encourage a positive attitude to being in the office, reducing absenteeism by people knowing that they are being relied on to play their role. It could also play a role in reducing presenteeism – people coming into the office with a throat full of flu – because they are more likely to be able to rely on their team to move their work forward without them having to come into the office and cough over everyone.

Offering team rewards also gives senior leadership something to praise when it comes to annual reports to stakeholders or messages of commendation from on high. In the past, these have sometimes been perceived as being the result of the right team leader having the right line of communication to leadership, but in a world where great work can be quantified quickly and easily, being mentioned in dispatches is less likely to release a waft of cynicism from other parts of the business: there’s an agreed, quantified and transparent methodology for delivering recognition and rewards.

Better morale, better reporting, healthy competition and improved innovation across the business. There’s a lot to be said for team bonuses.

Read part three: A guide to company bonus schemes. Click here.

If you missed part one: A guide to individual staff bonuses, click here.