Team Building Tip of the Month: Aligning Incentives

ATeam Building Incentivesligning Incentives

If your organization is not getting the results you want, maybe you are rewarding the wrong things. Often we find companies that want their teams to work together but the company incentive system focuses rewards on individual or department goals. Thus a group or individual may be doing their task well, but at the expense of the overall product or output.

Many organizations success depends on solid hand-offs and coordination between departments or aligning incentives. Production, sales, and customer service departments must work together to meet customer demand and expectations.

In complex processes, it helps to have regular meetings between departments to share information. Many creative solutions come from people with different perspectives.

Consider aligning incentives for staff that reflect both their individual, department and overall company success in achieving tangible goals. Periodically review these goals to make sure everyone is aligned. People are smart and will do what they benefit from. Make sure it is the right thing.

A great article by the Harvard Business Review explains this and how it works in the supply chain, but the value of this article extends to every type of business. “A supply chain works well if its companies’ incentives are aligned—that is, if the risks, costs, and rewards of doing business are distributed fairly across the network. For reasons that we shall later discuss, if incentives aren’t in line, the companies’ actions won’t optimize the chain’s performance. Indeed, misaligned incentives are often the cause of excess inventory, stock-outs, incorrect forecasts, inadequate sales efforts, and even poor customer service.”

Team Building with Terrapin Adventures

Terrapin Adventures provides professional team building programs in the Baltimore-Washington region to help your team perform at its optimum level. You can take advantage of our Challenge Course – Zip Line, Giant Swing, Climbing Tower, low and high ropes courses – or we can come to you.

Experience our Corporate Team Building challenges and your group will find better, more effective ways to communicate, provide constructive feedback and work together.

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This entry was posted on Saturday, June 11th, 2011 at 6:55 pm. Both comments and pings are currently closed.

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