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Teams have become a popular way to organize business because they offer companies the flexibility needed to meet the demands of the changing business environment. While many companies have been quick to organize their workforce into teams, they have not been as eager to implement team‐based compensation systems. However, if team‐based organizations continue to utilize old, individually‐oriented pay systems, they will not fully realize the benefit of highly cooperative and motivated work teams. The purpose of this two‐part article is to examine the “ideal” team compensation system. Together, both parts will review the basics of both teams and compensation and then explore the ideal team compensation system from three levels ‐ framework, critical elements, and other, operational considerations. Part I provided information through the ideal team compensation system framework. This article, Part II, looks at the critical elements and other, operational considerations.

Reviews reward management practice in the construction industry, based on a postal survey of larger construction firms. The research results provide little evidence of thorough‐going use of reward management to encourage and reinforce organizational change. Collective agreements survive for manual employees. Non‐manual employees are loosely grouped in broad‐banded grading structures with significant scope for managerial discretion in the treatment of individual salaries. However, there is little evidence of developed performance management systems. The absence of more formalized reward systems may provide a short‐term benefit in allowing considerable flexibility but may have negative implications for long‐term productivity, the control of wage costs and the availability of skills. Given the uneven gender balance, existing pay systems could also give rise to claims for equal pay.

Emphasizes the need for coherence between the reward structure and the organizational culture of effective schools. Provides a framework for discussion which includes a typology of rewards, including pecuniary, non‐pecuniary extrinsic and intrinsic rewards. Analyses several pay‐for‐performance strategies, classified by permanency of increases (merit or incentive) and mode of distribution (individual or group). Explores the perceived advantages and disadvantages of various merit and incentive plans in support of effective schools. Suggests that more attention to a closer fit between compensation strategies, organizational strategies, and workforce behaviours is required to increase the positive effects of reward structures.

This article seeks to establish the extent to which a major bank’s (Finbank) reward strategy for managers demonstrates the plausibility of Lawler’s model of reward strategy. This model argues that business strategy implies individual and organisational behaviours which dictate the content of reward strategy. In addition, three critical elements of the reward system need to be aligned for the system to be effective: the organisation’s core values; the implementation process; and the structure. The data collected demonstrate that Lawler’s model presents three major complications. It over‐simplifies the process of strategy formulation and content; it gives equal importance to values, structure and process although the data showed that the last was of the greatest significance; and it is represented as unitarist and deterministic.

A survey of over 1,000 companies conducted in 1990 indicated that two‐thirds will be giving merit‐only increases in 1991, which was a 60 per cent increase over two years ago. However, a current question: Is pay for performance used effectively? This article examines both individual and group incentive plans and explores all key factors utilised in determining the outcome (implementation) of these plans. Furthermore, the structure of an effective pay‐for‐performance plan is outlined in light of the mission, strategy and objectives of the organisation to determine how rigid or entrepreneurial the design can be. It was concluded that pay for performance is fundamental for competitive organisations.

The purpose of this paper is to compare effects of different monetary team‐based reward strategies on performance, pay satisfaction, and communication behavior in computer‐mediated groups.

In a laboratory experiment, 32 groups of undergraduate students, each consisting of three individuals, interacted electronically and performed a consensus‐reaching task. Team‐based incentives were distributed either equally (each team member received an equal share) or equitably (each team member's share depended on her/his individual contribution). A control group received no team‐based (or other) incentives.

Hierarchical multilevel analyses revealed that both types of team‐based rewards increased team members' motivation and pay satisfaction compared to the control condition. Moreover, the effects of team‐based rewards on performance were moderated by group members' assertiveness. In addition, team‐based rewards lead to more cooperative and task‐oriented communication in the computer‐mediated groups. Finally, equally divided rewards led to higher pay satisfaction on average than equitably divided incentives.

On a research level, this study shows that team‐based rewards have positive effects not only on performance but also on communication behavior in computer‐mediated groups. As a practical implication, reward effects should be considered cautiously as they might be influenced by team members’ personality. Moreover, whereas no major differences were found between equity and equality principles in terms of performance, the latter seems to be preferable when satisfaction is a major issue in virtual teams.

The ongoing debate about the effects of bonuses on managers’ performance and the role of reward systems in organizations has still not led to a unanimous conclusion among academics and practitioners. Those in favor of bonuses state that applying bonuses and putting emphasis on monetary rewards increases productivity and organizational performance, while those against bonuses claim that use of bonuses and monetary rewards leads to counterproductive results. A key question often overlooked in the discussion is: How important is handing out bonuses for an organization to become and stay successful for a longer period of time? This paper seeks to address these issues.

This paper describes the results of research into the characteristics of “high performance organizations” (HPOs) and the role of bonuses and reward systems in creating and maintaining HPOs.

The research results show that use of bonuses or implementation of certain types of reward systems have neither a positive nor a negative effect on organizational performance. This may be explained by the fact that reward systems are a hygiene factor for an organization. If an organization does not have an appropriate reward system (whether or not including bonuses), it will run into trouble with its employees and have difficulty improving its performance. If it does – a situation which employees expect and consider to be normal – it can start working on becoming an HPO.

The results of this study further the discussion about the role of bonuses.

The purpose of this paper is to explore the application of total reward practices in small and medium-sized enterprises (SMEs) in the South-Eastern European (SEE) region and the reward elements positively affecting organisational performance.

The sample consists of 199 SMEs operating in SEE countries which are either under economic crisis or transition: Greece, Bulgaria, Romania, Albania, Kosovo and the Former Yugoslav Republic of Macedonia.

SMEs in the SEE region are implementing a total rewards model which is characterised by a weaker application of individual aspects and by a stronger application of transactional, relational and communal aspects. Within the communal aspects of the model, the study found three elements of the work environment that positively affect organisational performance; work-life balance, employee involvement voice mechanisms, and organisational culture supporting personal and professional development.

The study contributes to HR practice; the authors found that a better work environment is positively related to improved organisational performance in these SMEs. This means that in times of economic crisis or transition when HR budgets are limited such non-financial strategies can be a viable alternative to costly financial rewards to such organisations.

The study contributes to both theory and HR practice by shedding light on how employee rewards are affected in economies under crisis and transition, how SMEs can motivate their employees when faced with significant financial limitations, as well as explores which reward elements can lead to enhanced organisational performance in such organisations.

This article examines some of the recent innovations in rewarding employees arising from the changing needs of organisations in a competitive global economy. The necessity for reward strategy to be congruent with business objectives and the consequent movement towards greater flexibility and variability are considered together with the important and growing concept of broad‐banded basic pay systems. A case study is described of a multinational pharmaceutical company which has travelled down some of these routes, changing from a centralised and over‐rigid pay control system to one that more closely meets the requirement of the European marketplace.

What's the secret sauce of top business performance? Clearly, it's not just having a brilliant business strategy. It's also the successful execution of the strategy that counts. And execution requires that people understand the strategy, know how they fit in, commit to what they must do to add value to the strategy, and have the capability of making the strategy a reality.