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Teams, Individuals and Rewards

Organizations hope for teamwork, but reward individual behavior. They hope for cooperation, but reward competition. What folly!

Thirty years ago, Steven Kerr, now the chief learning officer for Goldman Sachs, wrote a short but brilliant article in the Academy of Management Journal: "On the folly of rewarding A, while hoping for B." The title summarizes succinctly the obvious point of Kerr's article. If you want B, reward B, not A. And, if you do reward A, don't be surprised that you get A and don't get B.

Yet, it is amazing how often managers in the private, nonprofit, and public sectors ignore this rather obvious management lesson. Indeed, who would even have thought an article was necessary?

For example, in this era of teams -- when every organization avows that it needs teams, that it relies on teams, that it is building teams -- Kerr's wisdom is frequently ignored. Organizations hope for teamwork, but reward individual behavior. They hope for cooperation, but reward competition. What folly!

So, why do we reward individual behavior? Perhaps, it is because we have been rewarded as individuals since we entered grade school. As students, we were rewarded for competing. Cooperation was punished; it was called cheating. Schools, from first grade through college and beyond, reward individuals with grades. Any instructor who gives students a team assignment and announces that every member of the team will get the same grade can expect a lot of complaints.

Moreover, the United States is perhaps the most individualistic society on earth. We respect the individual, not the collective. We value individual initiative, individual brilliance and individual performance. Little wonder that the key institutions in American society -- schools, businesses, governments -- all reward individual accomplishment.

Unfortunately, most true accomplishments are achieved by teams, not individuals. Even in the research lab, where presumably individual genius is the key to success, teams, not individuals, produce most breakthroughs. Scientific papers have multiple authors; Nobel prizes are shared.

Moreover, significant achievements -- those worth rewarding -- are more than the sum of individual achievements. It was not simply that the individuals each made a contribution to the final product; rather, it is that the joint work and active cooperation among the individuals was key to the achievement. Indeed, on a true team it is impossible to separate out individual contributions. No HR expert can determine that one individual's contribution was 13 percent while another's was 22.5 percent.

Yet, what happens in most organizations that require cooperation and teamwork to achieve their purposes? Answer: They still reward individuals. While, as always, hoping for teamwork.

Numerous business firms have, of course, been employing team rewards. Business magazines include stories not only about heroic (or demonic) CEOs, but also about high-achieving teams. And, many businesses go out of their way to recognize and reward teams. Some firms give everyone a bonus if the business makes its target for sales or earnings. Other firms give teams specific performance targets and, whenever a team makes its performance target, are careful to recognize not just the team leader but the contributions of every member of team.

Obviously, no legislature in the U.S. is apt to authorize team bonuses. But team recognition is inexpensive. It is not regulated; recognition requires no permission from the legislature or overhead agencies. Nor is it circumscribed; there exists no limit on the number of teams or the number of team members who can be recognized. No public agency has a recognition budget.

Nevertheless, rewarding teams with recognition is not simple. First, agency leadership needs to determine what and who is to be rewarded. What, in general, does the agency need to accomplish this year? What specific performance targets does it need to achieve this year? What team should be assigned to each target? And, who is on each team? These choices are rarely obvious.

Moreover, what should be the nature of the recognition? For some small but important achievements, a simple visit to a team meeting to offer a personal thank-you may be very effective. For other achievements, a team picture in the agency's monthly newsletter -- or even in the local newspaper -- may be appropriate. In other circumstances, the agency's leadership may need to throw a big party. The magnitude of the recognition should be proportional to the target achieved.

Still, it is not only the big achievements that warrant recognition. While planning the big party, the agency's leaders ought not to forget the need to engage in the smaller, simpler, and more frequent expressions of gratitude. Every time a team hits its big performance target, it has done so only after a series of small wins. And leadership's recognition of each of these small victories not only rewards the teamwork that produced them but also reminds the team's members of their bigger, ultimate target.

Most public executives hope for teamwork. While they are doing this hoping, they shouldn't forget to also engage in a little rewarding.

Robert D. Behn is a GOVERNING contributor.
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