How to Reward Your Stellar Team

You've been told that getting the most from your team depends on rewarding and recognizing them collectively. But it's tough to do that, especially when most management systems are so focused on individual performance, undermining the very teamwork you're hoping to encourage. Luckily, you don't have to overhaul your company's evaluation process or pay structure. As a team manager, you can support the right behaviors with things that are in your control.

What Experts Say

A few decades ago, companies were struggling with how to measure and reward individual performance. But in their quest do so, many overreached, says Michael Mankins, a partner at Bain & Company and coauthor of Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization. "The pendulum has swung too far, and now those measures are getting in the way of forming good teams," he explains. At the same time, compensating people for collaboration can be tricky, says Deborah Ancona, a professor at MIT Sloan School of Management and coauthor of X-Teams: How to Build Teams That Lead, Innovate, and Succeed. "The boundaries are often blurry and people work on multiple teams at the same time, making it hard for the manager." Still, both she and Mankins agree, it's worth the effort to get it right. "Rewarding a team dramatically improves not only the team performance but also the individual's experience," says Mankins. Here's how to do it effectively.

Set clear objectives

Team members have to understand and agree on what success looks like. "You need to have some way of assessing the group's performance — a common set of objectives or aspirations," says Mankins. He advises bringing everyone together to discuss goals and metrics. Have them answer the question: What would it take for us to give ourselves an A? "Having this sort of dialogue can be motivational and lays the groundwork for collaboration in an objective way," he says.

Check in on progress

Once the team knows what it's supposed to do and how the work will be evaluated, check in regularly. Pose questions that help the group assess its progress: How are we performing as a team? What obstacles can we remove? You can have this conversation in a meeting or do it anonymously. "Use a service like SurveyMonkey and ask team members to give themselves a collective grade. If everybody agrees that it has been a C week for the team, then you can discuss how to improve," Mankins says. "If you give yourselves an A, it's something worth celebrating."

Use the full arsenal of rewards

Most managers don't have the power to change how salaries or bonuses are handled at their organizations. If you do, be sure to tie a portion of the discretionary compensation to team or unit performance — the bigger the percentage the better. But if you don't control the purse strings, don't fret. There are lots of non-monetary rewards at your disposal. "Think beyond team dinners and social events. Those are just table stakes," says Mankins. Ancona has studied hospitals where administrators put pictures of groups that have drastically lowered infection rates on prominent display to recognize them for a job well done. You can also give your team exposure to senior leaders. "Teams like to be seen as part of a project that contributes at a high level," Ancona says.

Get to know your team

Of course rewards are only motivating if you give the team something it wants. This can be challenging because what makes one person feel appreciated may have no effect on another. Spend the time to get to know your team members and look for things they all value. If you're at a loss, ask them for input.

Focus discussions on collective efforts

Ancona says that many companies include teamwork as a core competency in their leadership development models. As a manager, you can further encourage your people to collaborate by talking about them as a team, not as a set of individuals. Be sure to celebrate successes and discuss setbacks collectively. "The less you talk about individual contribution the better," says Mankins. Instead, praise the behaviors that contribute to the team's overall success such as chipping in on others' projects and giving candid peer feedback.

Evaluate team performance

In addition to completing individual performance reviews, consider conducting a team review as well. Mankins says that companies like Apple and Google have made this part of their formal processes, but you can do it on your own too. Every six months or so, take a close look at the group's progress, noting its accomplishments, where it has succeeded, and how it can further develop. Don't mention individuals in this appraisal but focus on what the team has done — and can do — together.

Principles to Remember

Do:

• Agree on what success looks like
• Bring the group together to discuss progress against goals and how to improve
• Consider doing a formal evaluation of the team

Don't:

• Only think of rewards as money — there are lots of non-monetary perks that people appreciate
• Focus on individual performance — emphasize the team's accomplishments
• Reward your team with something they don't collectively value

Case study#1: Set a team purpose and measure against it

To help launch PfizerWorks, a productivity initiative that allows employees to outsource boring parts of their jobs, Jordan Cohen put together a small team including his two direct reports, Tanya and Seth, and started by devising a collective purpose. Following the advice of David Collis and Michael Rukstad in "Can You Say What Your Strategy Is?" the group worked together to come up with a strategy statement of no more than 35 words. "These were the words we were going to live by and we struggled over every clause," he says. Next, they developed metrics tied directly to their strategy. "We had measures for inputs, outputs, and customer satisfaction, all of which we agreed to," he says. Meeting those goals was a reward in itself because team members could see how their actions contributed. "It was a source of great pride. It made them feel like they could win everyday," he says. 

Jordan also found ways to make sure his team members were publicly recognized for their work. When PfizerWorks launched, he stopped going to meetings with senior leaders and let Tanya and Seth handle them instead. They became the face of the program. At a meeting with Gary Hamel, just before the famed management thinker was about to give a speech referencing PfizerWorks at the World Business Forum, Jordan asked if he'd be willing to mention the team by name. He did, leaving Tanya and Seth "somewhere between paralyzed and over the moon."

Case study #2: Let them improve their skills

When Christopher Lind worked at a software company, he led a team of eight people who were responsible for training the company's sales force. Most of them had been with the company for a while, but many didn't have formal skills in instructional technology and design. Still, "I was fortunate that everyone on the team had a strong desire to learn," Christopher says. "They wanted to grow their skillset and familiarize themselves with new technology."

The team made great progress, exceeding every goal Christopher set and then asking for new ones, so when it came time to reward them as a group, more advanced training seemed to be an obvious choice. He purchased a multi-license agreement to instructional design software. "I had spent enough time with my team to know they were eager to expand their experience and technical abilities," he explains. "I knew it could lead to them moving on to more senior jobs," he says. But "I ultimately decided that providing them with a valuable development opportunity outweighed that risk." In fact, he hoped it would give them a reason to stay. And he was right. Several team members told him that his investment, of both money and time, made them feel valued. It also gave the team something extra to work on together.

Harvard Business Review