Individual performance is important, but a company is not formed from one individual. A company is a team and its strategic needs can be supported by group-oriented pay plans.

Profit sharing is one of the most used incentive systems. Money-wise it might not make a difference in a big company because the impact on profit from one individual is small. But in a small company it matters and in time, when most small companies will become partnerships, and the notion of employee will be history, this will represents the only form of compensation.

Employee Stock Ownership Plans (ESOPs) and Employee Stock Purchase Plans (ESPPs)
An ESOP allows employees to own stock in the company without having to purchase shares. An ESPP allows employees to use after-tax wages to purchase stock in their companies, usually at a discounted price.
Implementation of such incentive plans is not easy. There are taxes implications, private companies are required by law to purchase ESOP share from the employee that leaves the company, and so on.
But as motivational factor, ownership remains in the top of the list. For start-ups, especially in this period of economical crisis, it can also be used as partial replacement for money that constitutes the salary.

Gainsharing incentive schemes have usually as goals: improved productivity, quality performance, customer service, cost reductions, etc. It differs from profit sharing by the fact that is not related to the company’s performance.
The employees participate in the decision-making process and the gains obtained when reaching the goals are shared between the company and the employees. Gainsharing requires a team oriented management style and can lead improvements in performance as well as increased commitment to organizational goals.
Some of the most known schemes are: the Scanlon Plan, the Rucker plan, and Improshare.

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Cohesiveness is a characteristic of team that reflects no so much the unity of the group as it reflects the resistance to leave it.

The survival instinct, even suppressed by social norms, will still make you less efficient if you do not like your work environment and the people you work with (social loafing – next post).

A clue about the fact that a team member feels that he/she is part of the team is the fact that in conversation it is used “we” instead of “I”.

The forces that keep team members together are:

• Positive – rewards
• Negative – what you loose if you leave

Factors that influence cohesiveness are:

• Similarity of team members in gender, age, values, etc.
• Success and the professionalism of every employee – when tasks are accomplished things go better for the team
• External threats of competition – people as specie react well to danger of any kind and work better together in putting out the fire.

The visible results of a high cohesiveness in a team are an increase motivation for participating in the team activities but also the possibility to better impose on the “black sheep” the social norms agreed by the team. With conformity comes less individuality and more success as a team.

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I have learned in time to treat a company as a living organism that is always sick. Rarely did I see a company that was healthy. And once in a blue moon I got a chance to exchange a few words with it.

Why? Because it was moving so fast!

A healthy business organizational structure accepts only change and business innovation as normality. This acceptance is called organizational development.

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