Copyright TIGERS Success Series
Do team incentives result in producing quality products faster when a team approach is deployed?
I think so. And for those of you who have not read the book, TIGERS Among Us – Winning Business Team Cultures and Why They Thrive, the 4 leaders that were featured as case studies in the book think so, too.
Shelley DuBois gave us a another good example today in her article for CNN Money and Fortune Magazine, Why automakers are adopting pay for performance.
This is a good article and I believe demonstrates to Wall Street short term investors and leaders in the US workforce how to build improved employee engagement and product quality when complex processes – like building a car – result from a team effort.
I have seen time and time again why cross-functional team development efforts fail in companies because incentives were out of alignment with the product production system. Both product quality and workforce engagement suffered as a result. And for leaders who are taking kinks out of their systems now so that they can spring forward during the eventual economic turn around, looking at team incentives for team developed products makes sound sense.
However, what comes first? Does team understanding and norms development come first? Or, do incentives come first?
In the article, DuBois writes that over a century after Henry Ford built his first car that the assembly line model of product development is controversial because, “Car making, like other modern manufacturing processes, has become an integrated process where many different departments work together, much earlier than the final phase, to form a product. Car companies that want to provide an incentive for employees to produce more high-quality cars faster need to frame the work as a collective effort. One way to do this is to adopt a pay-for-performance model.”
I believe this applies to any product where many different hands touch it from assembly, to production, to marketing and sales. I can think of few instances that involve product development, manufacturing and sales where the deliverable is not the result of a collective effort.
The key, however, is to engage all the employees that touch the process to agree on the behaviors and process that will help them achieve work quality success and personal satisfaction before money is tossed at the issue.
Take for example, Costco. When we helped Costco establish gain-sharing in the 1990’s, we were looking at the loss to the company between costs and profits. Saving on costs resulted in more profits and cost savings cut across departments and divisions.
The first step in the test pool was engaging all the employees in a number of different warehouses to identify both behaviors and processes that would help them achieve success. For example, creating an easy to disseminate company training on how to lift properly provided a tool for the training system. Adopting commonly understood and employee encouraged team behaviors and shared accountability produced the employee buy-in and accountability required to achieve the goal.
If leaders in a self-insuring company like Costco, want to reduce accidents and employee absences, developing a proper incentive model with high employee understanding and buy-in will result in achieving the goal faster. This is because employees understand their involvement and how their actions and work relationships encourage or hamper the goal.
For self-insuring companies it can be as simple as an employee saying, “Hey wait a sec. Let me help you lift that.” In this instance the employee isn’t being a hero or meddling in another employee’s work. Instead the employee is engaged in the process, fully understanding how a simple empathetic effort can save thousands of dollars on back injury health claims, therefore, producing more profits to share.
I agree that one way to get multiple departments and the hands that touch the various aspects of a goal to collaborate – as in the fast development of a new quality car or savings on expenses – is to put a team incentive on it. But, I think there is a step before tossing money into a team incentive. This step is to engage everyone in developing the ground rules for creating a trustworthy, interdependent, genuineness enhancing, empathetic, appropriate risk taking and successful process.
This sparks employee engagement and accountability for the outcomes. It is a process that team leaders and company trainers can implement very easily when they use a system that facilitates it like the TIGERS Team Wheel™ team building exercise. In our previous posts we have described TIGERS as an acronym that stands for trust, interdependence, genuineness, empathy, risk and success.
The TIGERS Team Wheel™ is a team building activity that is game-like in nature and quickly gets at the issues that diminish team engagement. This tool also helps leaders produce a team empowered agreement so that employees are excited about how their roles, goals and successful working relationships converge to produce more company profit.
Then the incentive makes perfect sense as a reward for achieving the right collaborative team behaviors and actions that drive quality products into the market place faster.