Rewarding Teamwork

March 6, 2012

I believe every manager is a member of three teams:

  1. The people that report to that manager.  This is usually what someone means when they refer to “my team.”
  2. The external stakeholders in other departments they work with every day. For example, marketing is often considered part of the extended team for sales or development.
  3. Their peers in the same department or group.  For example, the leaders of each sales region.

Unfortunately, most people think of either 1 or 2 as their primary team, prioritizing their time and decisions accordingly.  They view their peers as competitors for fixed amounts of budget, headcount, and attention.  This attitude can create unintended silos within a department.

For the last few months, I’ve been thinking about how to encourage teamwork among peers.  As such, I was intrigued by a NY Times article about the British fast food chain Pret A Manger which hires, pays, and promotes employees on qualities like cheerfulness, not just pure performance.  This thinking isn’t unique to Pret: the McKinsey book ‘Beyond Performance’ suggests that an organization’s health is even more important than traditional measures of performance.

At Pret A Manger potential new hires must work a full day in a store, after which the employees vote on whether to keep them. While 90% are hired, those who are not are given £35 ($57) for the day’s work.  This is a less expensive alternative to the online shoe retailer Zappos which pays new employees up to $1000 to quit during the initial training period.

The incentives at Pret A Manger encourage existing employees to vet new hires carefully.  Bonuses are based on the performance of the entire team, not on an individual. When employees pass training milestones, they receive bonuses in the form of payment vouchers.  However, the employees are required to give the money to other employees who have helped them along the way.

While we all know incentives drive behavior, Pret reports that basing the rewards on attitudes over performance creates a more persistent culture of teamwork.  Employees are more likely to help each other and to focus on team performance rather than individual results.

For years I have been rewarding teams based on their shared outcomes to emphasize teamwork.  Frankly, I’ve seen mixed results.  Pret comes with an intriguing idea: reward the behaviors you want and performance will follow.

What do you think?