A guide to team incentive systems

Abstract The growing use of teams in the workplace has led to an increasing number of incentive systems designed to motivate team performance. The present paper reviews such incentive systems, including: team gainsharing/profit‐sharing incentive systems; team goal‐based incentive systems; team discretionary bonus systems; team skill incentive systems; team member skill incentive systems; team member goal‐based incentive systems; and team member merit incentive systems. Evidence regarding the effectiveness of each team incentive system is reviewed. Generally, two factors affect the usefulness of a given team incentive system: team interdependence (both within and between teams) and team type (i.e., full‐ or part‐time). Based upon these factors, guidelines for the implementation of each team incentive system are provided.