Key Performance Indicators (KPIs) are one of the reasons why today’s teams are still divided by inner competition among members. A monthly meeting with performance indicators can change a motivated employee into a person who is seeking for a new job. Having worked at a few companies in different industries I saw the same pattern – individual incentives rather than team rewards. My colleagues and I were evaluated by individual performance and motivated by financial and other benefits. My manager would publish a weekly list of our performances. This list showed who was the winner in a KPIs competition and who had to work harder, sometimes this event even turned into a public humiliation for those at the bottom of the list. Let’s explore in greater detail why this individual competition happens and what should you do to avoid backfires.
Individual KPIs – Low Team Performance
Awards for the top and punishment for the bottom negatively influence the overall performance of a team. This approach creates inner competition and prevents knowledge sharing, as everyone wants to stay a jump ahead on their colleagues in a KPIs race. Furthermore, a team loses a common sense of responsibility for a project’s success. Wondering what does it mean? Imagine a football game where a striker scored a goal and then sat on the bench for the rest of the game because he already did his job.
Building an effective team from scratch is easier than revamping already established principles, but even if you inherit an existing team there are ways to make it effective. Imagine that you started working as a project manager at a service company. Your team is designed for individual competitions among members and during each assignment, the team burns itself up. What steps do you need to take to challenge existing principles?
Evaluate teams as single performing units
Start by evaluating a team as a single performing unit. It will motivate each member to care about the final output and its quality, not only about individual areas of responsibility. This approach will promote knowledge sharing between members and peer pressure will regulate teamwork better than hierarchy. Many IT companies have already adopted this reward system and enjoy its benefits.
Think about a team as a living organism. You inherited a team with pre-established areas of member’s responsibility and your task is to unbound it. It works well in start-up companies where a member can have responsibilities ranging from managing a company to making coffee. This effect is called “citizenship behavior”, where employees are willing to go beyond their work functions and may bring outstanding team results. Perhaps it is more effective for the team if employees are free to undertake the tasks where they can add the most value in a project.
Managing a self-organized team may be challenging for those who do not want to delegate authority, but decentralization is key for building a highly effective team. The concept of organizations as decentralized adaptive systems was described by Frederic Laloux, former Associate Principal at McKinsey. He explains that the company’s elements can perform better if they are self-organized and change the relationships between themselves to adapt to changes in the environment. This approach was adapted by an American clothing company “Patagonia” and a French manufacturer of automotive appliances “FAVI”. Both companies operate in different countries and industries, but they have a similar culture of employee empowerment.
Remember our striker sitting on the bench? If you find yourself in this situation it may be time to think about your team as a single unit. Promote a cooperative environment in your team where employees are not driven by individual KPIs, but rather striking for a goal every single time.
Everything written here is a personal reflection and is by no means educational, financial or professional advice in any way.
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