Advantages and Disadvantages of Group Incentives

Advantages and Disadvantages of Group Incentives

Incentives are variable rewards granted to employees as per the variations in their performance. To succeed, an organization must attract and retain productive employees. Therefore, a business establishes competitive incentive plans to accomplish these objectives. Incentives are provided beside wages and salaries so that the level of motivation and job satisfaction can be enhanced. Incentive payments are quite substantial and paid regularly as wages and salaries.

Group incentives make a strong sense where employee’s tasks are interdependent and thus require a collective effort for the completion of such tasks. Especially, this system of incentive is useful in project teams where one worker’s contribution is almost impossible to reflect in measurable units. Under this plan, a productive plan is set as standard performance for a group of employees and the reward is provided by assessing the performance of the whole team.

Advantages of Group Incentives

Creating a group incentive plan can help foster relationships between staff members, encouraging them to find ways to work together in a collective environment in order to achieve group goals. The approach can build a stronger team, encourage brainstorming and create a vested sense of project ownership across the board.

  1. Group incentive is suitable for employees who perform interdependent and interrelated tasks.
  2. Group incentive enhances group work so that the jobs can be performed effectively.
  3. Group incentive helps to enhance team spirit at work.
  4. Group incentive encourages a sense of cooperation and responsibility.
  5. Group incentive facilitates on-the-job training as the group members have interest in getting new people trained as quickly as possible.
  6. Group incentive encourages employee participation in the group, job satisfaction and quality of work life at organization’s environment.

Disadvantages of Group Incentives

If team members perform at vastly different levels, creating a group incentive can set the stage for drama in the workplace, particularly if some staff members feel compelled to work harder than others to carry the workload. This can lead to resentment, infighting and even a hostile work environment.

  1. No reward is solely on individual’s own effort.
  2. Due to group/team focus, individual job performance will not be improved.
  3. A group incentive plan may be less effective as compared to an individual incentive plan because, under it, the individual does not see his/her effort leading to the award.
  4. Since overall performance depends on team effort the conflict and disagreement may be seen in the workplace among teammates.
  5. The problem of self-deception can occur.
  6. Usually, group members expect greater than average rewards, which lead to internal conflict within the team.


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