By Ahmed Sharawy
Ahmed Sharawy outlines the critical factors that management consider in structuring teams
Teamwork offers various benefits to organizations and their employees. Teams of people with distinct areas of expertise and levels of experience complete different individual tasks to meet their organisation’s objectives. By working in teams, people build their practical experiences, push the frontiers of their knowledge and develop new skills.
Communication and co-operation are keys to teamwork success. Hence, effective and efficient teams’ structures are flexible and less hierarchical and all employees participate in the decision making process. Management spends a long time to structure effective teams, based on their understanding of the work environment interdependence between teams’ inputs and outputs.
In this article, I’ll simplify the critical factors that management consider in structuring teams and setting their compensation schemes to align organisation’s objectives with exogenous influences.
There are four basic types of interdependences between teams’ inputs and outputs - Pooled, Sequential, Reciprocal and Networked Intensive. They vary according to team members’ dependence on each other to complete their individual tasks and methods used to measure team performance.
Pooled teams are consistent with the classical definitions of groups. Sales teams are good examples for pooled structure groups, in which sales representatives don’t depend on each other to meet their individual sales targets, nevertheless the team’s performance is an aggregate of all the team members’ performance.
Sequential structure teams exhibit a different type of interdependence, which is clearly present in relay race teams. Runners depend on each other to complete their laps in the shortest time possible and the team’s performance is equal to the performance of the slowest runner – the weakest link.
The most common type of interdependence in teams is the reciprocal type. Marketing groups present a good example for this type. Members hold long frequent meetings to exchange information, develop their thoughts and come up with new ideas. They highly depend on each other’s contribution to increase products’ vitality indices and margins and leverage brand equity. Marketing teams’ performance is equal to the performance of the most innovative and creative member – the strongest link.
The last type of interdependence in teams is the networked intensive type. A good example for networked intensive teams is an orchestra, in which the instrument players are highly dependent on each other to play a piece and the performance of the orchestra is equal to the performance of each player’s level of output.
How can the types of interdependence between teams’ inputs and outputs influence teams compensation schemes? Understanding the team members’ dependence on each other and the methods of measuring team performance in each type makes the answer to this question simple.
It’s fair to structure the compensation system of pooled structure teams similar to individual-based jobs and base rewards on members’ individual achievement, which can be accurately determined. The compensation system of network intensive teams is based on the teams’ effort and performance, because the work and skill of a world class pianist will never be fairly recognised in the noise of the world’s worst orchestra.
Success of sequential and reciprocal structure teams can be attributed to both individual and team efforts and the contribution of each depends on the job, which brings an element of subjectivity to designing these teams’ compensation schemes. Experienced managers work hard to design reward systems that balance cooperation in teams and competition between their members.
In a nutshell, if you’re a top performer in an average performing sales group you’re likely to realize more gain than a top performer in an average performing marketing team, where part of your reward depends on the team’s effectiveness. Management’s success is measured by their capability to structure teams and compensation systems that best serves their organisations’ interest.
Hence, before deciding that changing your current employer is rewarding, you might want to consider the effective team structure and compensation system for your function, because it’s less likely to be different in successful organisations.