Success of any organisation is woven around its workforce and their team effort. “When a team outgrows individual performance and learns team confidence, excellence becomes a reality” - Joe Paterno. So it is the task of the management to discover new ways and means of strengthening team effort for its wealth maximisation. Team compensation is one such method used to augment the team effort on an ongoing basis.

The first step involved is identifying and analysing the organisational culture. The company management must acknowledge the role played by the team in the company’s success. Team support is a pre-requisite for the introduction of the team compensation plan within the organisation. The team must be educated and informed of the way the system works, and its benefits to the employees, personally and professionally. They should be confident of the success of the system if it is to be effective.

On the approval for the team compensation system within the organisation the company must chalk out the plan for measuring and disbursing the benefits. The teams are generally divided on the basis of projects, the process, etc. The limitations of the work involved and the criticality of the project are to be taken into account while determining the team compensation scheme. The salary of the individuals must be clearly demarcated specifying the amount of fixed pay and the variable pay based on the team’s contribution to the company’s profitability.

Team compensation induces the team to reduce the costs of its operation and improve its performance. The operational efficiency is improved with the team coming with new innovative techniques for enhancing the quality and quantity of its products. Reduction of the operating costs becomes the need of the hour. Optimal utilisation in the use of office stationery to the materials needed for the actual production is strictly adhered to. The scope for better communications between the team and inter departments can be visualised as the more the team’s contribution to the profitability, the better they are paid.

Team compensation system is beneficial to the company as this technique automatically keeps check on the cost of operations without compromising the quality of the products and services delivered. This scheme has the advantage of retaining people within the organisation. As it is an ongoing process, the ability to supply excellence in its products through the adoption of innovative techniques attracts customers to the company on a continuous basis. The goodwill enjoyed by the company and the constant increase in its wealth draws more investors to the company, making it easier to spread its area of operations.

Wipro Ltd has a performance pay system which is directly linked to its quarterly performance, called QPLC or the Quarterly Performance Linked Compensation. This portion of the variable pay is linked to the team’s contribution to the overall profitability of the concern.

Team effort is inevitable for a business entity to be a market leader. As John Wheeler has stated, “if you don’t kick things around with people, you are out of it. Nobody, I always say, can be anybody without somebody being around".