Why Isn’t Everyone On The Same Team? Check The Incentives

As I have grown older, one of the things I miss most is participation in team sports. I always enjoyed being part of something much bigger than myself. Any successes were so much more enjoyable since I had teammates to share the experience with. The many failures were also more palatable since we failed together.

To be honest, my experiences in the business world have rarely approached the feeling of teamwork and camaraderie that I enjoyed during youth sports. Most people in the workforce, in my view, are not team players because they never realized the exhilaration of a big win or championship while participating on a team during their youth. That inevitably carries over into their adult life where self is paramount in business, and the concept of team is dismissed as childish or naïve.

I did encounter a glaring exception many years ago. I was performing year-end accounting services for a company in the construction industry. It was a long-standing, moderately successful company, but saddled with “me-first” personnel which caused the company to underperform. Every year when I arrived, the accounting was only partially completed, the schedules I had asked for were either not prepared or were wrong, and bad attitudes among the employees abounded. I truly dreaded the first two years of the engagement.

Then something happened in year three. I went out to the client’s location and was immediately greeted, “Good to see you Shane. We have your office and materials all ready for you. Can we get you some coffee” Sure enough, the accounting was done accurately, my requested schedules were completed, and the same dreadful employees I had worked with before had suddenly been transformed. What happened? Who were these people? Had my client’s personnel been taken hostage to the mother ship and replaced by clones?

I soon learned that during the year, ownership had instituted a profit-sharing plan. No, this wasn’t your garden variety defined contribution, tax deferred profit-sharing plan. Those rarely motivate anyone other than ownership/top management. This one was done right. The plan stated that 50% of pre-tax earnings above 8% of sales would be paid to employees every quarter, in cash.

Once the first two quarters were completed and cash distributions made, the employees quickly realized that this was not some razzle-dazzle plan instituted solely for the benefit of ownership/top management. Ownership held a company-wide meeting each quarter, shared the numbers with full transparency, made the calculations, and distributed checks to employees. The plan was validated. Suddenly, it was a team. Each of the employees’ goals were aligned with ownership and with one another. The strategy worked.

This specific plan might not be effective in all businesses. However, you can see that creativity, transparency, and willingness to incentivize the rank and file employees can go a long way. Give employees something to come to work for each day other than just a pay check. You might create a rock solid team that can carry out the company’s mission more effectively than you ever dreamed possible.