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BSMH 3043 REMUNIRATION AND REWARDS MANAGEMENT

SECOND SEMESTER SESSION 2016/2017 (A162)

ASSIGNMENT 2: TEAM BASED INCENTIVE

Submitted to:

DR. JOHANIM BINTI JOHARI

Prepared by:

NO. MATRIC NO. NAME


1 232463 NOOR HANISAH BINTI AHMAD
2 232602 UMMI NADIAH BINTI YUSNI
3 238529 NUR SYAHIRAH BINTI PANUT
4 238704 NURUL SHAZALIANA BINTI ADNAN
5 239093 NURUL NADIAH BINTI MUHAMMAD YUSOFF KHIRI

Submitted date
13th MARCH 2017

SCHOOL OF BUSINESS MANAGEMENT


UUM COLLEGE OF BUSINESS
UNIVERSITI UTARA MALAYSIA
BSMH 3043
REMUNIRATION AND REWARDS MANAGEMENT

1.0 Overview
1.1 Article

According to the Adrian Lim (2016), transport operator Singapore Mass Rapid
Transit (SMRT) are giving a bigger portion of bonuses to their staff to ensure the
service run smoothly using a team-based incentive system. For example, bus drivers
and operation staff at depots will be evaluated as a team and will have key performance
indicators (KPIs) such as running their services on schedule and meeting the safety
standards. According to the Gerard Koh, the vice-president of SMRT for human
resources, the employees have to work together as a team. The purpose of the action is
to make sure that the service will drive better for the customer. Mr. Koh said that 70
percent of staff bonuses will be paid according to operational KPIs, and it will increase
to 80 percent with the team-based incentives. These may be paid on top of the two to
three months of annual bonuses that SMRT staff get.

1.2 Team Based Incentive

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2.0 The Analysis and Assessment of the Issue

The transport operator SMRT is took a step to develop the new remuneration system for
their workers. Base on the article, this action is need to do for achieving their aims that to get
their staff to work as a team to ensure trains and buses system run smoothly. In order to make
the goals achievable, they were plan to using a team-based incentive system.
Base on the journal by Hoffman and Rogelberg (1998), there are seven major categories of
the team base incentives system. The categories are team profit-sharing or gain sharing, team
goal-based incentives systems, team discretionary bonus system, team skill incentives systems,
team member skill incentives system, team member goal incentive system and lastly team
member merit incentives system.
The SMRT’s company they stated that earlier, seventy percents of the staff bonuses is
based on their operational key performance indicators. Now, they decided to upgrade new
remuneration system that is pay based on the team based incentives. The vice president of
human resources of this company believe that with the new structure of remuneration, the staff
bonuses will increased about eighty percents than earlier only seventy percents.
The new system that will implement by this company shows the team base incentive base
on team goal based incentive systems, team skill incentives systems and team member skill
incentive systems. For example, there are different group of workers that work for SMRT that
is including bus drivers, operator staff, maintenance line managers, maintenance crews and so
on. For all this worker, they evaluate base on their skills and performance indicators in each
job so that it will reflect the workers job performance as well as their pay. The vice president
of human resources in this company also indicate that a worker who is works under rolling
stock maintenance crews will be evaluated base on their skills on how reliable trains are in
operation as their team need to make sure the trains are well serviced. Furthermore, the bus
drivers and operation staff at depots also evaluated base on their performance on delivering the
service such as running bus services on schedule and meeting safety standards. This bus drivers
and operation staff will be evaluated as a team and they have their own performance indicators
that will justified whether they will get their bonuses. Here is the table to show the workers at
SMRT task and how they will be evaluated.

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Table1: The example of SMRT workers task and performance evaluation for pay system.

Jobs Task Task evaluation for Descriptions of the


performance appraisal task evaluation
Rolling stock The team need to  Keeping all the Their ability or skills
maintenance keeping all the trains trains well in handling the
crews. well serviced and in serviced. maintenance jobs as
good condition. well as to make sure
the trains are reliable
in operation.
Bus drivers and They need to  Time, they arrive 1. Responsibility of
operation staff. running bus on at workplace. the workers to arrive
schedule.  The accurate at workplace on time
time bus arrives to ensure the work
at one place to system not over
another. schedule.
 Bus driver skills 2. This team need to
in handling the cooperate together to
transportation. make sure they
 Accident and follow the bus
regulations schedule.
records of the 3. The driver had
workers. knowledge on
handling the bus and
follows all the road
regulations as well as
they know the safety
standards when
handling the
transportations.

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2.1 Category of Team – Based Incentives


From what have stated above, the category of team base incentives that we can
choose are team goal base incentives, team skill incentives, team member skill incentives
and team member goal incentives system.
2.1.1 The Effectiveness of Team Goal Incentives System
Base on the table above showed how the workers do their jobs and what
will be evaluated in order to give bonuses base on the team performances. For
instance, the bus drivers have their own key performance indicators (KPIs) when
they running the operations. This performances evaluation reflect to team goal
based incentive systems as they have their own target or goals.
The team goal incentives system more effectives when they have their own
teams system targets. It is also most appropriate to be implemented for full time
teams. Moreover, the team should have predetermined targets and clearly specified
in their work task. However, this system is less appropriate to be implemented for
part time teams because it will result more on individual task or more emphasize
on team members individual tasks. The most important is that when distribute
rewards among team members. All team members must receive equal reward
distribution and fairness is important as team member tasks become more
independent.
2.1.2 The Effectiveness of Team and Team Members Skill Incentives System
The team skill incentive is base on the skill that the employees have master
and be evaluated by their manager. This system is more focus on team skills not the
team outcomes. The team will receives reward base on an acquired knowledge and
skills of job that determined by supervisor and determined. Next, team member
skill incentives rewarded base on acquiring team related skill that base on
evaluations provided by others team members so the workers will learn the task
from others members. Thus, both team skill and team member skill incentives are
effective in improving the team performance base on every individual team member
contribution towards effectives or ineffective team process.
2.1.3 The effectiveness of Team Member Goal Base Incentives System

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This system is quite different from team goals incentives because the
members are rewarded when they are achieving their individual goals. The goals
set are must be conjunction between team members and supervisor desire.
Furthermore, the system also effective for both full time and part time teams. The
reward that will given by organization also differential base on members
contribution on the task.

4.0 Implication of Team-Based Incentive

4.1 Advantages of team-based incentive


4.1.1 Improved work system

As the SMRT want the bus drivers and operation staff at depots be evaluated
as a team, and there is a certain criteria that they should achieve such as running
bus services on schedule and meeting safety standards. Thus, the employees should
work in a team to achieve the Key Performance Indicator (KPI). If the KPI is
achieve, then they will get a reward. So, for surely they will work hard to do the
job and indirectly they will improved their work system. Teamwork is such a
crucial thing in any job. Therefore, the reward that will pay based on teamwork,
will affect their work performance. As the SMRT vice-president said, they have to
work collectively as a team if they want the reward. If not, they maybe get a low in
paid. So, employee can be more driven and focus on their group goal and achieve
it to get the reward.

4.1.2 Help the company to achieve their objectives

If the employee work together as a team and achieve the KPI that given by
the company, then they automatically have achieved the company’s objective. For
example, in this case, SMRT has set up the KPI which are running bus services on
schedule and meeting safety standards. If the employees achieved the KPI, they
indirectly has achieved company’s objective which is to drive better services for
their customers. Among many benefits, team-based rewards can foster

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collaboration and teamwork, allow team goals to be clearly integrated with


organizational objectives and provide incentive for the whole team to improve
(Haines & Taggar, 2006). Hence, each team will make their own strategic plan in
order to achieve the objective and the reward will motivate them to work as a team.
Creating a teamwork and helping between employees is not an easy because
everyone have their own goals to be achieve. Having a good cooperation between
employees can create a harmonious workplace.

4.1.3 Fairness

Paying employees based on team will make each of the employees feel that
is fairness in paying distribution. The employees with the similar task and same
level of skill will be given a same amount of money as bonus if they achieve the
goals. For instance, in this case, from 70 per cent of staff bonuses is tied to KPI and
will be increased to 80 per cent with the team incentive. Hence, everyone will get
the same reward and everyone will feel fairly treated.

4.2 Disadvantages of team-based incentive

4.2.1 Difficult in defining team

As we know, building a team is not an easy thing. Everyone should


cooperate with each other and have a good communication. So that, they can work
together and achieve a goal. But, it not simple as that. Some team member may
have their own goal and self -actualization. They prefer to work alone and being
paid based on individual or performance based pay. Therefore, they will feel
unsatisfied with the job done and the bonus that they will get. Others than that,
others member maybe do not give cooperation while team try to achieve the
organization’s objectives. For example, one of team members do not follow the
safety standard such as drive the bus over than speed limit, so that it will not meet
the KPI that want they to apply the safety standard. So, by doing that it is hard for
a team to achieve the goals if one of them do not follow the standard of operation.

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4.2.2 Team’s conflict

It is possible in a team that one employees have a poor in work performance


and other team members will hide the problem. It is unfair for those who work hard
to plan strategic way to achieve the goals and the one who is free rider get the same
reward without perform well in their job. So, this also will lead to conflict in a team.
Other members will feel unsatisfied because everyone get the same amount of
bonus but one of them do not doing their job properly. It also can create an
unhealthy work condition for other members because of only they do the job well
but others do not give commitment toward their work because they think other
members can cover it for them and they still get the reward. Therefore, that is why
the team-based incentive is not the best motivator.

4 Solution or Strategies of The Issue


5 Conclusion

6 References

Lim, A. (2016, Febrary 18). The Straits Times. Retrieved from The Straits Times:
http://www.straitstimes.com/singapore/transport/smrt-to-link-more-of-staff-
bonus-to-bus-rail-ops

6 Appendices

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