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Team based pay for performance reinforce team planning and problem solving, and help ensure collaboration. But it is also quite clear that Group-based plans also have their own potential drawbacks.
These are the some reason that has unhealthy effect on the spirit of team work and cooperation.
One is that most employees prefer that their pay of performance be based on individual rather than Group performance. A worker’s pay may not be proportionate to his or her personal effort. This may demotivate top workers.
individuals may feel their personal self-worth is diminished
Free riding effect’ One individual puts in less effort than others but shares equally in team rewards, or , there is a concern that co-workers will not contribute equally to Group performance, but nevertheless will receive the same level of rewards. This will also create a negative effect on the spirit of team.
Intergroup social problems-pressure to limit performance for example, team members are afraid one individual may make the others look bad.
Individual team members may perceive that “their” efforts contribute little to team success or to the attainment of the incentive bonus.
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