Introduction of team assembly line approach to replace individual assembly line approach is eventually expected to improve overall productivity. The change from the individual approach to the team approach will likely result in the following:
* Skill enhancement of workers to cover inadequacies or absence of a team member
* Initial attrition of workers who may prefer the individual system
* Increased worker involvement and accountability due to greater team identity and peer pressure
The skill enhancement and initial attrition is expected to reduce specialization and hence overall productivity, however, this reduction will be compensated by improvement in productivity because of higher intrinsic motivation of the workers. Collective responsibility will induce peer pressure and greater team identity, thereby improving worker involvement and accountability. The ability to see a final product will lead to increased understanding of how individual contribution affects the outcome. This increased understanding is vital for encouraging innovation, which can be quickly replicated across all teams to further boost productivity.
The productivity will be further improved if the augmented intrinsic motivation is supported with appropriate pay-for-performance incentive scheme that improves extrinsic motivation. The key considerations for Individual pay-for-performance and Team pay-for-performance in this context are:
* Individual pay-for-performance in isolation will in fact be counterproductive as it undermines the team effort concept.
* Team pay-for-performance in isolation may stifle innovation by providing no incentive for individual brilliance and negatively affect intrinsic motivation by encouraging free-riding
Choosing the right reward mechanism to positively influence extrinsic motivation is critical. Neither of the Individual or Team pay-for performance in isolation will be effective in this situation. Moreover, the change... [continues]
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