Team performance based compensation plans: implications for human resources and quality improvement from agency theory perspective Mesut Akdere* University of Wisconsin-Milwaukee, Department of Administrative Leadership, 641 Enderis Hall, 2400 E. Hartford Ave., Milwaukee, WI 53211, USA Fax: 414 229-5300 E-mail: firstname.lastname@example.org *Corresponding author
University of Sakarya, Department of Labor Economics and Industrial Relations, Esentepe Kampusu, 54100, Sakarya, Turkiye Fax: + 90.264-346-0332 E-mail: email@example.com Abstract: Today, the global economy is undergoing some dramatic changes in the organisation of the workplace and the manner in which employees are paid. The growing use of teams in the workplace has led to an increasing number of incentive systems designed to motivate and increase team performance. As a field aiming to develop and unleash human expertise for the purposes of improving performance, Human Resources heavily utilises the workteam method as one of its practice tools. Agency theory further provides a dimension in understanding the dynamics of team-based compensation. Keywords: team compensation plans; human resources; quality improvement; agency theory. Reference to this paper should be made as follows: Akdere, M. and Yilmaz, T. (2006) ‘Team performance based compensation plans: implications for human resources and quality improvement from agency theory perspective’, Int. J. Human Resources Development and Management, Vol. 6, No. 1, pp.77–91. Biographical notes: Mesut Akdere received his PhD in Human Resource Development with a doctoral minor in Human Resources and Industrial Relations from the University of Minnesota. Currently, he is an Assistant Professor at the Department of Administrative Leadership at the University of Wisconsin-Milwaukee. His research focuses on human resources, quality management, agency theory, and implications of human resources in healthcare and educational settings. He has published several papers in training and development, human resources, and action research journals as well as numerous research conference proceedings. He teaches graduate courses in human resource development, human resource management, training and development, organisation development, strategic planning, and leadership and diversity in multicultural organisations.
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M. Akdere and T. Yilmaz
Tuncay Yilmaz is an Assistant Professor in the Department of Labor Economics and Industrial Relations at Sakarya University, Turkey. His research focuses on human resources, performance improvement, compensation, industrial and organisational psychology. He published several papers in compensation, industrial relations, and human resources journals and research conference proceedings.
The globalisation of world economies forced the business world to continuously improve the qualities of their products and services requiring time efficiency, strategic management, and effective resource utilisation. This increasing trend of change in the workplace is further forcing organisations to restructure the way they conduct business to become more autonomous in decision making and to reduce the level of staffing at the administrative and management levels. In today’s economies, due to the changes in organisational structures of companies, the ways employees are compensated and the methods used to determine employee compensation are being redesigned. As a result, the formation of multi-functional workteams with increased autonomy in decision making to achieve both team and organisational goals has been commonly used in the workplace. Nevertheless, getting all employees engaged in the pursuit of organisational goals – as individuals, as part of small workteams, or as broader organisational units – requires action and consistent follow-through by...