Allied Signal faced many of these challenges when it began using account teams as the primary vehicle for driving organizational change. As described in the feature, Managing Teams: Allied Signal Pays for Team Performance, the combination of restructuring around teams and adopting incentive pay for team performance proved to be a powerful way to improve customer satisfaction.
To date research on how to best design performance-based pay for work teams is scarce, so it's difficult to propose solutions to these challenges However, case studies of the experiences in three companies Honeywell Defense Avionics, Solectron California, and XEL Communications provide several insights. For example, one solution to the challenges of changing team membership, multiple team memberships and interteam relationships is to fund the incentive pool at the business unit level. This reminds employees that ultimately, their team should strive to enhance the organization's performance. Another lesson suggested by the experiences of these compa that it's best to keep the pay system simple and make adjust- ments to it as the team and company gain more experience with this