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ACCA Applied Knowledge · Business and Technology · Motivating individuals and teams

A company pays its sales staff a basic salary plus a commission based on individual sales. A manager notices that staff now refuse to help colleagues or share leads. Which is the most likely problem with this reward system?

The likely problem is that individual commission rewards personal results only, so staff compete rather than cooperate and stop sharing leads. Reward schemes that pay for individual output can damage teamwork. Introducing a team-based element to the bonus can balance individual drive with collaboration.

  1. AIndividual incentive pay can undermine teamwork and cooperationCorrect
  2. BCommission is a hygiene factor and so cannot motivate anyone
  3. CBasic salary is always demotivating when paired with commission
  4. DCommission payments breach the psychological contract by law

Explanation

Rewards tied to individual output encourage people to focus on their own results at the expense of colleagues. A team-based or mixed bonus can reduce this. The claim that commission cannot motivate is wrong, because it clearly influences behaviour here, and there is no legal breach of the psychological contract.

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