Team performance based compensation plans: implications for human resources and quality improvement from agency theory perspective

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.