How a little competition (and group bonuses) can motivate employees

Put co-workers on teams, set up a contest with meaningful rewards, and watch the productivity soar.

There’s nothing like a contest to turn coworkers into a team. At each of Kelly Automotive’s nine dealerships north of Boston, groups of sales, service, and call center employees compete against their counterparts at other sites to find buyers, set up appointments, and sell cars and trucks. Every e-mail, text, phone call, and face-to-face meeting with potential customers is tabulated. The team that racks up the best numbers gets lunches or suits and dress shirts from the company, as well as a group bonus.

“People love contests and everyone loves to win,” says Brian Heney, chief operating officer for the 53-year-old company, based in Danvers. “It’s good for employees, good for the brand, and great for our customers.”

Though teamwork culture is often associated with startups, a tighter labor market has prompted many employers to initiate or expand group rewards  — often in addition to individual incentives  —  in a bid to hold onto talented workers. Bill Kahn, professor of organizational behavior at Boston University’s Questrom School of Business, says the trend is also a response to changes brought on by technology and globalization, and the need to adapt to change and competition more quickly.

“Businesses are recognizing the powerful value of teams,” says Kahn. “In a complicated, ambiguous environment, you can no longer do ‘command and control.’ ”

Team rewards are most effective when goals are clearly defined, says Katie Busch, owner of HR Compensation in Boynton Beach, Florida. As in: “Guys, we need to get the product out the door and onto the floor by December. And if you can do that, there’ll be a team incentive.”

Systems & Technology Research, a Woburn firm that conducts research for the Pentagon and US intelligence agencies, typically deploys teams of engineers, researchers, data scientists, and mathematicians to tackle everything from cyber-defense to sensor development. When teams hit their targets, team leaders are responsible for divvying up bonus pools  —  sometimes dividing them equally among members, other times giving larger shares to those who went above and beyond.

“We want to reward people directly for the work that they did,” says Susan Woodmansee, vice president of engineering.

Teams of employees at BANKW Staffing’s recruitment agencies in Massachusetts and New Hampshire compete for rewards  —  including dinners, Celtics games, and casino trips  —  for enlisting new business, meeting revenue goals, or placing a set number of employees with clients. Customer feedback is also a factor.

“Recruiting is a very fast-paced intensive industry,” says managing partner Matt Nagler, “so we want to create an environment where our recruiters work together in teams, and we have incentives to reinforce that.”

At investment firm Edward Jones, which runs a large network of local branch offices, bonuses are typically shared by the financial adviser and office administrator, who work together to set up appointments and assure customer satisfaction.

“It really helps put us on the same page,” says financial adviser Marshall Tisdale, who works in the firm’s two-person office in Westford with office administrator Diana Keaney and determines what percentage of the bonus she gets. “We run this practice as if it was our own business,” he says.

Keaney, who calls herself “a bank teller times 10,” says the shared bonus makes her feel like a valued part of the team.

But compensation specialists warn of a “free rider” effect if some employees slack off. Dividing bonuses equally in such cases can cause resentment.

Many companies are careful to offer individual bonuses along with the group rewards to recognize the contributions of their most valuable employees.

“You have to do both to get the healthy organizational outcome you desire,” says Drew Marshall, founder of Primed Consulting in Philadelphia. “There’s a dynamic tension between the performance of individuals within the team.”

In an ideal situation, team members are jointly responsible for an outcome and put pressure on one another to succeed, says BU’s Kahn. Take the Celtics, for example. Each player is concerned about his own performance, Kahn said, but “as the players move up and down the court, they look at the score, which is the one measure that affects them all.”