Team-based employee remuneration

Purpose - The purpose of this paper is to relate the balanced scorecard (BSC) to strategy and teams. Design/methodology/approach - This paper proposes deriving performance targets and weights using a multiparty collaborative decision model that can be integrated into team-based bonus formulas. Findings - Cross-functional division managers face a more complex problem in setting goals for individual managers. The proposed approach is intended to develop such goals and link them for team-based incentives. An example illustrates the application of the proposed BSC model and the team-based pay formula. Practical implications - The model can be used to determine group bonus. Originality/value - The paper has two objectives: to relate the BSC to the team setting with a participative flavor rather than with imposed targets and weights, and to develop a better way of relating behaviors and outcomes to the team’s and/or the organization’s goals. Integrating the strategies of various units adds a new dimension that differs from rationalizing the superior’s and the subordinate’s goals. The proposed model considers input from all value chain functional managers involved in implementing an organizational strategy. A methodology is provided to operationalize (Hope and Fraser, 2003) beyond the budgeting model principles.