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Project Team Rewards
Verification of the Results / Case Studies Analysis
Kerzner (2004) analysed two cases where introducing rewards for project managers
brought damage to the companies
. The companies both were weak matrix
. In the two cases, rewards were introduced for project managers but not for
line managers. From then on the relationship between line managers and project managers
started to worsen. This was noticeable because the line managers released significantly
less resources for the project work than before. The effect can be explained by the findings
of this thesis. The question if to reward depends among other factors on the external
reward situation
respectively the organisational structure. If the external project
environment (in this case the departments with their line managers) do not get rewards,
rewards for project work create a disequilibria. Hence, line managers feel treated unfairly
(see equity motivation theory). Cooper (2000) described a case with a contrary situation:
line work was rewarded, project work not. The effect was similar. Employees put their
effort into the line work and neglect their project work.
Parker et al. (2000) analysed the company ‘Great Plains Software’ according to its use
of rewards. The reward practice described in that case can be seen as excellent
. The
company has a projectized structure and performs projects usually in small teams with
about fifteen team members. Fluctuation of team members is low, and they often know
each other well. In addition, they are all used to teamwork. According to this thesis’
findings, group rewards were suitable in that situation. Actually, the company is mainly
using group rewards
. The project’s duration is usually between six and nine months and
two types of rewards are used. First, a financial incentive is given if the team meets the
In the described case, project managers have been rewarded. Although this thesis focuses on project team
rewards, it seems likely that a reward for the team members would have had a similar effect.
For an explanation of organisation structures see Figure 6 (p. 30)
According to Parker et al. (2000), the company has won several awards for motivating and retaining
employees as well as for excellent customer satisfaction. The turnover rate is 3.5% while the industry
average is around 20%. Sadly, no numbers about profitability of the company were provided. Therefore, it is
only known that the company has an excellent work environment and customer satisfaction but not on what
In addition, the top 10% performers get additional rewards. However, this does not depend on the project
characteristics. Rewarding individuals in groups generally tend to prevent the negative effects of group
rewards such as social loafing (compare Table 7, p. 19).
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