I wonder if the following would work: company is divided into small to mid-sized teams. Say 5 to 30 people. Each team has to do something that results in profit. More profit from a team implies larger raises and bonuses for that team. There's a catch: if the company as a whole doesn't meet a certain profit goal then no teams receive raises or bonuses. It seems like this structure encourages teammates to cooperate with each other in the "we all succeed or fail together" theme. Also there's some incentive for team A to ensure team B is successful since team B's failure could bring the entire company down. The psychological implications could be interesting. Seems like there's a snowball effect: n successful teams => team n+1 will probably be successful. This effect probably works in reverse: n lousy teams could imply that team n+1 is highly unlikely to succeed.
I'm no management guru but I can see a couple of major problems:
(1) Some teams are necessary but won't make a direct profit, eg. internal IT, customer service.
(2) It could encourage a team to make a profit at the expense of another team; eg. the Office team might release a buggy product quickly (maximizing their profit by not testing it) knowing that the customer service team are the ones who'll suffer a loss supporting it.
Good points. Some creativity is in order when it comes to structuring the teams. For example the Office team could be responsible for customer support themselves! I'm only half joking. Think about the incentive that creates for making an intuitive and easy-to-use product.
>>There's a catch: if the company as a whole doesn't meet a certain profit goal then no teams receive raises or bonuses.
No this will be a disaster, Expect severe attrition in such a company. No one wants to work and then not get paid, just because you missed the mark by a meager x%.
>>It seems like this structure encourages teammates to cooperate with each other in the "we all succeed or fail together" theme
Read this as, we all succeed or go and work elsewhere.
To be clear employees are still paid their salaries when the company doesn't meet its quota or mark. Just the bonuses and raises are held back. Either way I think you're right about high attrition rates.
