Section FiveSimilarly, does it make sense for a company to
ask its HR and line management executives to
devote considerable valuable time and energy to
administering tightly coupled contingent pay for
performance compensation systems? Despite the
rhetoric, these systems probably do not
contribute much to the effectiveness of
organizations. Systems that differentiate only at
the extremes and payout on a variable ratio
schedule for out-standing performances are
effective—and far easier and less costly to
administer... suffice it to say that some of the
most successful companies in the world do not
have executive bonus or commission systems, for
example. They have thick team-based cultures..
. It appears that complex compensation schemes
may not only take a lot of time, they also do not
motivate and may actually be injurious to building
the very team-based culture companies are
aspiring to develop.^12