Managing team performance: saying and paying

Purpose – In a turbulent economic climate, characterised by pressures to improve productivity and reduce costs, performance management has a more central role in helping to ensure competitive advantage. A focus on teamwork has become an almost universal feature of performance management in modern organizations. It is essential that messages concerning teamwork and rewards are clear and seen to be fair if they are to bring about commitment to discretionary effort, which is increasingly a key feature in gaining competitive advantage. The purpose of this paper is to focus on whether employee perceptions of the fairness of performance management systems have an impact on the effectiveness of team performance and discretionary effort. Design/methodology/approach – This paper uses the concepts of equity and motivation to explore the outcomes, procedures and implementation of teamwork in contemporary organizations. It draws on a range of theoretical frameworks from both philosophy and social science, examines current practices and experiences and considers future trends. Empirical research includes a ten‐year study of practising managers and also ethnography, questionnaires and interviews in two large manufacturing and service organizations. Findings – Investigations show that the espoused theory of organizations concerning the need for teamwork is often at odds with their theory in use. This frequently creates both actual and perceived injustice in organizations and a tension between managing performance and encouraging engagement, which is dependent on perceptions of fairness. Practical implications – The paper shows that organizations are sending out mixed messages that are causing tensions which may affect productivity. Originality/value – This research opens a debate that seeks to assess the contribution of teamwork to the achievement of an organization's goals and how this may be applied in the practice of performance management.