Monitoring and analyzing individual and team performance are of utmost importance for Human Resource Managers. One of the most challenging jobs of an HR Manager is determining what strategy of giving compensation to individuals lead to more production without affecting performance inside a team. Providing group compensation is a way of achieving the increase in productivity and improving the performance of team members individually. There is a considerable difference between compensation given to individuals and as a team.

Team based compensation plan is adapted by companies relying on performance as a group. In technology based companies several teams work together for achieving the final goals. The ability of the team is assessed by the extend up to which the operations are fast and accurate taking into consideration time and budget allocated for the project. The compensation for teams are measured in percentage of the total pay scale of individuals in the whole company.

In the case of individual compensation, the salaries are determined based on the individual performance. This can be based on the manly hours, commissions and reviews. The individual on the team is given compensation based on the performance he delivers to the team handling the project. Mostly non-technical positions are paid according to the individual performance which is not directly related to the team performance.

In the case of team performance, based compensation system individuals work more productively for achieving results as a group. When a team member is waiting for the other to finish the work to continue the tasks team-based project management suggests such compensation plans. Information sharing is done more freely in team-based compensation adapted industries. In the case of high achievement employees, individual compensation plans work well to meet the needs of the organization. This kind of compensation plan also helps in motivating individual members for performing well to get higher compensation.