Post #3528676

2026-06-23 08:28 UTC

Organisational Dysfunction of the Day Pay and reward Context: The organisation has moved to agile, reorganised around product teams, and invested heavily in the transition. The teams have more autonomy, shared goals, and genuine collective accountability. The work feels different. Then the bonus cycle arrives. Individual targets are reviewed. Personal ratings are assigned. The payout is calculated per person based on their individual performance. Some team members did less visible work that was essential to the group. Others were more prominent but depended heavily on the rest. The bonus does not know the difference. Within a few weeks, the behaviour shifts. People start making sure their name is on the right things. The team dynamic that took a year to build quietly corrodes. The reward system has spoken, and it was louder than everything else. OST explains: Pay and reward systems are one of the most powerful structural signals in any organisation, and almost all of them are built on DP1 assumptions: individual performance ratings, bonuses tied to personal targets, pay bands linked to seniority and title. OST's support congruence principle is precise about this: the rest of the organisation, including how people are paid, must support the teams as they are designed. If the team is supposed to share accountability for collective outcomes but is rewarded individually, the reward system will win. It is a stronger structural signal than any value statement or team charter. The DP2 alternative is pay for skill rather than pay for position: people are compensated for the range of functions they can perform for the group, which incentivises learning and breadth of contribution rather than territory protection. It also removes the basis for individual ranking within the team, which in a genuinely self-managing group is not only unnecessary but structurally corrosive. The bonus did not break the team. The design of the bonus did. #OpenSystemsTheory #SocioTechnical #OrgDesign #leadership

Replies (1)

@trondhjort@hachyderm.io 2026-06-24 06:24

Organisational Dysfunction of the Day The learning organisation that doesn't learn Context: The organisation has committed to becoming a learning organisation. There are lunch-and-learns, communities of practice, knowledge-sharing sessions, and a learning management system with hundreds of courses. People are encouraged to spend time on development. A few do. Most do not have time, because the work does not stop. The knowledge shared in the sessions rarely changes how the work is done. The retrospectives identify the same issues quarter after quarter. The post-mortems produce action items that get deprioritised. The organisation talks about learning continuously. Its structure ensures it mostly does not. OST explains: Genuine organisational learning requires three things that DP1 systematically prevents: people must be able to set their own goals, receive accurate feedback on their work, and act on what they learn without waiting for approval from above. In DP1, goals come from outside the group, feedback travels up the hierarchy before it can be acted on, and changes to how work is done require sign-off from management. The result is that learning happens individually and occasionally, but rarely changes the system. DP2 is inherently a learning structure: self-managing groups set their own goals, own their feedback loops, and control how they adjust their work. Learning is not a programme they attend. It is what the structure produces continuously. The learning management system is not the problem. It is a symptom of an organisation trying to buy learning that its structure prevents. #OpenSystemsTheory #SocioTechnical #OrgDesign #leadership

Open ##3528675