Group vs. Individual Bonuses

Maybe some of you HR experts can answer something for me. This article points to a real problem – fighting amongst sales people. One of the challenges I have faced recently is how to incentivize employees for customer referrals. I think sales is everyone's job whether you are the company accountant, CEO, production line worker or whatever. If you believe in the product or service, you should want your company to succeed.

So, if you are paying bonuses for customer referrals, how do you handle conflicting information? It hasn't been a problem yet, but what if two different employees both claim to have referred someone and the client can't really remember who spoke with them first? Should the referral fee go to the one who spoke to the client first or the one who convinced them to buy? What I am really getting at is the deeper issue of team vs. individual bonuses. Is it better to reward individuals and take the risk of unhealthy infighting over commissions, or set top level goals and reward the whole team according to total performance? In the latter case, I wonder if they will work together more and encourage each other, or become free riders. I've also thought about multipart bonuses, but part of a good bonus plan is that it has to be simple to understand.

How to Keep Your Employees Happy Without Giving Them a Raise

I lean towards the team approach because ultimately I want everyone to figure out their strengths and do the tasks that best play to them. But employees seem to get much more excited about individual bonuses, so the debate will continue until I can figure out what works.