This article delves into the concept of self-managed work teams and investigates the efficiency-rationale for implementing pay compression within such teams. By examining existing research and theoretical frameworks, this study aims to shed light on the relationship between self-managed work teams, pay compression, and organizational efficiency. The findings highlight the potential benefits of pay compression in promoting teamwork, collaboration, and overall productivity within self-managed work teams. Self-managed work teams have gained attention as a means to enhance employee empowerment and organizational performance. In these teams, employees are responsible for decision-making, task allocation, and problem-solving, resulting in greater autonomy and collaboration. This article explores the efficiency-rationale for implementing pay compression within self-managed work teams. Pay compression, the reduction of wage differentials within teams, is proposed as a strategy to align compensation with the team-based approach and promote team cohesion. Drawing on existing literature and theoretical frameworks, this study examines the potential benefits of pay compression in improving team performance, cooperation, and overall organizational efficiency. The findings contribute to the understanding of how pay compression can be utilized as an effective tool to optimize team dynamics and drive productivity in self-managed work environments.

self-managed work teams, pay compression, efficiency

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