Keywords: pay, performance, reward, incentive, work performance, organisational performance
The majority of thinking and research about pay and reward works on the foundation that the most effective system is to reward people on an individual basis, based on their actual contribution. As a result, we see different pay scales, performance related pay schemes and other rewards-centric financial incentives.
Such systems, however, require a lot of precise information about the individuals work habits, effectiveness, achievements and capabilities. From a management point of view, assessing individuals for such systems is both time-consuming, imprecise and often reliant on the individuals’ self-report of worth. Conflicts between what an individual values themselves at and what a manager or organisation may value them at frequently lead to conflict, demotivation and a range of other negative outcomes.
Additionally, previous studies have found that the performance-related pay and reward structures often result in employees’ engaging in ‘window dressing’ and a range of other strategies in order to create the impression of high performance.
This research briefing shows the problem of performance perception manipulation and what organisations can do about it.
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