John asks:
"I am wondering if anyone has done any work on the systemic effects of
individual pay for performance and its effect on productivity and employee
engagement."
Virtually all the recent research, journal articles and books by respected
authorities agrees that individual pay for performance systems are
ineffective or even harm productivity. Two recent citations:
Dr. Jeffrey Pfeffer writes in "Six Dangerous Myths About Pay" in the May
-June, 1998 issue of Harvard Business Review:
"Myth #5 - Individual incentive pay improves performance. Reality -
Individual incentive pay, in reality, undermines performance - of both the
individual and the organization. Many studies strongly suggest that this
form of reward undermines teamwork, encourages a short-term focus, and
leads people to believe t hat pay is not related to performance at all but
to having the 'right' relationships and an ingratiating personality."
Dr. Ed Lawler, Director of the Center for Effective Organizations at the
University of Southern California, in his most recent book, "From the
Ground Up", p. 210:
"Ironically, despite their label, traditional merit-pay salary sytems are
probably the worst offenders with respect to paying for performance and
providing motivation........It is not surprising, given the way the
systems operate in most companies, that s tudy after study has found that
merit pay systems are not motivational."
Good luck! You're on the right track.
Roxanne
--Roxanne Abbas mailto:rabbas@comp-web.com http://www.comp-web.com
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