Pay-for-Performance

Bob Sutton has a post about Evidence-Based Practices. He links to the recent congressional testimony of his colleague Jeff Pfeffer on Evidence Based Managment. One of the primary focus areas is the Pay-for-Performance systems that the private sector uses.

Here's a quote:
Numerous surveys, including surveys conducted by the same compensation consulting firms that frequently advise on and advocate pay-for-performance systems, provide evidence of widespread dissatisfaction. For instance, a 2004 Watson Wyatt study of employee attitudes and opinions found that only 30% of U.S. workers believed that their company's performance management program did what it was intended to do -- improve performance. That's because fewer than 40% of people felt that the systems generated clear goals or provided honest feedback, while almost 40% believed their performance was inaccurately evaluated and about the same number said they did not understand the measures used to assess their performance. A 2004 Hewitt survey of some 350 companies reported that more than 80 percent of the organizations believed their pay-for-performance programs were at best partly successful or were not successful at all at accomplishing their goals.