Pay for performance. Implementing a financial incentive for excellent work.

Abstract

Based upon my own experience with the system, both staff and supervisors believe that the advantage of pay for performance outweigh the disadvantages. I frequently encountered issues such as how to get a higher rating, what is the incentive to identify a difficult objective if one can pick an easier objective and still receive a higher rating, and where do individuals fall in the ratings compared to peers. In response to achieving a higher rating, the supervisors reviewed the rating system and developed objectives that would receive higher ratings. The supervisors and administrators put emphasis on improved performance, rather than on points. To convince employees to choose more difficult objectives, we explained that objectives should reflect the skills and goals of each employee. The objective serves as an indicator of how well the employee achieved a goal. In dealing with the ranking problem, we told the staff where they ranked in relation to others (eg, top, middle, bottom), but emphasized that the evaluation is confidential and that the results are not to be shared. In conclusion, pay for performance offers a supervisor a detailed objective format for reviewing an employee's performance. For the employees, it provides a means in which their performance review is based on individual achievement of self-selected objectives. Employees are measured against their own standards rather than being compared with others performing the same job.