Chapter 11

Rewarding performance

Unethical behaviors By creating pressure to produce and to keep score incentives may induce
employees to engage in undesirable behaviors to cut corners deceive misinform hide negative
information, take more credit than they deserve.
Unfortunately, employee cynicism about company ethics and senior leadership are also on the
rise. A survey showed that only 50 percent of employees believe their top executives had high
integrity and aproximely the same percentage shared similar feelings about the entire
organization. As a result employees unconsciously blame their employer for their own
questionable behaviors or ethical lapses in order to meet incentive criteria rather than take full
responsibility for their actions.

Lack of control
Factors beyond an employee’s control include the supervisor , performance of other work group
members the quality of the materials the employee is working with, working conditions the
amount of support from management and environmental factors.
Gainsharing for doctors: Because doctors might be tempted to use more expensive procedures
than are necessary, some insurance companies are providing incentives to minimize this problem.
They are doing this through gainsharing plans.

Assesing employee performance is one of the thorniest tasks a manager faces, particularly when
the assessment is used to dispense rewards. At the employee level the appraiser must try to
untangle individual contributions from those of the work group while avoiding judgements based
on a personality bias likes and dislikes and political agendas.
Pay for performance system may lead to greater productivity but lower job satisfaction. Some
research suggest that the more pay is tied to performance the more the work unit begins to
unravel and the more unhappy employees become
Pay for performance programs may push employees to the point of doing whatever it takes to get
the promised monetary reward and in the process may stifle their talents and creativity

Properly designed ´pay for performance systems present managers with an excellent opportunity
to algn employees interest with those of the organization

Chapter 11 Santiago García
Link pay and performance appropriately
In a few instances managers can justify paying workers according to a preestablished formula or
measure. Traditional piece rate system in which workers are paid per unit produced, represent the
tightest link between pay and performance.

Pay performance programs are not likely to achieve the desired results unless they are
accompanied by complementary HRM programs. For instance performance appraisals and
supervisory training usually play a major role in the eventual success or failure of a pay
performance plan