Companies offer performance-related pay because that lets the good employees select themselves for the job. If you're not willing to be paid per (goal scored/extra penny on the share price/lawsuit won) then maybe you're not so confident in your abilities after all. And who'd know your own abilities better than you?I also agree with Leigh that a) there isn't a clear answer to this one and b) much of the stuff about the negative impact of rewards is experimental - we definitely need some real-world evidence. This to me makes it all the more surprising that performance-related pay is an ever bigger slice of exec pay - as if its effectiveness had been conclusively proved.
Wednesday, 13 October 2010
Pay and performance
Just a quickie - Leigh at Knowing and Making has responded to my post from the other day with a great post here. Here's a good bit I hadn't considered: