When it comes to performance related pay, commentary often focuses on the positive effects it can have on employee and organizational performance. But is there a downside? A Finnish study sought to investigate the role that pay for performance can have on employee innovation. The results indicated that reward for innovation related behaviours can stunt radical innovation, while it can have a moderate positive effect on incremental innovation.
Key Topics: Performance related pay; Innovation
When it comes to eliciting the best from their employees, companies are increasingly moving toward pay for performance reward strategies, which focus on rewarding employees’ job skills, knowledge, competencies and productivity. A recent Malaysian study sought to understand factors influencing perceived unfairness of such reward practices and found that elements such as effective communication, participation, and performance appraisals can have a significant impact on perceived fairness by employees.
Key Topics: Job satisfaction, Performance appraisal, Performance based reward
Does employee compensation level influence their future treatment by organizations? A recent study examining players in the NFL sought to understand if players in which organizations had made a greater financial commitment received preferential treatment through more game time. The results indicated that higher compensated players did receive more game time but were no more productive on the field that than their lower compensated colleagues, suggesting that their additional game time was related to bias due to the investment the team had made in them.
Key Topics: Compensation bias; Employee performance
Barcelona and Real Madrid are dominant forces in world soccer as well as domestically in Spain, but what role does reward management play in their success and what can organizations learn from their successful team reward strategies? With organizations increasingly utilizing team work in order to increase company performance and competitive advantage there are some key lessons that they can learn from two of the most successful teams in world sport today.
Key Topics: Team performance; Pay-for-performance; Pay dispersion, Merit pay; Bonuses
The Powerful Influence Of Managers and Co-workers On Employees’ Perceptions Of HR Practices
The importance of HR practices in directing employee behavior is in little doubt, however employees’ perceptions of HR practices, such as pay for performance, can often differ considerably, making it difficult for companies to predict how they will influence behavior. Examining the variability in employees’ perceptions of HR practices, a study of employees in the Insurance and Public sectors found that employees’ perceptions of HR practices were closely related to managers’ and coworkers’ perceptions of HR practices, with those more demographically similar to employees having the greatest influence over their perceptions of HR practices.
Key Topics: Perceptions of HR practices; Demographic similarity
Companies have more tools at their disposal now than ever before to elicit improved employee performance, but are the basics of meaningful work being forgotten? A study of Chinese administrative workers sought to examine the importance of job meaningfulness to workers, as well as both financial and recognition incentives on employee performance. All three factors were found to positively impact performance, with meaning found to be most significant in eliciting the greatest performance gains. These factors were also found to interact with each other in interesting ways.
Key Topics: Job meaning; Financial rewards; Recognition; Employee performance
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