Personnel psychology: Performance evaluation and pay for performance

Although there is a voluminous psychological literature on performance evaluation (PE), surprisingly little of this research examines the consequences of linking pay to evaluated performance in work settings. Rather, PE research has been dominated by cognitive processing, measurement, and construct...

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Bibliographic Details
Published inAnnual review of psychology Vol. 56; no. 1; pp. 571 - 600
Main Authors RYNES, Sara L, GERHART, Barry, PARKS, Laura
Format Journal Article
LanguageEnglish
Published Palo Alto, CA Annual Reviews 2005
Annual Reviews, Inc
Subjects
Biological and medical sciences
Empirical Research
Employee Performance Appraisal
Feedback
Fundamental and applied biological sciences. Psychology
Humans
Incentives
Motivation
Occupational psychology
Organizational Culture
Organizational Policy
Orientation. Selection. Evaluation
Performance appraisal
Performance evaluation
Personnel Management - economics
Psychology
Psychology, Social - methods
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Wages & salaries
Human
feedback
Wage
incentives
motivation
appraisal
pay
Vocational aptitude
Review
Performance
Discipline
Professional evaluation
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Summary:Although there is a voluminous psychological literature on performance evaluation (PE), surprisingly little of this research examines the consequences of linking pay to evaluated performance in work settings. Rather, PE research has been dominated by cognitive processing, measurement, and construct validity issues. At the same time, a large literature on pay-for-performance (PFP) linkages does exist, but most of it has been conducted in disciplines other than psychology. We think this pattern should change. To this end, we briefly trace the origins of the general separation of PE research from PFP research in psychology. From there, we review recent research on the relationship between PE and performance improvement, particularly with respect to multisource or 360-degree evaluation. We then turn to research on various PFP systems, such as merit pay and individual and group incentives. We conclude with suggestions as to how psychological research can make useful contributions to knowledge of PE, PFP, and performance improvement.
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ISSN:0066-4308
1545-2085
DOI:10.1146/annurev.psych.56.091103.070254