What comes first - Reward or Performance? In other words, do I ask employees to improve performance before a quantum leap in reward or do I commit a quantum leap in reward and ask employees to promise superior performance?
The question focuses us to think about performance and its context for people's pay and rewards. It is usually assumed that performance management is linked to pay only. When I see this question my intuitive answer is performance comes first. That's because performance is determined by the job role, the competition, the other employees in an organization. Getting people to focus on reward first for performance to take place, seems a misplaced priority.
What do you think? Check out the other answers to the question. Interesting insightful stuff on how people think about rewards and performance.
When you hire someone into a role, are you not expecting them to bring their best everyday? If yes, then how could waving more money in front of their face cause them to be able to perform at a higher level, unless they were not giving their best to begin with?
ReplyDeleteContrary to popular belief, pay for performance generally causes corruption. Instead, pay for the complexity level of the role upon hiring, manage performance and then give a merit increase based on judged effectiveness (not measured output, as this is not necessarily an accurate reflection of effectiveness).
Regards,
Michelle Malay Carter
People will figure a way to do the least amount of work for the amount of money that is within their comfort zone. There is a lower AND an upper limit to that zone.
ReplyDeleteIt's easy to understand that if a person feels as though they need to make more money, they will change their work behavior (i.e. work harder). However, I also believe that people will work less efficiently if they feel as though they make more than enough to meet their needs, plus some.
Within a certain range money is motivating, but there is diminishing return. At some point, more money can actually decrease performance.
Example: my 26 year old former co-worker that made $300k one year. The next summer he bought a ski boat and took most afternoons off. There was no compensation/reward that the company could have offered to make him work even more efficiently. The next year he made roughly $200 - back within his comfort zone.