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Personnel psychology: performance evaluation and pay for performance
Sara L Rynes1, Barry Gerhart, Laura Parks
1Department of Management & Organizations, Tippie College of Business, University of Iowa, Iowa City, IA 52242, USA. Sara-Rynes@uiowa.edu
Annual Review of Psychology
|February 16, 2005
Summary
This study highlights the gap between performance evaluation (PE) and pay-for-performance (PFP) research in psychology. It reviews PFP systems and suggests integrating psychological insights for better performance improvement strategies.
Area of Science:
- Organizational Psychology
- Human Resource Management
Background:
- Psychological research on performance evaluation (PE) largely ignores pay-for-performance (PFP) linkages.
- Existing PFP research is predominantly from other disciplines, not psychology.
Purpose of the Study:
- To address the separation of PE and PFP research within psychology.
- To review current research on PE, PFP systems, and performance improvement.
- To propose how psychological research can contribute to PFP and performance improvement knowledge.
Main Methods:
- Literature review tracing the historical separation of PE and PFP research in psychology.
- Examination of recent studies on the PE-performance improvement relationship, including 360-degree feedback.
- Analysis of various PFP systems (merit pay, incentives).
Main Results:
- A significant disconnect exists between psychological PE research and PFP research.
- Multisource feedback shows potential for performance improvement.
- Various PFP systems have distinct characteristics and implications.
Conclusions:
- Psychology can offer valuable insights into the effectiveness of PFP systems.
- Integrating PE and PFP research is crucial for understanding and enhancing employee performance.
- Future psychological research should focus on the practical consequences of linking pay to performance.