Pay for Performance Systems

How could an organization measure the effectiveness of their pay-for-performance plans?

In principle, organizations could measure the effectiveness of their pay-for-performance plans by establishing objective criteria for defining "effectiveness" and then measuring those criteria before and after implementation of the plan and comparing those results (Kline & Sulsky, 2009). For example, in a general business organization, the criteria used to evaluate the effectiveness of performance plans might be individual and team productivity, quality of production, error rates, and both supervisor evaluations and self-reports of employee satisfaction (Kline & Sulsky, 2009).

Likewise, employee turnover and retention rates before and after plan implementation could also prove useful. In addition to some of those same criteria, within an educational vocational environment, some of the education-specific criteria that could be considered might include student performance (both in course grades and also on standardized tests) and anonymous student teacher evaluations. Some...
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