ABSTRACT
This chapter begins by reviewing syntheses of evaluations of pay-for-performance systems research conducted in the late 1980s and early 1990s. Support for performance-related pay theoretically is grounded in expectancy theory and reinforcement theory. A National Research Council (NRC) panel, convened under contract to the US Office of Personnel Management, subsequently reviewed both public and private sector research on pay for performance. The most recent review of pay-for-performance-related research appears as a subset of a study on motivation in the public sector. In addition to assessing whether performance-related pay affects individual and organizational performance, scholars also have been attentive to its effects on several intermediate outcomes, in particular employee perceptions. Several contextual factors appear to be associated with the success of performance-related pay. A factor that appears to affect the efficacy of public performance-related pay is whether it is applied to managers or nonmanagers.
