The risky business of rewarding for performance 1
The claim that reward is no longer simply the cost of hiring necessary labour, but instead a management tool for securing strategically valuable employee outcomes, is appraised. In particular, running contrary to normative ideology, a counterpoint argument is made that ubiquitous pay for individual performance over the past decade has become bad for business, prompting increasing external scrutiny and regulatory intervention. Controlling for industry effects, and covering a wide range of employee categories, in-depth empirical findings are presented from research highlighting the inherent risks for corporate employers of embracing the unitarist logic of rewarding for performance in the terms that have been institutionalized for adopting this practice. A call is made fundamentally to revise how, in future, employers reward people for their role in value creation.