The Toxicity of Pay for Performance
- 1 January 1995
- journal article
- Published by Wolters Kluwer Health in Quality Management in Health Care
- Vol. 4 (1) , 27-33
- https://doi.org/10.1097/00019514-199504010-00003
Abstract
Despite their superficial logic, systems of merit pay or pay for performance have features that are toxic to systemic improvement. Contingent rewards doled out by supervisors cause decreased focus on customer needs, loss of accurate information about defects and improvement opportunities, avoidance of stretch goals, and decreased innovation. They may also erode teamwork. Pay for performance may mark a naive understanding of the complexity of human motivation.Keywords
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