Negotiated Performance Appraisal

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Jobs that call for creativity, autonomy, analysis, and personal growth may provide the best motivator of all: intrinsic rewards. Such satisfaction originates from within the worker. An intrinsically motivated worker does not obtain his motivation from external stimulation provided by the employer. An overemphasis on external rewards may be responsible for elimination of internally originated ones. There are personal and organizational objectives that simply cannot be realized through pay.

On the down side, intrinsic motivators, as wonderful as they may appear, are not equally found among all workers, nor do they always motivate the type of performance you may desire. Pay can be a powerful management tool and a compelling motivator. Employees often consider pay as a measure of individual achievement and social status. The importance of pay, then, ought neither be over or underrated.

To be effective, pay must be tied to performance. While incentives (Chapter 8) can yield the clearest link between performance and pay, they are not suitable to all jobs. In this chapter we will look at wage structures, or time-based pay. Even though its relationship to performance may not be as salient as incentive pay, time-based pay can also motivate increased worker performance.

Pay issues covered in this chapter include (1) pay fairness; (2) what is behind pay differences; (3) job evaluations and market considerations; (4) elements of a wage structure; and (5) maintaining a pay structure.

Gregorio Billikopf
University of California