Index

A

Advisory Committee on Federal Pay, 95

Age effects on performance ratings, 64-65

Air Force task inventory, 49, 139

American College Testing, 59

Applied tradition, 3, 45-46, 137-138, 145-146, 150

Army Selection and Classification Project, 61

Automatic step system, 101

B

Behaviorally anchored rating scales, 56, 66-67n.2, 75, 78

validity of, 62-63, 71, 142, 143, 149

Behavioral measures, objective, 59

Bias, demographic, 64-65, 66, 106, 141

Bonus plans

civil service, 20, 27, 29

executives and managers, 79, 87, 88, 114, 125-126, 157

negative effects of, 83

Brownlow Commission, 17

Bureau of National Affairs, 117

C

Campbell, Alan, 18

Carter, Jimmy, 17-19

Civil Rights Act (1964), 35, 138

Civil Service Commission, 15, 19

Civil Service Reform Act (1978)

employee expectations of, 22-26

merit pay, 14, 17, 21-22, 27-28, 135-136

Merit Pay System, 8, 21-22, 28

Merit Systems Protection Board, 19, 29-30, 32, 163

performance appraisal, 21, 54, 133, 135-136, 138, 140, 163



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Pay for Performance: Evaluating Performance Appraisal and Merit Pay Index A Advisory Committee on Federal Pay, 95 Age effects on performance ratings, 64-65 Air Force task inventory, 49, 139 American College Testing, 59 Applied tradition, 3, 45-46, 137-138, 145-146, 150 Army Selection and Classification Project, 61 Automatic step system, 101 B Behaviorally anchored rating scales, 56, 66-67n.2, 75, 78 validity of, 62-63, 71, 142, 143, 149 Behavioral measures, objective, 59 Bias, demographic, 64-65, 66, 106, 141 Bonus plans civil service, 20, 27, 29 executives and managers, 79, 87, 88, 114, 125-126, 157 negative effects of, 83 Brownlow Commission, 17 Bureau of National Affairs, 117 C Campbell, Alan, 18 Carter, Jimmy, 17-19 Civil Rights Act (1964), 35, 138 Civil Service Commission, 15, 19 Civil Service Reform Act (1978) employee expectations of, 22-26 merit pay, 14, 17, 21-22, 27-28, 135-136 Merit Pay System, 8, 21-22, 28 Merit Systems Protection Board, 19, 29-30, 32, 163 performance appraisal, 21, 54, 133, 135-136, 138, 140, 163

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay Performance Management and Recognition System, 28-30 Reagan administration and, 26-27 Senior Executive Service, 19-20 Classification Act (1923), 15-16 Classification Act (1949), 16 Cognitive ability tests, 60, 63-64, 66 Cognitive models, supervisor appraisal, 50, 66-67, 144 Collective bargaining agreements, 10 Communication, management-employee, 36-37, 108, 118, 120, 136, 145 , 148 Comparability increases, 20, 22, 29 Conference Board survey, 102, 104, 113, 115, 117 Constructionist school, 49 Construct validity, 58, 63-65, 66 Content validation, 58-59, 66 Context variables. See Organizational context Contingency theory, 67-68 Contingent labor, 124 Convergent validity, 58, 61-63 Cost-effectiveness, organizational, 36-37 Criterion-referenced appraisal, 55 Criterion-related validation, 58, 59-61, 63, 142 Critical incident technique, 49-50, 58, 66, 139 Critical job behaviors, 21, 56, 62, 70 D Defense Department, 51 Demographic bias, 64-65, 66, 106, 141 Devine, Donald, 26-27 Discriminant validity, 58, 61-63 Distributive justice, 92, 93, 95, 154, 155 Due process requirements, 10, 133 E Economic environment, 83, 89, 90, 130-131 Employee motivation group incentive plans, 10-11, 86-89, 115 individual incentive plans, 81-84 merit pay and, 5, 84-86, 99, 165 organizational context and, 122, 129, 130-131, 158-159 pay for performance and, 5, 36-37, 80-81, 89-90, 136, 153-154, 165 performance appraisal and, 3, 28, 67-69, 146 public sector, 163 Employee perceptions economic pressures and, 130-131 of fairness, 11, 92, 95-96, 101, 112, 129, 148, 150, 155, 156 meaningfulness of pay increases, 5, 30, 81, 85, 99, 153, 165 of performance appraisal systems, 106, 111, 145, 161 of performance goals, 5, 81, 85, 97, 99, 153, 165 of performance-pay link, 5, 21, 27-28, 29, 32, 68, 81, 85, 117, 120 , 153, 161, 165 trust in management, 69, 83, 89, 95, 130, 133, 153 Employees attraction and retention of, 90-92, 98, 100, 113, 154 decision-making participation, 86-87, 93 fair and equitable treatment of, 5, 11, 36-37, 92-96, 100-101, 113 , 154-155 individual incentive plans and, 83-84, 89, 99, 133

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay information sharing with, 10, 118-119, 120, 125-126, 156-157 legal protections, 5, 132-133, 163 organizational commitment, 88 participation in setting performance goals, 99, 104, 105, 108 performance appraisal feedback, 63, 65, 69, 72, 75, 146 personal characteristics, 56, 62 supervisors' knowledge of, 50-51, 60-61, 66-67, 142, 150-151 See also Federal employees; Individual job performance; Performance appraisal Employment discrimination, 132 Environmental factors economic climate, 83, 89, 90, 130-131 laws and regulations, 132-133, 160, 162 rating distortion, 147-148 unionization, 90, 131-132, 160 Environmental Protection Agency, 31, 126 Equity and fair treatment, 32-33, 92-96, 154-155, 165 cost trade-offs, 97, 98 employee perceptions of, 11, 92, 95-96, 100-101, 112, 129, 148, 150 , 155, 156 Equity pay plans, 10, 152 Equity theory, 73-74 Evolutionary (dynamic) strategies in organizations, 125-126, 159 Executive Position Description Questionnaire, 49, 52 Executives, 38, 88, 113, 114, 125 See also Managers Expectancy theory, 80-81, 82, 86, 88, 89, 99, 146, 153 Expectancy X Valence model, 67-68 External factors. See Environmental factors F Federal Employee Attitude Survey, 22 Federal employees attitudes toward Civil Service Reform, 22-26, 28, 136 attitudes toward employment conditions, 7, 26, 29-30, 32 attitudes toward pay for performance, 94-95, 101, 111, 155 managers, 5, 13, 19-20, 21, 27, 28, 30-31, 118-119, 124, 155 merit system, 7, 8, 14-17, 21-22, 23, 27-30, 31, 44 organizational commitment, 28 pay information, 10, 118-119, 157 performance appraisal, 13, 16, 23, 28, 38, 54, 76, 126, 133, 135 private-sector pay gap, 7, 30, 32, 136, 165-166 recruitment, 30-31 regulatory protections, 132-133, 163 unions and professional associations, 131-132 Federal Labor Relations Authority, 19 Federal policy implications merit pay, 42-44, 160-166 pay for performance research, 98-101, 134 performance appraisal, 3, 5, 138, 150, 160, 164-165 private-sector practice, 5-6, 7-8, 31, 40, 119-121, 135 Federal Reorganization Act (1939), 17 Forced-choice scales, 57, 147-148

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay Fortune 100 firms survey, 102, 106, 108, 113, 118, 120, 156 G Gainsharing plans employee acceptance of, 131 and organizational performance, 8, 11, 79-80, 86, 87-88, 90, 114, 115, 116, 154, 157, 158 Garfield, James Abram, 14 Gender effects, 64 General Accounting Office, 28, 30, 32, 132, 163 General Aptitude Test Battery, 63 General Schedule, 16, 22, 27, 28, 136 General Services Administration, 30 Global ratings, 54-55, 67, 74-75, 144, 149 Goal-setting theory, 81, 82, 86, 88, 89, 99, 152, 153 Graphic scales, 55-56, 143 Group incentive plans context, 97 pay increases, 10, 79-80, 95, 155 performance effects, 86-89, 154 private-sector practice, 90, 114, 134, 151, 157, 159 H Halo error, 55, 62, 67, 144, 147 Hawthorne effect, 40-41 Hay Company, 10 Health and Human Services Department, 31 Hewitt Associates survey, 114, 115 Hoover Commission, 16 Hourly employees, 103, 113, 114 I Incentive Awards Act (1954), 16 Individual incentive plans definition, 10, 151-152 economic pressures and, 130-131 negative consequences of, 83-84, 89, 99, 133 performance effects, 81-84, 153, 158-159 unions and, 97-98 Individual job performance measurement of, 45, 48-55, 58, 66, 78, 126, 132-133, 137-138, 140-141, 149-150 merit pay and, 4, 9, 99, 100, 157-158 and organizational effectiveness, 21, 76, 112-113 perceived link with pay increases, 5, 21, 27-28, 29, 32, 68, 81, 85, 117, 120, 153, 161, 165 See also Performance appraisal Information sharing about performance and pay, 88, 118-119, 120, 156-157 Instrumentality models of motivation, 73 Internal Revenue Service, 126 Intrinsic motivation, 68 J Job analysis, 2, 49-52, 74, 124, 138, 139-140, 150 validity of measures, 58-59, 66, 148 Job complexity and interdependence, 97, 99-100, 123 Job element method, 49, 139 Job knowledge, 60-61, 66 Job (work) samples, 60, 63-64, 66 Job satisfaction, 85, 154 Job security, 131 Job-specific ratings, 54-55, 67, 74-75, 144, 149

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay Joint-Service Job Performance Measurement Project, 51-52, 54 L Labor cost regulation, 8, 10-11, 79, 80, 96-98, 100, 113, 115, 120 , 155-156 Labor productivity. See Employees; Productivity Labor regulations, 132-133, 160, 162 Office of Personnel Management, 19, 21, 132, 138 Labor relations, 87, 130 Labor unions, 7, 97-98, 100, 131-132, 160 Leniency error, 55, 62, 147 Litigation, 31, 35, 67, 94, 144 M McKinley, William, 15 Management labor relations, 87, 130 and pay risks, 11, 95 systems, 127-129 Management by objective, 9, 47-48n.1, 76, 84, 104, 108, 124 Management Excellence Inventory, 53 Managers (supervisors) beliefs about performance and pay, 94, 95, 106-107, 110-111, 118-119, 155 employee appraisal, 2, 3, 50-51, 60-61, 63-65, 66-67, 74, 96, 108-110, 142, 148, 149, 150-151, 164 employee trust in, 69, 83, 89, 95, 130, 133, 153 federal, 5, 13, 19-20, 21, 27, 28, 30-31, 118-119, 124, 155 flexibility and discretion, 5, 23, 31, 32, 120-121, 133, 156, 161, 163, 164 group incentive plans, 88-89 merit pay plans, 38, 84, 85-86, 156, 157 performance of, 47, 49, 52-54, 59, 66, 74, 75-76, 105, 133, 139, 140, 159 rater training, 70-72, 75, 106, 108, 146-147 rating distortion, 72-74, 145-146 use of performance appraisal systems, 5, 10, 11, 84-85, 105-106, 108, 149, 164-165 Measurement errors in, 55, 56; see also Rating errors individual job performance, 45, 48-55, 58, 66, 78, 126, 132-133, 137-138, 140-141, 149-150 organizational performance, 116 performance appraisal system success, 3, 106, 112 quantitative, 54, 81, 86, 90, 96, 97, 99, 124 rating scale formats, 55-57 validity and reliability of, 37-38, 57-67 Mechanistic organization, 127-128 Merit grid, 9, 78 Merit pay effectiveness of, 4, 117-118, 119 employee attraction and retention, 91, 100, 154 employee motivation, 5, 84-86, 89, 99-100, 131, 153-154, 165 federal civil service, 7, 8, 14-17, 21-22, 23, 27-30, 31, 44 performance ratings, 81-82, 96-97, 109-110, 149, 151-152, 164-165

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay plan administration, 116-117 plan budgets, 115 plan design, 115-116 private-sector practice, 9-10, 113-121, 156-157, 160-161 public-sector attitudes toward, 94-95, 101, 111, 155 See also Pay for performance Merit Pay System, 8, 21-22, 27-28, 30, 136 Merit Systems Protection Board, 19, 29-30, 32, 163 Meta-analysis, 59-60, 63, 64, 65 Mid-level managers, 1, 21, 27, 28, 88-89, 110, 157. See also Managers Military job performance, 51-52, 60, 61, 142 Mixed Standard Scale, 56-57, 61, 143 Motivation theory, 11-12, 152. See also Employee motivation Multimethod-multirater technique, 61-62 N National Commission on the Public Service, 30-31 National Institute of Standards and Technology, 31 National Institutes of Health, 31 National Science Foundation, 31 Navy studies, 22, 24-25, 73, 91 Neutral competence, 14, 17, 31-32 Nixon, Richard M., 18 Norm-referenced appraisals, 55 O Objectivity in measurement, 48, 59, 140 Office of Personnel Management, 1, 7, 36, 135 federal employee survey, 22, 24-25 Management Excellence Inventory, 53 politicization of, 26-27, 28 regulations, 19, 21, 132, 138 Opinion surveys, 106, 112, 120 Organic organization, 127 Organizational context boundary, 162-163 culture and personnel practice, 39, 43, 110-111, 112, 118, 119, 120 , 152 effect on employees, 86-88, 93 labor cost control, 96, 98 labor relations, 130 and rating distortion, 72 research and, 4, 40-41, 47, 137, 158 size, 129-130 strategy and goals, 124-127, 133, 134 structure and management systems, 127-129, 134, 159-160 technological fit, 123-124, 158-159 Organizational justice, 42, 92, 93, 154 Organizational performance individual performance effects, 10-11, 48, 76, 112-113, 145-146, 158 pay for performance systems and, 36-37, 38, 41-42, 79, 89, 90, 114 -115, 136, 158 P Pay for performance definitions, 3-4, 8-9 economic climate and, 130-131 effectiveness criteria, 36-37, 43 employee attraction and retention, 90-92, 98, 100, 113, 154

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay employee motivation, 4, 80-90, 136, 153-154, 157-158 fair treatment and equity, 92-96, 154-155 federal civil service, 13, 20, 21-22, 26, 27-33, 98-101, 161 labor cost regulation, 96-98, 155-156 organizational context and, 4, 122, 130, 134, 158-160 and organizational performance, 36-37, 38, 41-42, 79, 89, 90, 114-115, 136, 158 and rating distortion, 73-74, 75 research on, 11-12, 35-36, 77, 80 unions and, 131-132, 160 See also Individual job performance; Merit pay Pay increases group incentive plans, 86, 95 merit plans, 5, 9, 85, 89, 95 seen as meaningful, 5, 30, 81, 85, 99, 153, 165 See also Performance-pay link Pay satisfaction and dissatisfaction, 29-30, 32, 92-94, 95 Pay system objectives, 77, 80, 96, 98, 101, 113, 114, 151 Peer ratings, 65 Pendleton Act (1883), 14-15 Performance appraisal applied tradition, 3, 45-46, 145-146 confidentiality of information, 39 effectiveness of, 43, 106-107, 112, 145, 148 employee feedback, 63, 65, 69, 72, 75, 146 employee performance objectives, 5, 54, 81, 84, 85, 94, 97, 99, 108 , 148, 153, 165 federal civil service, 3, 5, 13, 15-16, 20, 21, 22-23, 28-29, 135, 138, 160, 162-163 intended use of ratings, 3, 72, 73, 147 job analysis, 139-140 job performance measurement, 2-3, 45, 48-55, 138-139 legal protections and, 132-133, 163 legitimation aspects, 44, 75, 133 managerial judgment in, 2, 3, 109-110, 148, 149, 151 managerial performance, 47, 49, 52-54, 59, 66, 74, 75-76, 133, 139 , 140, 159 and motivation, 3, 28, 67-69, 146 organizational context and, 4, 47, 122, 125-126, 128, 134, 158, 160 private-sector practice, 5, 67, 102, 103-113, 119-120, 124, 148, 164 process emphasis, 42, 109, 112, 120, 148, 149 psychometric properties, 55-67, 74-75, 140-144, 150 quantitative measures, 54, 81, 86, 90, 96, 97, 99, 124 rater training, 70-72, 75, 106, 108 rating distortion, 72-74, 75, 147-148 rating quality, 69-72, 146-147, 149 reliability, interrater, 55, 65-66, 140-141 research on, 34-35, 46-48, 137-138 technology and, 123-124 unions and, 131, 160 validity of measures, 57-65, 141-142 Performance management, 109

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay Performance Management and Recognition System, 1, 5-6, 7, 8, 28-30, 43, 135-136, 146, 164, 166 Performance-pay link, 5, 21, 27-28, 29, 32, 68, 81, 85, 117, 120, 153, 161, 165 Performance Rating Act (1950), 16 Performance Review Board, 20, 27 Performance Standards Review Boards, 29 Personnel Management Project, 18-19 Personnel managers. See Managers; Organizational context Piece rates cost of implementation, 96, 97, 100 distortion of data, 83 and productivity, 82, 96, 153 Political appointments, 14-15, 18, 136, 161-162 Political neutrality. See Neutral competence Position Analysis Questionnaire, 49 Private-sector practice attitudes toward pay for performance, 29, 94, 95, 110-111, 155 federal government implications, 31, 40, 44, 119-121, 135, 160-166 merit pay, 9-10, 113-119, 156-157, 160-161 performance appraisal, 5, 54, 67, 102, 103-113, 119-120, 124, 148, 164 unions and, 131, 160 See also Pay for performance; Performance appraisal Procedural justice, 42, 43, 120 employee perceptions of, 93, 94, 95-96, 101, 154, 155 Productivity, 7-8, 37 pay for performance and, 82, 87-88, 96, 157 performance appraisal feedback and, 63, 65, 146 See also Individual job performance; Organizational performance Profit-sharing plans, 8, 10, 90, 152 performance effects, 88-89, 154 private-sector practice, 79, 86, 114, 157 unions and, 131 Psychological testing, 58; see also Standardized tests Psychometric properties interrater reliability, 46, 65-66, 76, 140-141, 149-150 scale formats, 55-57, 66-67, 74-75, 138-139, 143-144 validity of measures, 57-65, 66, 141-142, 149-150 See also Performance appraisal Q Quality step increase, 16-17, 22 Quantitative performance measures, 54, 81, 86, 90, 96, 97, 99, 124 Questionnaires, 49, 52, 139 R Race effects, 64, 141 Ramspeck Act (1940), 16 Rank in person, 15, 19 Rank in position, 15 Rating distortion, 72-74, 147-148 Rating errors, 2, 46, 55, 70, 71, 143, 147 See also Halo error; Leniency error; Reliability Rating quality, 69-70, 71-72, 146-147

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay rater training, 70-72, 75, 106, 108 rating sequence, 71 Rating scale formats behaviorally based, 56, 62, 71, 75 evaluation of 66-67, 74-75, 143-144 federal civil service, 16 forced-choice, 57, 147-148 graphic 55-56, 143 mixed standard 56-57, 61, 143 number of anchors, 3, 65-66, 75, 144 Reagan, Ronald, 26-27 Reliability, 139, 140-141, 148, 149 interrater, 55, 65-66, 74, 76 See also Performance appraisal Reorganization Plan No. 2, 17-18, 19 Research findings convergence with private-sector practice, 102, 112-113, 119 cost regulation, 96-98, 155-156 employee motivation, 67-69, 80-90, 153-154 employee retention, 90-92 fair treatment and equity, 92-96, 154-155 pay for performance, government implications, 42-44, 98-101 performance appraisal, 35, 46, 67-69, 74-75, 149-151 quality of rating data, 69-72 rating distortion, 72-74 Restriction in range error, 55 Roosevelt, Franklin D., 15, 17 S Salary Reform Act (1962), 16-17 Sales commissions, 10, 38, 78-79, 114, 151-152 Scholastic Aptitude Test, 58, 59 Selection tests, 59 Self-rating, 65, 69, 146 Senior Executive Association, 27 Senior Executive Service, 16, 19-20, 21, 26, 27 Social Security Administration, 31, 85-86 Standard Descriptive Rating Scale, 63 Standardized tests, 46, 138-139, 142 Statistical analysis, 41, 142, 147 Steady-state organizations, 125-126, 134, 159 Supervisors. See Managers Surveys, 39, 42 T Task inventory, 49, 50, 51, 52, 90 Technological fit, 123-124, 158-159 Temporary employees, 17 Traits, 53-54, 66-67, 144 Trait scales, 56, 61, 75 U Unionized employees, 103, 113 V Validity, 37-38, 57-58, 67, 74, 76, 133, 139, 141-142, 148, 149, 150 construct, 58, 63-65, 66 content, 58-59, 66 convergent and discriminant, 58, 61-63 criterion, 59-61, 63, 142 See also Performance appraisal Variable pay plans, 3, 103, 151-152, 155 performance effects, 4, 10-11, 119, 157-158 private-sector practice, 113-118, 156

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Pay for Performance: Evaluating Performance Appraisal and Merit Pay W Whistleblower protections, 23 Work climate, 130 Work group cooperation, 83, 87 Work (job) samples, 60, 63-64, 66 Wyatt Company, 29, 105-106, 108, 109, 112, 117