Removing performance appraisal and merit pay in the name of quality An empirical study of employess'reactions

摘要

Given the important and institutionalized roles of performance evaluations and merit pay plans in organizations,it is likely that employees would have strongreactions to the abrupt removal of established evaluation andmerit pay systems prescribed by the implementation of Deming'squality management philosophy.This paper develops a model thattests employees' reactions to the removal of these programs ona sample of 123 nonmaanagerial bank employees.Results indicatethat the policy changes were positively received by employees.Replacing a traditional performance appraisal with a concertedperformance feedback and coaching effort,and merit pay with ablanket pay increase enhanced employees'perceptions of pay fairness,pay satisfaction,and job satisfaction.