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Contingency incentive and optimal performance appraisal system design
Ma Jun
2009, 30(2):
184-192 .
The traditional control-oriented Performance Appraisal System (PAS) doesn’t adapt to the current organizational strategy that requires rapid response to the customer and self-management of the individual in the knowledge age. Most existing researches on PAS rigidly emphasize structural design which is lack of probing into the effectiveness of PAS under the different contexts. By adding a constraint condition-commitment constraint into the basic mechanism design model which includes two constraint conditions, namely, the individual rationality and incentive compatibility, an incentive-performance model is constructed, and an optimal PAS design model under three situational contexts is deduced. The conclusion is that there is a reverse substitution relationship between performance-control, social-control, and self-restraint. Therefore, an appropriate PAS design can excavate some implicit value-driven factors, such as the staff’s creativity, organizational cohesion, and team synergy though vision inducement, culture edification, and self-driven and promote the enterprise creating values at a higher level.
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