Pay-for performance revisited

[glasgow3]

Our facility has replaced our traditional annual evaluations with a so-called pay-for-performance system. Since we do not receive cost of living adjustments, the pay for performance system represents the only mechanism we have for increasing our wages.

Unfortunately, it was evident from the beginning that many of the potential pitfalls were present in the plan: Arbitrary/unrealistically high goals, goals which are substantially uncontrollable by nursing, etc. The end result will be 1-2% raises for even the best nurses.

What has been your experience with pay-for performance? Has morale, competitiveness, retention etc plummeted to such a degree that the programs were modified or scrapped?

[llg, PhD, RN]

My experience with it has been negative. Mangers were limited as to how much they could give out in total raises -- meaning that the staff had to compete against each other for the limited amount of dollars available.

In addition, it made the whole eval process "nit-picky" as people tried to get credit for every point they could. Instead of having a productive conversation about how the job was going, achievements, problems, goals for next year, etc. the eval process became very negative. The staff member would fight for every point she could possibly get and the manager would be trying to be sure no one got credit for anything they didn't absolute deserve. Staff members would be secretly hoping that people would fail in their attempts to get credit for anything good because that would mean less money available for the rest of them.

Also ... it caused problems for years in that people who had performed well a few years earlier had gotten merit raises at that time ... then when they got, say, a 2% COLA adjustment, their adjustment would be a little bigger because they were at a higher salary. As years went by, those COLA's started to compound (as in compounding interest) creating a significant difference in salaries. ... And some of those nurses who had been star performers 5 years earlier were no longer stars - yet their base salaries were higher due to previous years of pay-for-performance raises.

It was a mess and created lots of tension. I would prefer to not be paid that way because of the tension/competition it created between coworkers. It's not worth it.