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Susan T. Fiske, Alan E. Kazdin, and Daniel L. Schacter (Editors). Annual Review of Psychology, Volume 56. Palo Alto, CA: Annual Reviews, 2005, 720 pages, $72.00 hardcover.
Perhaps this is how Columbus and his crew felt when, after months at sea, they finally caught sight of the New World. After several years of patient waiting, the 2005 edition of the Annual Review of Psychology offers three chapters on the core topics of organizational and personnel psychology. (There was an organizational behavior chapter in 2002 and Salas and Cannon-Bowers' memorable training chapter in 2001. But in the intervening years, we have seen nothing but the deep blue sea.)
Rynes, Gerhart, and Parks' chapter. Personnel Psychology: Performance Evaluation and Pay for Performance, is the most welcome and rewarding-the "gold" that we hoped for at the end of our long voyage. As they point out, received wisdom has it that performance evaluation influences individual performance both by providing developmental feedback and by linking rewards to performance. Certainly, businesses believe in the rewards part-pay for performance (PFP) systems are widely used in the United States-and the majority of employees say they want to be paid based on their performance. Yet, psychologists have generally preferred to study the developmental aspects of performance evaluation rather than its connection to pay.
The authors build an interesting case to account for this historical reluctance. They note that some very influential theories (Maslow's hierarchy, Herzberg's motivators and hygiene factors, and Deci and Ryan's intrinsic motivation) have downplayed the significance of pay, even claiming that monetary rewards can have counterproductive effects on "good" (i.e., intrinsic) motivation. Furthermore, Meyer's research at GE on the split roles of appraisal seemed to show that evaluative appraisals have negative effects on performance due to the demoralizing aspects of criticism.
Rynes et al. amass a convincing array of research findings that undermine these dusty but firmly anchored pillars of our faith. They show, for example, that pay and intrinsic motivation can coexist. They also site useful findings that demonstrate that, when negative feedback is focused on the task, people improve their performance; but when it is focused on the person, it disrupts employees' focus on the task and leads to performance decrement. (My experience, however, is that people on the...