Recently I was having a conversation about the issues associated with putting in place a performance management process that is meaningful for both the company and employees. During the discussion the issue of how to allocate bonuses based on the results of the performance review reared it’s ugly head. That led to a discussion on ‘forced’ distribution. The culture of the firm I was speaking with has always rewarded the top performers through the output of the performance reviews. I suggested that this sacred cow needed to be examined more closely.
Many organizations struggle with this concept: Do you link bonus and pay to the performance review or do you disjoin the two?