[dpweb]

Wouldn't it make sense to just pay everyone (in the same type of role) essentially the same amount and then bonus people from time to time on particular outstanding achievements. Nothing is a more powerful inducement than financial incentives and a bonus gives an impact that the ongoing salary doesn't. People don't give a crap about annual reviews unless they think its low enough to get them fired.

My sense is performance evaluations should be banished from the corporate world, for the most part. Usually a waste of time, but that is where managers can be helpful as they are carrying an ongoing assessment of the value of each of their employees at all times.

[ck425]

'Nothing is a more powerful inducement than financial incentives'

Actually there's a lot of research that contradicts this. Essentially as long as people have enough money that they don't worry about money ie a comfortable middle class lifestyle for country/area, and they don't think they earn significantly less that their peers, money is very inefficient and occasionally negative incentive for tasks that require a decent level cognitive ability.

[thenomad]

IIRC Peopleware showed that financial bonuses were tremendously effective - at reducing peoples' investment in their work.

[usrusr]

Extra money for excellence comes with an implied message that the regular money is just for showing up. You really don't want your employees to feel that way.