Appraising the Performance Of Performance Appraisals [the link that IEEE broke was removed] by Harry Goldstein:
According to Jenkins and Coens, all of the above can be done better and far less painfully by untangling these functions and designing a process for each. First, they argue, companies should decouple compensation decisions from feedback about how the employee is doing. The point is that outside, or extrinsic, motivators such as money do not really work for the vast majority of employees.
One company that found that to be true is Brighton, Mich.-based Peaker Services, which rebuilds locomotive diesel engines and does application engineering work for control systems. In the past, Peaker relied on merit raises linked to annual evaluations, according to president Ian Bradbury.
Related: Deming on Management: Performance Appraisal – Righter Performance Appraisal – Performance Appraisal Problems – Eric Christiansen Podcast – Performance Without Appraisal – Performance Appraisal Alternative – So What’s System[s] Thinking by Ian Bradbury (pdf)