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Supporters of pay-for-performance system claim that traditional pay systems are ineffective, since work is done without additional motivation and salary received is taken for granted. Various factors, affecting the pay-for-performance system, are thoroughly researched by economists around the world. However, some of them argue that the most important factors were studied not properly. They include negative effects of pay-for-performance: lowering of the employee’s self-esteem, loss of motivation for quality work and rush for quantity, destruction of teamwork and loss of individual creativity. The most troubling issue is the concentration solely on tasks, bringing incentives, instead of overall excellent performance.
Performance must be linked to the pay, as well as the effort. Another barrier is evaluation of the work of the managers, especially while working in groups. These and other barriers deserve closer attention and detailed study, but as Gerhart and Runes(2003) noted, less important issues are researched, while important essentials are left behind. They also noted that managerial decision making in such cases is researched on a very low level. The company allowed full access to its documents and granted the right to interview the managers. Only five out of thirteen programs, running at Hewlett-Packard, were presented in the research.
Local managers could choose whether to cease or continue the pay-for-performance programs, as they were fully autonomous in this aspect. The negative side of research is that it was performed by observation and analysis of naturally developing processes, not the set-up experiments with strict limitations as to what should be done to fulfill one.
HP used a merit pay (based on supervisor ratings), employee performance rankings, equal profit-sharing system, stock options for employees, team and individual incentives. The authors both reviewed the documents and conducted their own research, based on interviews. Due to the limitations of space, five sites were closely examined: San-Diego, Boise Printer Formatter Shop, PRCO Loveland, Colorado Memory Systems and the Workstations Group. These programs, along with the eight not mentioned in the report, were used to determine the need of further implementation of the pay-for-performance system within HP. The last reason was that HP gained positive experience from introducing the alternative system, but its costly implementation, together with insufficient outcomes, did not attract the management in the further business perspective.
Another issue, considered during the research, was connected to keeping the employees from being overpaid for extra performance. The trust, existing in HP for years, was lost in the period, when managers began the implementation of the pay-for-performance system. Thus, authors made a hypothesis that companies like HP should implement such changes in a simpler and easier way. Employees got scared of the way the new payout system was implemented with and did not approve it, i.e. did not support its further development within the company.
The received case data is suggested to be analyzed by the researchers and implemented, when similar experiments take place in different companies. Human factor is what the authors call us to pay attention to, as it affects managers as well. Managers are recommended to use the report for better understanding of how to approach the employees during the implementation of the pay-for-performance system in the future.
Heyneman and Loxley begin their article with a statement that schools are often a subject of studies of many researchers, who are willing to explain the interdependence of certain factors, affecting schools and the quality of school academic performance. Researchers hit a few obstacles, the first of which occurs when the results of such researches are summed up, like the dominance of data collected in the Northern America. As the number of US schoolchildren weighs about 5% of the world, majority of the data collected and analyzed is from this part of the world. Such imbalance leads to the conclusion that many results of the research may be unreliable and need further clarification, based on comparing to the data from the other countries.
The authors used data from six sources about a number of countries throughout the world. The accent was made on 13-14 year old students and their scientific achievements. International Association for the Evaluation of the Educational Achievements presented the data for 18 countries, with students from 10 to 14 years old, with sample groups provided. The data from Uganda presents 61 primary schools, with student groups sampled as well. El Salvador data was collected after surveying 50% of schools in the country. ECIEL data allowed analyzing schools in Brazil, Paraguay, Mexico, Peru, Colombia, Argentina and Bolivia, learning about the physical aspects of education there, as the surveys were designed by economists.
Similar design of the studies mentioned above allowed the authors to determine certain varying elements and compare them by contrasting different societies. However, they encountered certain issues to overcome.
Researchers had to come up with a special strategy to evaluate the presented diversified data. At first, the data was properly organized, it was merged where required, matching students, teachers and school administration. Further, data was cleaned from invariable or missing cases, also filtered based on sex, age and SES. Between-pupil analysis was chosen to be conducted, as it is the method reflecting the aims of the research in the best way.
Preschool influence on the achievements turned out to be much more important in countries with higher level of income per capita, while schools in countries with low incomes remained unaffected. They proved that schools and teachers have bigger impact on the students’ academic achievements in low-income countries.
The nature of education in high and low-income countries differs greatly, as it lacks the diversity in the latter ones. It means that children have to compete for the chance to go to school in spite of the origin, sex and family income, beginning from the first grade. Students in high-income countries, especially in the US, feel some level of competition only on the graduate level.
Many countries do not pay proper attention to the problem of research of the academic achievements in schools and do not provide the necessary capital for this goal and for improving of the learning opportunities. Results of various tests, conducted in the countries with high level of government support of education, might later become used internationally.
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