Performance-Based in the Workplace: Magic Potion Or Malevolent Poison‪?‬

Performance-based pay systems have been widely used in organizations. Despite their popularity, they have been criticized on a number of grounds, such as their lack of effectiveness. There is also surprisingly little research on what effects such systems may have on employee perceptions. The present paper is divided into two sections. First, we review several of the major criticisms of performance-based pay systems and provide responses in their defense. Second, based on research literature, we offer a discussion of numerous perceptions and attitudes that may mediate the relationship between performance-based pay and employee performance. **********