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P4P (Pay for Performance) as you say, seems to be the common ideal that Comp folks continually chase. All the reasons you outline make sense.

My biggest concern, especially given that organizations seem to be loathe to fund labor budgets, is that in funneling increases to the 'few' that the 'rank and file' become increasingly demoralized. How does this lead to 'engagement?'

Every job is important in an organization -- otherwise, why would we pay someone to do it? If people are not performing and their jobs are so easy to fill, why are the 'non-performers' still employed?

Maybe we need to go back to the 'cost of living days' through provision of annual increases to all employees, holding aside a fractional percent of the budget to publicly recognize, celebrate and reward those that have truly demonstrated a major contribution to the organization.

This topic is an ongoing conundrum - thanks for the opportunity to discuss!

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