In the past, managing employee performance and reward was a relatively uncomplicated affair. On the performance management side, it was a matter of requiring supervisors to assess each of their subordinates once a year using a simple rating scale instrument, perhaps with a few management-imposed objectives included for good measure. On the remuneration side, the focus was on developing and maintaining a job-based base pay and benefits structure that tempered external competitiveness with a degree of attention to internal equity. In the more complex traditional pay systems, there may also have been an element of individual performance-related reward, perhaps in the form of assessment-based merit increments or one or other of the traditional forms of payment by results, possibly coupled with a modest level of collective STI in the form of profitsharing. Underlying all was an accent on the maintenance of a traditional top-down management culture, a mechanistic organisational structure and a stable relational psychological contract.

How things have changed! Today, performance and reward practitioners find themselves confronted by myriad alternative design options: everything from competency-based assessment and performance coaching, with broad-graded and broad-banded base pay structures, to goal-based STIs for individuals, teams and business units, and an ever-growing range of sophisticated equity plans for employees at all levels – from those on the production line to the habitués of the executive suite.