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The committee's charge from the Office of Personnel Management included an examination of research on the effects of performance appraisal and merit pay plans on organizations and their employees. We have extended the scope of our review to include research on the performance effects of pay for performance plans more generally (merit, individual, and group incentive pay plans) and other research on pay system fairness and costs. We did this for two reasons. First, we found virtually no research on merit pay that directly examined its effects. Second, the research on pay for performance plans makes it clear that their effects on individual and organization performance can not be easily disentangled from other aspects of pay systems, other pay system objectives, and the broader context of an organization's strategies, structure
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