Gartner Research

Rewards in the Era of Performance Management Transformation

Published: 28 March 2019

ID: G00707164

Analyst(s): Human Resources Research Team


Traditional pay-for-performance systems inadvertently focus on small differences in performance, resulting in incremental pay differentiation decisions that do not improve employee performance. The best total rewards leaders focus on larger differences between top contributors and other employees.

Table Of Contents

New Demands on Pay for Performance

Our Pay Transparency Research and Findings

3 Components of Successful Pay for Performance

1. Assess Who Contributes Most

2. Differentiate Pay Between Core and Top Contributors

How Much Differentiation Is Required?

Table 1: Psi Corporation’s Compensation-Planning Guidelines for Managers

3. Explain Pay Decisions Through Narratives

Table 2: Pfizer Components of an Effective Narrative



About This Research

Recommended by the Authors


©2021 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Become a client

Learn how to access this content as a Gartner client.