Fairness a Key Issue

The report said that for such systems to be successful, supervisors, employees and unions "must believe that a pay system is both fair and transparent. The most effective performance-based pay systems encourage communication throughout the process, use performance appraisals to improve performance management, and ensure that qualified employees’ salaries keep pace with those of colleagues both in the public sector and in comparable private sector positions." It added that since performance-based pay rewards some employees with higher pay than others, there is an inherent "inequity in pay among colleagues, which may lead to an atmosphere of competition rather than teamwork."