Performance management pays off - but only with collective goals

Abstract

"Performance management is designed to measure employee performance and increase motivation through measures such as employee dialogues, target agreements, performance evaluations, and performance-based compensation or bonuses. Data from the Linked Personnel Panel (LPP) indicate that structured employee dialogues are the most commonly used method, while the implementation of target agreements, performance evaluations, and especially performance-based compensation has declined from 2012 to 2023, although large companies have recently seen a resurgence in the use of performance pay. Longitudinal analyses reveal that employee dialogues correlate with increased job satisfaction, engagement, and commitment to the employer, as well as a positive relationship exists between performance-based compensation systems and job satisfaction, but this is only true when collective goals and shared success are prioritized." (Author's abstract, IAB-Doku) ((en))

Cite article

Grunau, P., Kampkötter, P. & Ruf, K. (2025): Performance Management in deutschen Betrieben: Leistungsorientierung lohnt sich - aber nur mit kollektiven Zielen. (IAB-Kurzbericht 11/2025), Nürnberg, 8 p. DOI:10.48720/IAB.KB.2511