The performance management system: applying and evaluating a pay-for-performance initiative.

The clinical operations and programs division at the University of Texas M. D. Anderson Cancer Center undertook an initiative, as part of a new performance management system, to determine the effectiveness in aligning individual performance goals to institutional goals and linking performance to rewards (i.e., distinguishing high performers from low performers). The initiative was completed in two phases--the first involved a pilot group of administrators and managers, and the second encompassed the entire clinical area of the institution. Progress was monitored using a survey specific to the performance management initiative, an institutional employee opinion survey, and employee performance review and merit data. We demonstrated support for both goals in the findings from our performance management survey and for our second goal with the institutional employee opinion survey results. Our correlation analysis of the linkage between performance and merit data provided further evidence that the initiative's implementation affected our goal of better distinguishing high performers from low performers. Although our results indicate that we made significant progress toward meeting our goals, we outlined limitations and implications of our results for other organizations to consider as they embark on their own performance management initiatives. Thinking of performance management as a complete system that encompasses goal alignment, education, communication, and continuous feedback can lead to the recognition of top performers. This recognition is important as organizations try to retain their top talent and improve the performance of all employees in an effort to positively influence the patient experience.