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Hi Ann. Data and tools may definitely be key elements that are currently lacking. However, I also have a different (could be additive) take.

I've just finished a large research project focused on the relationship of organization culture and cultural values to meaningful performance differentiation, where 'meaningful' means the ability to make critical talent decisions (e.g., rewards, promotions, succession nominations) from a differentiated performance distribution.

One key finding is that there are certain values that most support a manager's willingness to differentiate performance: the values of competitiveness, winning, results, and aggressiveness. And if these values run countercultural to the dominant organization culture, the manager doing the differentiating and ultimately the communicating (and justification) of differentiated ratings (or potentially merit increases, bonuses, etc.) may be hard pressed to actually move forward with and publicize true differentiation. The potential for conflict, challenging conversation, and breaking cultural norms (e.g., differentiating in a harmonious, family-type culture) is enough to stop people from executing, even though it sounds great on paper.

Thanks as always for your timely and interesting posts!

Mercedes:

The connection between culture/values and the willingness to differentiate performance ratings seems like a logical one to me - and completely fits my experience - thanks for sharing your findings on this here.

What we were attempting to study with this survey (and I say we because this particular survey had its genesis in conversation with a couple of client organizations with particular and strong interest in these questions), particularly in reference to the term "differentiated", is not the degree of differentiation in performance ratings and (thus) merit increases, per the classic merit increase matrix. Instead, as noted in the definition shared in the Part 1 post on Wednesday, we're looking at whether organizations are moving in a new direction beyond simply traditional performance rating differentation to "Moving from a one-size-fits-all (or mostly so) to a more selective policy that differentiates salary increase opportunity in response to mission critical skills, job value or other factors." What we were attempting to discover is the degree to which organizations are actually (because I've heard the talk) blowing up their traditional merit matrixes and moving to a new salary paradigm where salary adjustments are made in service of a whole new "investment" strategy that might feature critical skill growth/reinforcement or an effort to craft a new kind of workforce over time.

Because the term "differentiation" is used in so many ways, this might not have been ideally clear.

Thanks, as always, for weighing in and sharing your observations and experience.

See Derek Irvine's http://www.compensationcafe.com/2013/04/when-you-cant-differentiate-based-on-compensation-what-do-you-do-to-stand-out.html post of today and the article cited in the comments from the WorldAtWork Journal this Quarter for more details. This is all very timely. The academic article http://apprd02.worldatwork.org/t/1625404/231372/784190/1003/ discusses many critical factors affecting differentiation, also.

Wow, kiu estis sufiĉe interesa. Inspira, tiel. Dankon pro dividi tiajn inspira sperto kun ni. Vi pravas, vi vere faris savi vivojn. Granda blogo, congrats.

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About The Author

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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