A Higher Education Perspective on Linking Performance Indicators to Extrinsic Rewards: An Empirical Analysis

Abstract

This empirical study of Australian faculty shows that performance indicators play a small but significant role in influencing work behavior when they are linked to extrinsic rewards. Many faculty members were found to concentrate on the activities measured by the indicators because of the extrinsic rewards attached and/or fear of negative consequences. This selective attention to the activities measured and rewarded by the indicators, however, was accompanied by selective inattention to anything that was not measured and rewarded. This paper also examined some factors—faculty gender/rank and university tradition—that could affect the faculty members' responses to these reward-linked indicators.