This article explores managerial perceptions of the effectiveness and fairness of individual performance-related pay schemes. It draws upon findings from a two-part study of middle managers' interpretation and application of performance-related pay processes in a variety of organizational contexts. The analysis reveals that middle managers all too often do not share the principles or the stated objectives of the schemes they are required to operationalize. It concludes that the importance of managerial values and beliefs about rewarding individual contribution has been an overlooked and underestimated dimension in the design and application of individual performancerelated pay schemes (IPRP) despite the significance of the manager's role in their organizational effectiveness.
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