Pay for Performance in Project-oriented Organizations: A case of Niroo Research Institute

Despite the importance of Human Resource Management in project-oriented organizations, there are not adequate studies in this field. As a qualitative study, the purpose of this research is firstly to diagnose the status of performance management and compensation system in Niroo Research Institute. Secondly, this study aims to suggest mechanisms to implement a pay for performance system. The population of this study is researchers and employees working directly in projects. We used a purposive sampling method and collected data through a semi-structured interviews. Besides the interview, we examined the organizational documents pertinent to performance appraisal. Moreover, to increase the research validity, the opinions of experts were also taken into account. Findings of the study suggest  four types of appraisal: 1) employees’ annual performance appraisal as a basis for grading and annual promotion, 2) employees’ monthly appraisal for merit pay, 3) project evaluation by employer regarding the related data, and  4) the combination of individual and group performance appraisal when  the project is completed  and being linked to the rewards.