I question the premise that performance-based pay works in the private sector:
It sounds like a reasonable idea but given the nature of modern work that is largely knowledge-based and difficult to measure (unlike a repetitive task in an assembly line) how do you insure that you are measuring real performance? Tying it to the organization's results sounds like a good cure but then you have the task of determining who contributed what and how important was their contribution to the results. You have to have fair, transparent, and easily-verifiable measures to judge dissimilar performance. And how do you measure the time that I spent in the shower thinking of a work problem?