A THEORY OF EQUITABLE PERFORMANCE STANDARDS

Performance standards are reconceptualized as the interface between me asurement and evaluation. A job's performance standards are theorized to be equitable to the extent that they require levels of effectivenes s equal to those collectively viewed as justified by the standing of t he job's pay rate relative to the labor market median. Methodology for creating equitable performance standards is presented, and the implic ations of implementing such performance standards are discussed in ref erence to compensation strategy and practice and to the potential fina ncial benefits to organizations.