Agency and justice theories suggest that pay plans affect monitoring, but the effect of monitoring on job performance has not been studied. Using a new categorization of monitoring behavior (individual/team and observing/advising), this study shows that individual observational monitoring has a positive impact on performance appraisals under gainsharing and traditional pay situations. Team advisory monitoring, however, has a positive effect on performance, measured both by appraisals and suggestions submitted under gainsharing, but a negative effect on both behaviors under traditional pay
