The Compensation Game: An Experiential Simulation of Performance Management Systems

For instructors of organisational psychology and performance management, organisational processes can be difficult to teach because of their intangible nature. This can be compounded by differing levels of work experience in a diverse classroom. I have developed an experiential simulation showing how key performance indicators incentivise behaviour with implications for interdepartmental coordination and organisational morale. This teaching exercise illustrates how rational decisions made at a local level can have unintended effects at the organisational level. It may provide students with a common reference point to reflect on system-level dynamics in performance management.