Could the business world be taking the pay-for-performance idea too far?

Several points I heard at conferences last week raised that question for me.

For several years now, pay for performance has been a major push at organizations in America. The idea is to hold on to and inspire the top-performing, “A-player” employees while sending a clear signal to lower-achieving workers that they aren’t up to snuff.

Software vendors have embraced the trend, offering products that make it easy to track progress toward goals, rank employee performance and assign pay raises based on those figures.

But could the obsession with results be misguided? And could the drive to differentiate pay backfire?

Consultant Stephen Shapiro prompted the first of those questions during a keynote speech he made at the annual conference of the International Association for Human Resources Information Management professional group. Addressing a room of several hundred HR techies at a Walt Disney World hotel in Orlando, Florida, Shapiro cited a study of auto racing pit crew members. He said that after numerous efforts to improve the speed of a pit stop, the crew hit a plateau. They could get no faster with the tire changes and refueling.

But when told not to worry about speed, and to focus instead on doing their various jobs more smoothly, they managed to go faster.

Could helping workers get in the flow be more effective than focusing on particular results? Another Shapiro anecdote bolstered the idea. He recounted the tale of a retailer where all store employees except for one were asked to maximize sales for a particular period. The last employee was told to concentrate on serving customers well. That employee sold more than all the others.

Shapiro, formerly with advisory firm Accenture, also called attention to the way people benefit from working with colleagues of different personality types. Thus, someone who loves to dream up ideas needs a great “doer” as a partner. Shapiro said he used to hire people in complementary pairs to maximize the strength of his team.

At the annual customer conference of HR software firm SuccessFactors, Stanford University professor Robert Sutton reinforced the notion that focusing on individual stars can dim an organization’s overall performance. Sutton, author of the popular book The No Asshole Rule, said research has indicated that baseball teams with greater wage disparity experience a reduction in team performance. Sutton also pointed to evidence that pay disparity within the top management ranks can hurt an organization’s performance.

Yes, it makes sense to be clear about desired results. And yes, it makes sense to call out and reward excellent individual performance. But we seem to have taken these principles to an extreme.

Perhaps the pendulum is already swinging back. An executive roundtable at the SuccessFactors conference in San Francisco suggested forced ranking—a frequent ingredient in the pay-for-performance recipe—is losing favor. Diana De Walt, senior vice president of human resources at biotechnology firm Gen-Probe, said her company has dispensed with the mandatory distribution of performance ratings. And Godfrey Sullivan, former CEO of software firm Hyperion Solutions, said he strongly disagreed with the practice.

To focus so much on identifying top performers, he suggested, is to miss the firm’s forest for a few trees. “Life is made up of ‘B players’ who are trying really hard to do their jobs, and they need to be grown and developed and turned into ‘B+ players,’ ” Sullivan said. “They may never make the top 10 percent, but they are the lifeblood of a lot of company operations.”