... is that it seems to me it creates perverse incentives. Employees have good reason to attempt to lower expectations on their performance to lower their target thresholds, because it would make achieving those targets more likely, increasing their chance of getting a bonus. Therefore it seems to me that a rewards system based on meeting targets that the employee themself has a say in framing may cause organisations to lower their expectations, and accept less from their employees. This could be seen as a problem particularly in public services where a tepid institutions quickly translate into social misfortune.
I will be interested to see how the narrative develops on high pay in the public and private sectors, but at the moment it looks to me like there is no perfect solution. Every pay policy comes with its own problems.
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