Скачать или смотреть Merit Pay Programs

Let’s take a look at merit pay programs. Merit pay programs reward employees for achieving certain levels of performance over a predetermined time in the past.

The logic for this approach is straightforward: Employees who perform at higher levels should receive greater rewards. With a typical merit pay increase, employees receive a compensation adjustment based on the results of their performance evaluations. The performance ratings they receive are then used to allocate merit pay increases to them.

While merit pay increase plans are commonplace, they are not without problems. As a result of these drawbacks, many companies use other types of incentive plans.