What is merit pay? Do you think it's a good idea to award employees merit raises? If yes, why? If not, why not?
Merit pay or merit raises is any salary increase awarded to an employee based on his or her individual performance.
Merit pay is a system of paying for employee performance. It rewards higher-performing employees with salary increases. The higher the performance, the higher the increase in pay. They are tied to employee performance reviews and typically awarded annually.
The advantages of a merit pay system is that they:
- Help a firm to differentiate between higher- and ...
A short discussion of the advantages of companies using a merit pay system.