Possible Limitations of Merit Pay Programs
5 Summarize the possible limitations of merit pay programs.
Despite the popularity of merit pay systems, these programs are not without potential limitations, which may lessen their credibility with employees. If employees do not believe in a merit pay program, the pay system will not bring about the expected motivational impacts. Supervisors, HR managers, and compensation professionals must address the following nine potential problems with merit pay programs.
Failure to Differentiate among Performers
Employees may receive merit increases even if their performance does not warrant them because supervisors want to avoid creating animosity among employees. Poor performers, therefore, may receive the ...
Get Strategic Compensation: A Human Resource Management Approach, 9/e now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
