Abstract: Merit pay is the most widely applied of the individual performance pay plans, and it takes two main forms: merit increments and merit bonuses. With merit increments – also known as merit raises – each employee typically receives an increase in base pay based on their annual performance assessment ranking or rating. These payments are referred to as merit raises or merit increments because they take the form of a permanent addition to base pay. By contrast, merit bonuses take the form of stand-alone payments that do not flow into the individual's base pay and must be re-earned each performance round. In this chapter, we examine each of these two variants of merit pay, beginning with merit increment plans, which are the more traditional of the two.
Publication Year: 2007
Publication Date: 2007-06-29
Language: en
Type: book-chapter
Indexed In: ['crossref']
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