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ERIC ED357416: Value-Added Merit Pay.
by ERIC
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The purpose of merit pay is to reward employees for their
accomplishments and motivate them to continue improving.
Critics of merit pay say the increased extrinsic
motivation that it prompts is more than offset by the
decrease in intrinsic motivation. Supporters of
performance-based pay claim several benefits of the
practice. This study addressed adding value to and
improving the process of appraising and rewarding
employees. Two major problems concern what is measured to
determine merit and how it is measured. Some critics
claim merit cannot be measured reliably. Problems with
what is measured to determine merit include influence
from outside forces, the accuracy of performance goals,
and an emphasis on performance rather than ability and
effort. Performance-appraisal and merit-pay practices
must be redesigned. There are three major redesign
elements that organizations must address. First, the
inherent limitations of accuracy in all appraisal systems
must be recognized and redesigned so they do not impose
finite distinctions. Second, a broader range of employee
contributions should be incorporated into the appraisal.
Third, appraisal and merit pay should be viewed as a
means of supporting the organization's overall strategy
and a means for encouraging continuous improvement. (JPT)
Date Published: 2014-10-30 08:30:41
Identifier: ERIC_ED357416
Item Size: 12866424
Language: english
Media Type: texts
# Topics
ERIC Archive; Evaluation Methods; Inc...
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