Merit Pay is a performance based compensation strategy where the employees are paid or given pay raises, bonuses or other incentive opportunities based on the individual performance and contributions to the organisations. In this way the company shows its gratitude towards its employees and also encourages them to work harder towards their next goals and assignments.
A little bit more of explanation about Merit Pay
- What is Merit Pay?
Ans. It is an extra amount or financial contribution done by the company in favour of those employees who have achieved excellent results.
- Rewards and Motivation:
Ans. It serves as a reward for exceptional work and can motivate employees to improve their performance.
- Permanent Increase:
Ans. Merit pay usually increases the employee’s base salary, providing a permanent increase, unlike temporary bonuses or incentives.
- Common in Various Sectors:
Ans. While common in sales and education, it can be implemented in various industries and departments.
