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Category: Movie Review

Subcategory: Business

Level: College

Pages: 4

Words: 1100

Date due:
Merit Pay
Merit pay is a word that is used to describe pay that is related to one s performance. Using criteria that are measurable, those workers who are seen to effectively perform their jobs are given bonuses. Research shows that using merit pay, one is able to reward the employees that they wish to keep for a long period of time. Organizations that use merit to pay their employees always succeed and they manage to retain their employees.
Merit pay should be used in paying employees in organizations. When paying them according to their performance, there are some conditions that ensure that the policy gets to work. One of them is by measuring the performance of the employees in a manner that is appropriate. This is important since it helps in showing that the performance of every employee thus it is easy to differentiate between the employees who perform well and those that do not.
Merit pay is very important in organizations. It is because it helps the management in getting to determine those employees who do not perform and those that perform. Therefore, they are able to dismiss those employees whose work is questionable or even advice them on the areas where they can improve on. By that it helps in improving the performance of the employees since they would not like to be classified among those who do not perform well (Heneman 32).  The process can be used in a way which will reward the good and punish the wicked (Cohen & Richard 33)
Merit pay also helps the management of organizations to see the difference between how the organization is performing as the whole and how an individual is performing. This is because the school might be performing better but some of the employees do not performing well. At times an organization performs poorly just because some of the employees are lazy and do not work hard thus leading to the poor performance of the organization.
Merit pay also ensures that the employees do not waste work time. It is because in a situation where their performance is not measured, employees get to waste a lot of time doing things that are not necessary. That means that they do not get to complete their work in good time. The employees get to waste a lot of time in a situation where they are all paid the same amount of money regardless of their performance. The merit pay, therefore, ensures that they do not waste time since all the performance of the employees is closely measured and there are also monitored on how they carry out their activities. It, therefore, means that with the performance merit, all employees get to work as they are supposed to without having to be followed around.
Merit pay is also very important since it helps organizations to retain the employees that they have. Some of the organizations often have shortages in employees just because the employees left since they believed that they were not being paid for the work that they did. The employees believe that they worked very hard only for them to be underpaid. Therefore, they leave the organizations resulting to a shortage of employees in the organization. When an organization does not have enough employees, the work produced is usually poor. That is because the employees are very few to handle all the workload. This is a problem that could have been avoided if only the employees were paid according to their performance. It is, therefore, very important for the organizations that would like to retain their employees for a long period of time to consider using the merit pay.
Merit pay also helps a lot in motivating the employees to perform better. When an employee is paid extra for performing well, it makes them feel happy. Therefore, the employee will always work hard with the aim of having a performance that is even better the next time. Therefore, merit pay will ensure that the employees are always motivated while doing their work thus they will always do the job to their level best. It will also help them in appreciating their job since they are able to see the fruits of their work. It also helps the employees to see that their work is appreciated thus giving them the motivation to perform better.  Merit pay was most likely to be effective when employees perceived a link between pay and performance, and when they viewed the system as fair in terms of the process used to administer merit pay (Heneman 12)
It also helps in encouraging the employees that do not perform to improve on their performance. It happens because employees who do not perform well feel challenged when they see other employees getting awarded for good work (Cohen & Richard 32). Therefore, they get the motivation to perform better so that they can be awarded during the next time. Some of the poor performing employees get the motivation to perform better since they do not want to be classified among those that do not perform. When the employees are motivated by the pay, it ensures that they get to improve on their performance.  A final indicator of the importance of merit pay is the extent to which merit pay plans lead to desirable results (Heneman 10).
Some people argue that merit pay is not good since it reduces the morale of the employees because it increases the competition among them. However, that is not true because when employees compete against each other, it helps in improving their performance. It happens since each employee gets to perform at their best which means that all the employees in the organization get to perform very well. When all employees perform well, it is guaranteed that the organization gets to performs well too. Some argue that administering the merit pay plan is just a waste of money and time. However, this is not true. A lot of money and time might be used in administering the plan. However, no waste is incurred since the plan is of great importance for the good of the organizations. The money to be used should not be spared at the expense of the future of the organization (Heneman 23). That is because the future of the organization depends on the plans that are implemented for the good of the organization. It is also argued that there is no way that is a hundred percent accurate in measuring the performance of the employees thus offering merit pay to the employees is not fair. However, this is not the case. This is because the performance of the employees can be measured by the quality of their work.
From the research, it is evident that merit pay is very necessary for organizations. With merit pay, the organizations will improve since the employee performance will have improved. Therefore, all the organizations should consider having merit pay for their employees. Merit pay also contributes a lot in the motivation of employees thus they always ensure that their performance is always good. With motivation, the employees will always provide the best to the organization. It is also evident that the management gets to monitor how the employees are performing in the organization. That helps a lot since the organizations are able to know the employees that have been performing well and those that have not been performing well.

Works Cited
Cohen, David K., and Richard J. Murnane. The merits of merit pay. Washington, DC: National Inst. of Education ;, 1985. Print.
Heneman, Robert L.. Merit pay: linking pay increases to performance ratings. Reading, Mass.: Addison-Wesley Pub. Co., 1992. Print.


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