Merit Pay
- Can be based on individual, group or organization performance.
- Individual Plan: used when individual performance (sales) is accurately measured.
- Group Plan: use when group works closely together and is measured as a group.
- Organization Plan: When group or individual outcomes not easily measured.
- Bonus has a higher impact on motivation since
- Salary level not related to current performance.
- Other items( base salary, cost of living, seniority).
- Salary rarely goes down and usually changes little.