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What’s a merit increase, and should your business use them?

Business Management Daily

As such, employers must do everything they can to attract and retain high-performing employees, and issuing regular merit increases is one of the best ways to do so. A merit increase or merit raise refers to a pay increase based on an employee’s performance. It’s because merit increases involve a lot of variance.

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Creating Categories for Employee Reward and Recognition

Insperity

Traditional merit-based pay plans, such as raises or bonuses, are not truly effective employee motivators, says Kevin Herring, founder of Ascent Management Consulting and an expert in workplace performance turnarounds. Merit pay, he notes, is often more about the economy than performance.