Merit Pay Increase Essay Example | Topics and Well Written Essays - 1000 words

Merit Pay Increase - Essay Example Likewise, for many decades in American society, if an individual worked hard and did their best they received pay increases or bonuses, accordingly. The concept, though basic in its nature, is vital, due to its profound impact on future performance. Individuals, who receive praise for past actions are more inclined to repeat and possibly increase the action. Due to recent economic turmoil, however, many companies have stopped giving rewards or pay increases for superior performance. This leaves many employees feeling unappreciated, and as a result unmotivated to do better in the future. One particular case study, given, that exemplifies this predicament is the company of Diverse Prints. They are a marketing company that typically gives large bonuses to their employees based on their job performance appraisals. However, due to the faltering economy the lead people in charge, Ann and Sam, are debating as to whether they should give small bonuses to everyone, or continue with the perfor mance based bonuses, though they will be much smaller than usual. After taking a look at the profound impact job performance recognition has on the employee, the company, and eventually the economy, the question of whether or not merit pay increases should be given will become clear. Though some may argue a person should do their job to the best of their ability regardless of extrinsic recognition or praise, it is simply human nature to crave this type of recognition. Diverse Prints typically conducts job performance appraisals, which is the optimal time for managers to review the strengths and weakness of each employee. It also provides the opportunity for the employee to receive constructive criticism on how to improve areas of weakness, and praise for the areas of their job that are done well. As both Sam and Ann agree the performance appraisals must still be conducted for continued company growth and improvement. However, where they disagree is the fact that Sam feels they shoul d take the meager, two percent budget allotted to pay increases and spread it out evenly to all employees to compensate for cost of living increases. Ann, on the other hand, feels that it is, in a way, unfair to give all the employees equal raises, if their performances are not equal. Plus, she wants to keep the top producing workers happy so that when the economy is doing well they will choose to stay with the company. It seems that by giving a small raise to everyone, all will be evenly unsatisfied. It is important to give honor or praise to where it is due, and if a successful, hardworking employee sees that they are given the same bonus as the person that was lazy all year they will not be motivated to try harder in the future. Ann is right in her assessment that it would be best to explain to all the employees that the bonuses will not be as large as previous years, due to financial hard times, but that they will still be given according to job performance. This allows the indi vidual employee to still feel a sense of accomplishment and recognition from the company for a job well done, and will encourage them to do the same if not more in the future. It also may help motivate those who slacked the year before to do better in the future. A good analogy of this concept can be seen in High School. If everyone was given a diploma for simply showing up, and not based on whether they passed or failed their courses, no student would have the motivation to try harder. In the same way by rewarding those who are successful, they are encouraged to do the same or more, and those who slacked have something to work towards. The second aspect that merit based bonus aide in, is the company