by Martha Jean

Created on: August 11, 2008

I believe merit based pay works. It can be a strong incentive under the right circumstances within certain industries. Assuming appropriate compensation (that is, compensation that is comparable to the same work at various employers in similar environments within the same city) to start with and that there is a salary range with realistic rewards based on factors such as continued education and skill development in connection with one's job description, increased productivity, team support and punctuality, merit based pay can be an effective incentive for improvement.

In most, if not all, cases, elementary and middle school teachers in the United States are not compensated according to the training and education required for such positions. Therefore, a consideration of merit-based pay in these scenarios would be irrelevant, and does not warrant a "yes" or "no" vote.

In minimum wage jobs, a merit based increase can be utilized as an effective incentive, particularly if coupled with incentives for advancement.

I know of a large, prominent New York City law firm which has its headquarters in a small city in another state that is hundreds of miles away from New York City. This firm provides annual reviews and salary increases for the New York City based secretarial staff. However, the salary increases appear to bear little or no relationship to the reviews. In other words, one can have a good review but be rewarded a salary increase, with no explanation as to how the increase was arrived at. This has prompted some of the secretaries at this firm to compare their increases by percentage to other secretaries within the firm. It would appear that the one percent increases in several cases were essentially rewarded "across-the-board."

In New York City, for example, nearly everything has increased in terms of cost, a city with one of the highest costs of living in the nation. For example, rents for one-bedroom apartments in some of the outer boroughs have generally increased from last year to this year from a range of $1200 - $1500 per month to $1300 - $1700 per month, coupled with the reality that leases are rarely provided beyond one-year terms and landlards generally do not include heat and electricity, which you are required to pay separately. Electricity has increased substantially over the last year. There have also been substantial increases in bridge and tunnel tolls, taxis and other transportation, fuel, milk and food, as well as increases for nearly every service

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