
Merit-based workplaces aim to reward employees for their performance, skills, and effort.
In theory, it sounds fair, but there are common issues to consider:
◾ Needs Strong Performance Management: Without a clear system to track performance, merit pay isn’t effective.
◾ Conflicts with Seniority: If your company values seniority, it may clash with a merit-based approach.
◾ Focuses on Individual Over Team: Merit pay rewards individuals, which can be a problem if teamwork is a key value.
◾ Discourages Average Performers: Employees who don’t qualify for high raises may feel demotivated.
Plus, assuming everyone starts at the same level isn’t realistic.
Factors like socio-economic status, gender, education, disabillity and race affect opportunities.
Bias, whether intentional or not, can turn a merit-based system into one that deepens inequality.