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By PATRICIA K. ZINGHEIM and JAY R. SCHUSTER
Special to HRnext
Does merit pay work? If you ask for a show of hands from HR practitioners, few would indicate that it "works" for their organization. If you ask why "merit" pay does not fill the bill, most will say things like, "It doesn't really pay for performance," or, "All it does is call a 'cost-of-living' increase something it isn't," or, "It's just an entitlement with a different name."
Here are some ideas about how to make your merit pay a real solution. Some are hard to implement, but if you don't use them, you're really just wasting base pay increase dollars.
Can this "fix" your "merit" pay solution? If it can't it can move you dramatically in the right direction. The "merit" approach to pay management is pretty long in the tooth and needs to be evaluated and updated more often than you might expect.
Editor's note: Patricia K. Zingheim and Jay R. Schuster are partners in Schuster-Zingheim and Associates, Inc., a pay-and-rewards consulting firm founded in Los Angeles in 1985. Their writing credits include the books "Pay People Right! Breakthrough Reward Strategies to Create Great Companies" (Jossey-Bass, 2000) and "The New Pay: Linking Employee and Organizational Performance" (Jossey-Bass Publishers, 1996). They've also appeared on CNBC, CNNfn, NBC, and CBS programs. Their web site is www.paypeopleright.com
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